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80MVK16 Market survey Romania and Bulgaria - The Water Sector

This Market survey is carried out by BDG by order of EVD and in cooperation with the Dutch embassy of Bucharest and Sofia.

Nadere informatie: EVD

Landenmedewerkers Annemarieke Roelfzema, Isabel Fortunato

Telefoon: Romania +31 70 778 89 17, Bulgaria +31 70 778 89 06|

email: roemenie@info.evd.nl, bulgarije@info.evd.nl

EVD

November

2008

2

November 2008

The ministry of Economic Affairs, EVD

EVD supplies this information for free. The content needs to be available for free for our clients,

Dutch companies. It is not allowed to multiply or publish anything out of this edition by

photocopy, microfilm or on any other possible way, without previous notice of the publisher. In

spite of all the care that is taken over this edition, the Ministry of Economic Affairs cannot be held

legally liable for possible inaccuracy.

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CONTENT

A Executive Summary; Main Conclusions 6

B Romania 7

List of Abbreviations 7

1. Brief Overview of the Romanian Water Sector 9

1.1. General Information 9 1.2. Organization of the Water sector in Romania 10 1.2.1. Brief History 10 1.2.2. Present Situation 11 1.2.3. Legal framework including adherence to Framework Water

Directive 12

1.2.4. Authorities and Responsibilities 12 1.2.5. Overview of Latest Policy Documents and National

Development Plans 16

1.2.5.1. Surface Water and Groundwater Quality Including Management of River Basins

16

1.2.5.2. Flood Risk Management (including adherence to EU Flood Directive)

16

1.2.5.3. Coastal Protection and Quality of Coastal Waters 18 1.2.5.4. Water Management, Municipal and Rural Wastewater

Treatment 19

1.2.5.5. Drinking Water 19 1.2.5.6. Cross border and International Partnerships 20 2. Market Insight 21

2.1. Water Supply and Sewerage 23 2.1.1. Applicable Regulations, Standards, Government Policies 23 2.1.2. Infrastructure Status and Applicable Technologies 23 2.1.3. Specifics in Urban and Rural Areas 23 2.1.4. Water Companies – Operational, Technical and Financial

Management 24

2.2. Water Quality 27 2.2.1. National Monitoring System for Water Quality (observations,

operational, investigation) 27

2.2.2. Certification (including potential for private water certification) 28 2.2.3. Research and Development 28 2.3. Waste Water Treatment in Urban and Rural Areas Including Sanitation 29 2.4. Market Innovation and Compliance with Regulation in Industries with a

High Water Usage 30

2.5. River Basin Management 31 2.5.1. National Management Plans Including Implementation Stages 32 2.5.2. Surface Waters Categories and Risk Bodies of Surface Water 32 2.5.3. Flood and Drought Prevention and Monitoring Systems (early

warning systems) 33

2.6. Coastal Management and Protection 36 2.6.1. Erosion Protection 36 2.6.2. Integrated Management of Coastal Areas 38 2.7. Groundwater / Soil Pollution 39 2.8. Major National and International Companies Active in the Water

Sector 41

3. Overview of Funding Available for the Water Sector 45

3.1. National Funds 46 3.2. Pre-Accession European Funds 50 3.3. Post-Accession Funds 51 3.4. Development of Alternative Financing Schemes in the Water Sector

(including PPP) 60

4. Tendering procedures 70

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C Bulgaria 72

List of Abbreviations 73

1. Brief Overview of the Bulgarian Water Sector 73

1.1. General Information 73 1.2. Organization of the Water Sector in Bulgaria 74 1.2.1. Brief History 74 1.2.2. Present Situation 74 1.2.3. Legal framework Including Adherence to Water Framework

Directive 75

1.2.4. Authorities and Responsibilities 77 1.2.5. Overview of Latest Policy Documents and National

Development Plans 78

1.2.5.1. Surface Water and Ground Water Quality Including Management of River Basins

78

1.2.5.2. Flood Risk Management (including adherence to EU Flood Directive)

78

1.2.5.3. Coastal Protection and Quality of Coastal Waters 79 1.2.5.4. Water Management, Municipal and Rural Wastewater

Treatment 79

1.2.5.5. Drinking Water 79 1.2.5.6. Cross-border and International Partnerships 80

2. Market Insight 81

2.1. Water Supply and Sewerage 81 2.1.1. Applicable Regulations, Standards, Government Policies 81 2.1.2. Infrastructure Status and Applicable Technologies 81 2.1.3. Specifics in Urban and Rural Areas 82 2.1.4. Water Companies-Operational, Technical and Financial

Management 82

2.2. Water Quality 82 2.2.1. National Monitoring System for Water Quality (observation,

operational, investigation) 82

2.2.2. Certification (including potential for private water certification) 84 2.2.3. Research and Development 84 2.3. Waste Water Treatment in Urban and Rural Areas Including Sanitation 84 2.4. Market, Innovation, and (compliance with) Regulation in Industries

with a High Water Usage 85

2.5. River Basin Management 86 2.5.1. National Management Plans Including Implementation Stages 86 2.5.2. Surface Waters Categories and Risk Bodies of Surface Water 86 2.5.3. Flood and Drought Prevention and Monitoring Systems (early

warning systems) 87

2.6. Coastal Management and Protection 88 2.6.1. Erosion Protection 88 2.6.2. Integrated Management of Coastal Areas 89 2.7. Ground Water / Soil Pollution 89 2.8. Major National and International Companies Active in the Water

Sector 92

3. Overview of Funding Available for the Water Sector 94

3.1. National Funds 94 3.2. Pre-Accession European Funds 94 3.3. Post-Accession European Funds 94 3.4. Development of Alternative Financing Schemes in the Water Sector

(including PPP) 96

4. Tendering Procedures 101

D Joint SWOT Analysis of the Sector in Romania and Bulgaria 103

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Annexes Annex 1 RO National Legislation Transposing EU Directives in the Water Sector 104 Annex 2 RO ISPA Projects 110 Annex 3 RO Romania-National and European Funds Available for the Water Sector 116 Annex 4 RO Upcoming Project Ideas in the Water Sector 117 Annex 5 Key Contacts Romania 119 Annex 6 References Romania 122 Annex 7 BG National Legislation Transposing EU Directives in the water Sector 123 Annex 8 BG ISPA Projects 124 Annex 9 BG Upcoming Project ideas in the Water Sector 126 Annex 10 Key Contacts Bulgaria 127 Annex 11 References Bulgaria 129

Tables Table 1 RO Implementation Stages River Basin Management Plan 17 Table 2 Romanian Hydrographic Network 31 Table 3 RO Implementation Phases Protection Plan Costal Area Erosion 38 Table 4 RO Selection Water Projects financed form Environmental Fund 48 Table 5 RO Overall financing plan of SOP ENV 53 Table 6 RO Financing Plan for SOP ENV per Priority Axis 53 Table 7 RO Desired SOP ENV results for Priority Axis 1 54 Table 8 RO Current Status of SOP ENV Water Projects Priority Axis 1 55 Table 9 RO Desired SOP ENV results for Priority Axis 5 56 Table 10 RO ROP PA 1 Allocations per Development Regions 58 Table 11 RO The funding scheme for ROP Priority Axis 1 58 Table 12 RO Other water projects financed by EBRD 63 Table 13 RO Water Sector Projects Financed By EEA Grants 66 Table 14 BG Water Sources 81 Table 15 BG Categories of Surface Water Bodies 87 Table 16 BG Ground Water Bodies 90 Table 17 BG Overall Financing Sources OP Environment 96 Table 18 BG Main EBRD financed projects in water sector 98 Table 19 BG World Bank Projects in the Water Sector 99 Table 20 BG Key Institutions OP Environment and OP Regional Development 101

Charts Chart 1 RO Institutions under MESD coordination and authority 14 Chart 2 RO Governmental authorities cooperating in the water sector 16

Maps Map 1 Hydrological Map of Romania 9 Map 2 Regional Operators Romania 26 Map 3 RO Vulnerable areas for nitrits pollution 40 Map 4 River Basins Bulgaria 73

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A Executive Summary - Main Conclusions Business Development Group SRL was commissioned by the Agency for International Business and Cooperation (EVD) Netherlands to carry out a survey study regarding the water sector in Romania and Bulgaria, in order to provide the Dutch companies and organisations in the field with a more detailed insight into different aspects of the Romanian and Bulgarian water sector, and in order to strengthen their strategic position on these markets. The executor of this report based its methodology on providing valuable local information in cooperation with our Bulgarian business partners Ecorys South East Europe, in Sofia. The report is constructed in 2 main parts, one per each country, providing an overview of key stakeholders and a summary of policy documents, development plans and current status of implementation of EU directives related to surface and ground waters management, flood and drought, coastal protection and quality of coastal waters, water management, and municipal as well as rural wastewater treatment and drinking water including overall compliance with the Framework Water Directive. The report also provides an outline of market developments driven by the need for implementing new, higher standards as well as comprehensive data bases of major players in the sector. Even though major efforts were made in the pre-accession period for upgrading standards, approach and infrastructure levels in the water sector, long term efforts are needed in the next period in both countries for reducing disparities and complying with the EU acquis. Basic infrastructures and services will need to be created, upgraded and expanded in order to open up regional and local economies, set up an effective business support framework and exploit opportunities offered by the European Market. To this end high level financing is planned in both countries from joint national and European sources but also with the contribution of international financing organizations and other donors. The report provides a review of available financial opportunities as well as the corresponding tendering procedures. At the same, the SWOT analysis in section D, aims to aggregate main characteristics of the water sector in both countries, giving a general guideline for further strategy development for Dutch companies interested in making use of the local and regional opportunities. Even with a somewhat different density and profile of the hydrological network, Romania and Bulgaria share not only two major water resources (Danube and Black Sea) but also a lot of the past history in the development and management of their national water infrastructure. Both countries will fulfill their environmental commitments for EU membership in close bilateral cooperation, and are facing nowadays more or less similar challenges in creating viable systems for water management. The implementation of national strategies in the water sector already generates a wide number of projects tendered on increased fairness and transparency, based on EU rules and adjusted national legislations. Dutch equipment and expertise are already well-known in Romania and Bulgaria due to the high number of projects carried out with Dutch governmental and European support. Dutch brands are well-trusted by both public and private sectors and considered to be synonymous with high efficiency, reliability and profitability. These are already creating good prerequisites for further commercial success on both markets provided they are adequately valued. A list of potential project ideas, as made public by various authorities in both countries, is provided in Annex 4 (Romania) and respectively Annex 9 (Bulgaria). The competitive advantage of Dutch Water Sector can be further consolidated by offering turn key solutions by integrating technology and consultancy based on consortium partnerships to include cooperation with local partners (not only a condition for accessing most of EU or national financed projects but also for successful projects implementation). The prospect of complete solutions will be appealing to local authorities (public utilities) and private market (industrial facilities, real estate developers, etc.) for water supply, industrial use, waste water treatment and sanitation services. At governmental level, support is openly sought for institutional capacity building (administrative, legislative and managerial), training, education and knowledge exchange in view of development of plans for river basins management, surface and ground waters monitoring and rehabilitation, flood prevention and protection. Moreover, the long term Dutch experience regarding control and protection of all types of water systems, as well as the lessons learned in applying the integrated approach for water management- water governance and sustainable use of water resources-, are perceived by both Romania and Bulgaria as an important support for bilateral cooperation, not only during the current accession phase but also for further joint action within the European Union.

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B Romania

List of Abbreviations Romania

AFM Environmental Fund Administration

ANRSC National Authority for Regulating Public Utilities Community Services ARA Romanian Water Association

ASRO Romanian Standards Association

BCR Romanian Commercial Bank

BDG Business Development Group

BOT Build-Operate-Transfer

CCEG Eco-Counselling Centre Galati

CEDB Council of Europe Development Bank

CF Cohesion Fund

CWP Country Water Partnerships DDBR Danube Delta Biosphere Reserve

DESWAT Destructive Water Abatement and Control

EAFRD European Agricultural Fond for Rural Development EBRD European Bank for Reconstruction and Development EC European Commission

EF Environmental Fund

EIB European Investment Bank

ERDF European Regional Development Plan

EU European Union

EUR Euro

FEDR European Fund for Regional Development

GD Governmental Decision

GEF Global Environment Facility

GIS Geographical Information System

GO Government Ordinance

GWP Global Water Partnership

HA Hectare

HDPE High Density Polyethylene

IDA Intercommunity Development Association IB Intermediate Bodies

IBRD International Bank for Reconstruction and Development

ICIM National Institute for Research and Development for Environment Protection ICPDR International Commission for the Protection of the Danube River

IDA Intercommunity Development Association

INSSE National Institute of Statistics

IPPC Integrated Pollution Prevention and Control

ISPA Instrument for Structural Policies for Pre-Accession ISPB Public Health Institute in Bucharest

ISPIF Land Improvement design and studies institute IWRM Integrated Water Resources Management

JICA Japanese Agency for International Cooperation MA Managing Authority

MARD Ministry of Agriculture and Rural Development MDPWH Ministry of Development, Public Works and Housing MENER National Programme for Research, Development and Innovation MESD Ministry of Environment and Sustainable Development MIL Million

MIRA Ministry of Interior and Administrative Reform

MPH Ministry of Public Health

NAAR National Administration “Apele Romane”

NARMPP National Authority for Regulating and Monitoring Public Procurement

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NEPA National Environmental Protection Agency

NCCA National Committee for the Coastal Area

NIHWM National Institute of Hydrology and Water Management NMA National Meteorological Administration

NRDP National Rural Development Program

PA Priority Axis

POS Operative Sectorial Programme

PPP Public-Private Partnership

RBDP River Basin Development Plan

RBMP River Basin Management Plan

RENAR Romanian Accreditation Association

ROC Regional Operating Company

SA Joint Stock Company

SAMTID Infrastructure Development Programme for Small and Medium Urban Communities

SAPARD Special Pre-Accesion Programme for Agriculture and Rural Development SEAP Electronic System for Public Procurement

SIMIN Meteorological Integrated Informational System

SMIAR Romanian Waters Integrated Monitoring Sistem

SOP Sectorial Operational Programme

SOP ENV Sectorial Operational Programme for Environmental Infrastructure SRAC Management Systems Certification Organization SRL Limited Liability Company

TAC Technical Advisory Committee

UNDP United Nations Plan for Development

UNEP-Ch United Nations Environment Programme – Chemicals Division UNESCO United Nations Educational, Scientific and Cultural Organization UNO United Nations Organization

USAID United States Agency for International Development USD United States Dollars

USTDA United States Trade and Development Agency WATMAN Informational System for Integrated Water Management WB World Bank

WFD Water Framework Directive

WMS Water Management System

WWTP Waste Water Treatment Plant

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1 Brief Overview of the Romanian Water Sector

Map 1: Hydrological Map of Romania

Source: NIHWM

1.1 General Information

Romania is a country of 237,391 km2 and over 21.7million inhabitants with a relief split threefold: 31% mountainous, 36% hills/plateaus, 33% plains arranged in a ring and amphitheatre structure. The mountains of the Carpathian ring, along with the Transylvanian Depression which skirts it, represent the high relief of 1800-2500m. Beyond this, between 200m–1000m are hills, tablelands and the Dobrogea Plateau, plus the plains of the Lower Danube (Romanian Plain) and Banat–Crisana, an expansion of the Tisa Plain. Romania’s territory has a complex geological structure of orogenic, foreland and inter Carpathian units. Key elements are the alpine folded belt of the Carpathians and the North Dobrogean Mountains. The Carpathian foreland includes platforms (Moldovian, Scythian, Moesian) and the intercarpathic areas of Transylvanian and Pannonia Depressions. Part of the Alpine chain, the Carpathians are connected to the Alps in the west and the Balkans in the south and are divided into three main areas: Eastern Carpathians, Southern Carpathians and Apuseni Mountains. The plateau areas are built up by successions of varying geological history. The alpine North Dobrogean range has a peculiar, intracratonic position within the foreland. The Transylvanian Depression (central Romania) is a Neocene molasses basin. The Middle-Upper Miocene and Pliocene succession of the basin fill includes important Early Badenian salt deposits and several levels of volcanic tuffs. The easternmost part of the Pannonia Depression (also a Neocene molasses basin) is represented in the western part of the country by Neocene deposits. Romania has a mild, temperate-continental climate with four distinct seasons, most precipitation in the warm season and some Mediterranean influence to the south. Average annual temperatures are 8-11°C in the agricultural area and -2°C on the Carpathian summits. Similarly, frost-free periods exist for 200-240 and 100-120 days and average annual precipitation is 400-

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800mm (potential evapo-transpiration: 600-700mm) and over 1200mm (potential evapo-transpiration: less than 500mm) respectively. Precipitation has an uneven distribution and severe drought occurs every 15–25 years. With territory extending over almost 5° in latitude, significant temperature variations exist between the south and north (average annual temperature is 3°C lower in the north at similar altitude). Temperature variations between west and east are less marked (10° degrees Celsius higher in east) with precipitation variations being more significant (700mm in the west less than 400mm in the east). Due to its geographical position, Romania has a great variety of water resources consisting in surface water (inland rivers, natural and entropic lakes) that account for 46% of the total resources, the Danube River 44% and underground waters 10%. In spite of the geographical diversity Romania is poor in water resources as reported to the country’s current population. The specific usable resource in natural regime is of about 2,660 m3/inhabitant/year, (considering also the Danube’s contribution), while the theoretic specific resource is of about 1,770 m3/inhabitant/year (considering only the contribution of the inland rivers). Romania is almost entirely situated within the Danube Basin (97.8%). The Romanian section represents 29% of the surface area of the whole Basin, with 37.7% of the river flowing through its territory. The Romanian (and also Ukrainian) Danube is the end carrier of all wastewater discharges from upstream countries to the Black Sea. The Danube the second-sized river in Europe (2,850 km long) flows 1073 km in Romania and has an average stock of 174 × 109 m3 at the entrance on the Romanian territory. Romanian Black Sea Coast is of 244 km representing 7.65% of country borders. The inland river network comprises 78,905 km. Main characteristics of this category of resource are a very large variability in space (a half of the water volume is in the mountainous area; the specific mean flow ranges within 1 l/s and km2 in the lower areas, up to 40 l/s and km2 in the high areas), and very high variability in time so that significant floods happen in spring, followed by long drought periods. The underground water resources consist of the water deposits existing in the phreatic aquifers - bearing and very deep layers. The distribution of the underground leaking way varies on the large tectonic units all over the country in the following way:

• 0.5-1 l/s and km2 in Northern Dobrogea;

• 0.5-2 l/s and km2 in Moldavian Plateau;

• 0.1-3 l/s and km2 in Transylvanian Depression and the Pannonia Depression;

• 0.1-5 l/s and km2 in Northern Dobrogea and the Danube Platform;

• 5-20 l/s and km2 in Carpathians area, especially in the Meridional Carpathians and the alpine zones in the Jiu and Cerna basins.

The total gross water samplings reached 6.98 billion m3 in 2007, out of which: population 1.05 billion m3, industry 4.84 billion m3, agriculture 1.09 billion m3. The water sampling decrease from 20.4 billion m3 in 1990 is mainly determined by the:

• reduction of the economic activity;

• reduction of water consumption reduction in technological processes;

• reduction of losses;

• enforcement of the economic gear in the water management. Regarding only those sites where the status of the water resource is a key factor, 6.1% of Romania (14,437.3 km2) has been designated for the protection of habitats/species (216 sites).

1.2 Organization of the Water sector in Romania

1.2.1 Brief History

First trials towards putting together a national water management plan in Romania were started at the end of the 19

th century by individual efforts of major Romanian engineers (such as Anghel Saligny) and were mainly

connected with hydro technical works for Danube embankment and building of an irrigation channel for Baragan plains. “Plan général d’aménagement des forces hydrauliques de Roumanie” (“General Development

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Plan for hydraulic forces in Romania” ) ellaborated in 1934 by eng. Dorin Pavel is considered to be the first evaluation at national level even it was taking into account exclusively the hydro energetic potential without considering other water usages.

After second world war the former Communist Party gave a major importance to country electrification. The national electrification plan approved in 1950 was relying heavily on the hydrologic potential but at the same time was referring to other usages of water such as irrigation especially for South Romania. During the same period (1949) the construction of the Danube –Black Sea channel was initiated. Immediately after the approval of the National Electrification Plan, the Institute for the Integrated Plans for Water Courses Development (IPWCD) was created within the Ministry of Naval and Air Transports. In 1956 the State Committee for Waters was created as first institution to coordinate water issues at national level, this institution being at the origin of the ellaboration of first national waters cadastre.

During 1959 – 1962 IPWCD ellaborated the development plans for river basins and the national plan for water management in Romania. For the first time the plan was underlining that Romania is one of the poorest countries in Europe in terms of water resources in contradiction with the general perception until that moment. The resources that add in the water courses on country’s teritorry (the endogene resources) were evaluated at 1894 m³/year/inhabitant while the surface waters corresponded to 0.18m water layer. Considering also the exogene resources (contribution of rivers formed on other countries territory)- in case of Romania the Danube and Siret-, the resources increase to 212 km³/year which demonstrates a high dependency on water resources coming from countries upstream. Based on these conclusions the plan was focused on maximizing the utilization of the Danube resources as well as several water management measures mainly for creating reservoir lakes (for re-distributing water resources in time) and water course deviations (to transfer water discharges towards areas with less natural resources). The measures were also including floods protection (dams and artificial lakes or deviations to collect heavy water flows) water quality (creation of water treatment plants and location of production units so water resources can be used succesivly) and land management works (forestation, rationalization of agriculture).

In 1967 the State Committee for Waters was dissolved and its responsibilities were transferred to the Department for Land Management within Ministry of Agriculture, a mistake that was corrected only after the heavy floods Romania confronted with in 1970-1975. During 1971-1974 the Romanian government received support from United Nations Program for Development (UNDP) financing a multisectorial management plan for upper Mures basin that facilitated access to up-to-date knowledge for Romanian specialists. Towards 1989 the relatively comprehensive and realistic plans were abandoned under the pressure of the high political involvement and the dictatorial approach of the communist regime. Major negative consequences reflected in the tremendous increase of water consumption and the impact on water quality (rapid industrial development without any policy on protection agains pollution).

After 1989 the water sector coordination was transferred to the Ministry of Waters, Forests and Environment Protection. From 2001 the Forestry Department was transferred to the Ministry of Agriculture and the Ministry became the Ministry of Waters and Environment Protection until 2005 when the social-democrat government initiated a new reorganisation cumulationg two ministries and creating the Ministry of Agriculture, Forests, Water and Environment protection. The initiative proved extremely damaging and after few months the previous structure was reinstated by establishing the Ministry of Environment and Water Management but the negative impact on activities and data management could not be avoided. The ministry was again reorgansied in the current structure to include not only the water management but also the new concept of sustainable development in April 2007, following accession to EU. If at the institutional level the needed steps forward were made in the pre-accession period including elaboration of strategies and management plans, at the implementation level the constant lack of organisation and shift of authority determined major consequences visible mainly during periods with extreme weather phenomena (flood in 2005, 2007 and 2008, drought during spring 2007, etc).

1.2.2 Present situation

According with the latest statistics 35% of Romania’s population have no access to public supply system for the drinking water and approx. 43% do not have access to collection and purification services for waste water. In approx. 21 % of urban areas drinking water is distributed with large, 8 h period disruptions, a fact which affects 12.5% of all urban population.

National Institute of Statistics (INSSE) data shows that in 2007, 309 municipalities and 426 communes benefited from waste water collection and purification services. The total length of Romania’s sewage network at the end of 2007 was 19,355 km, the largest part (17,549 km) belonging to urban communities. In

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comparison to the previous year, in 2007 the sewage network was extended by 388.2 km in urban areas and 365 km in rural areas (total: 753.2 km). Consequently, 9.2 mil inhabitants (42.6% of Romania’s total population) had access to sewage systems. The regions most affected by the unavailability/insufficiency of

sewage networks are: the South Region (71.7% of population not connected), the North East region (69.3% of population not connected) and South West (68.7% not connected). Around 6.1 mil inhabitants (28.4% of total population) are accessing sewage systems that include purification stations.

In 2007 approximately 4% of all waterways fell under the IV and V quality categories (poor and bad ecological state) and, in many areas of the country, the ground water have a high content of nitrates as result of the long-term pollution with agricultural fertilizers. Around large cities fountain water is polluted by organic substances. In early 2008 statistics show that 47 cities in Romania, including Bucharest discharge waste water in rivers and that, out of 1,310 water purification stations currently existing in Romania, only approx. 63% function properly.

1.2.3 Legal framework including adherence to Framework Water Directive

The European Water Framework Directive (WFD) 2000/60/EC establishing a framework for Community action in the field of water policy, amended by Directive 2008/32/EC is totally transposed into national legislation through Law no. 310/2004 that modified and completed the Water Law no. 107/1996. The number of subsequent government ordinances and decisions for transposing and implementation of the daughter directives is quite high making the utilization of the law extremely difficult (see Annex 1). The MESD plans an integration of all legal provisions in one unitary law to be republished beginning of next year.

Under Chapter 22 (Environmental Protection), 2 implementation stages were developed for the 12 directives. With regards to water management, the first stage included Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources and Directive 76/464/EEC with its corresponding secondary directives regarding water pollution by discharges of certain dangerous substances. Stage 2 included Directive 98/83/EC regarding the quality of water for human consumption and Directive 91/271/EEC concerning urban waste-water treatment, modified by Directive 98/15/EC.

Romania obtained significant transition periods and derogations from the application of community norms on many chapters relating to the environmental sector, due to the proven difficulties in application of the acquis communautaire at the date of accession. Transition periods for the water sector are detailed further in the report.

1.2.4 Authorities and responsibilities

The Romanian (1) Ministry of Environment and Sustainable Development (MESD) is the national competent authority for strategic implementation of Water Framework Directive by elaborating environmental and water management policies and with major responsibilities in complying with the acquis communautaire in the field of drinking water, waste waters, biodiversity, monitoring and diminishing the climate change risks, risk management and prevention of the flood-associated disasters, ecological rehabilitation of the historically polluted areas or coastal erosion.

The water sector is coordinated by a (2) Water Department within the Ministry managed by a state secretary responsible for the implementation of governmental program in the water sector and the implementation of Romania’s commitments under chapter 22 (Environment) of the Accession Treaty to EU. The Water Department is organised in 6 directorates: Water Resources Management (WRMD), Emergency Situation Management, River Basins Management, Preparation, Promotion and Supervising of Investment Projects, State Water Inspection, Nature Protection, Biodiversity and Biosecurity.

The Water Department also coordinates the activity of following advisory bodies:

1. The (3) National Commission for Dam Safety and Hydrotechnical Works (CONSIB) coordinates, guides and monitors the surveillance of dams, barrier lakes and other hydrotechnical works, in order to ensure their safe exploitation.

2. The (4) National Committee for the Costal Area (NCCA) coordinates the integrated management plans of the costal area, the urban and regional development plans for communities neighboring the Black Sea as well as environmental impact assessment for any major activity and approval of development projects for protection of natural habitats in the costal area.

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3. The (5) Ministerial Committee for Emergency Situations is responsible with technical coordination at national level for prevention and protection against floods, dangerous meteorological phenomena, accidents at hydro-technical structures or interventions in case of accidental pollution. The (6) National Committee for International Hydrological Program- functioning within National Institute of Hydrology and Water Management is UNESCO’s intergovernmental scientific program in water resources

MESD has under its direct authority respectively under its coordination 2 national administrations with responsibilities in the water sector:

1. (7) National Administration “Apele Romane” (NAAR) was initially reorganized in 1991 as ‘Regia Autonoma Apele Romane” and subsequently included in 1997 under the law for the transformation of autonomous directorates into commercial companies thus creating inadequate prospects for privatization of national waters against their status of strategic resources and public property. The mistake was corrected in 2002 by reorganization of the “National Company Apele Romane SA” as “national administration” in line with European legislation and to ensure sustainable management of water resources.

NAAR is responsible for the quantitative and qualitative administration of public waters, the operation of water management works as well as the implementation of the national strategies and policies in the water sector. The NAAR and its 11 local directorates organized per river basins act as sole operator for natural or artificial surface water resources, as well as for ground water resources.

NAAR is the only legal body entitled to apply the contributions, payments, tariffs, discounts and penalties system towards any water management entity, no matter the ownership including ground waters with the exception of those categories subject of special legislation.

Specific responsibilities of NAAR are: the integrated, sustainable management of surface and ground water resources and their protection against over-utilization and contamination; administration and maintenance of the National Water Management System infrastructure; management, operation and maintenance of the National Hydrological and Hydro-geological Monitoring System infrastructure; management, operation and maintenance of the Water Quality Monitoring System, management, operation and maintenance of the minor river beds, lakes and ponds (natural or artificial), coastline and beaches, wetlands and protected areas as well as granting the right of use of water resources according to water legislation and development of management schemes for river basins.

NAAR has under direct administration:

• 78,905 km of water flows

• 295.6 thousand hectares of wetland

• 270 reservoirs with a total volume of 14.5 billion cubic meters, from which 114 are temporary reservoirs

• 7,100 km of protection embankments along cities and agricultural fields

• 6,600 km of stream regularization and 1320 km of shoreline protecting and strengthening operations 157 channels of catchment totalizing 1100 km

• 59 pumping stations with a flow capacity of 237 cm/s

• 49 water intakes and hydro-technical knots with a total flow capacity of 249 cm/s

• 178 other hydro-technical operations 122 natural lakes.

An European Integration Department function at NAAR headquarter as well as EU Directives implementing bureaus at level of its territorial branches

As a result of the 2002 reorganization, the hydrologic and water management components were integrated in an independent institution named National Institute of Hydrology and Water Management (8) (NIHWM) under the authority of NAAR. The NIHWM is the only specialized national institute representing Romania in the field of hydrology, hydro-geology and water management at a national as well as international level. The institute is responsible for research and development, international programs and agreements Romania is part of (WMO, IHP UNESCO, UE, etc.), data exchange, information and hydrological forecasts at international level,

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implementation of specific products in the water management activity, dissemination of specific information, contributing to the protection of life and goods in case of dangerous hydrological phenomena

(floods, droughts, frost) and drafting and updating the National Fund of Hydrological and Hydro-Geological Data.

2. The (9) National Meteorological Administration (NMA) was established in 1970 and reorganised in 1998 as the national company “Institute of Meteorology and Hydrology”. In 2002 hydrology department is moved to NIHWM and in 2004 the institute is reorganised as national administration and sole operator of the national network of meteorological measurements. NMA has 7 regional centres and performs observations and measurements on weather conditions and evolution ensuring the elaboration of the prognosis and warnings regarding the dangerous meteorological phenomena.

Other relevant institutions with responsibilities in the water sector under MESD authority are:

The (10) Administration of the ‘Danube Delta” Reservation The (11) National Environmental Protection Agency (NEPA) The (12) Environmental Fund Administration (AFM) The (13) National Environmental Guard (NEG)

Chart 1 RO Institutions under MESD coordination and authority

Source: Business Development Group (based on MESD information).

Involvement of bodies under authority of other ministries The (14) National Authority for Regulating Public Utilities Community Services (ANRSC) was established in 2002 as a public institution under the direct authority of the prime minister working in cooperation with the Ministry of Internal Affairs and Administrative Reform (MIRA). ANRSC main responsibilities for the water sector are the regulating, monitoring and controlling public utilities at the central level in the field of water supply, waste water sewage and treatment, collection, sewage and disposal of rain water. ANRSC issues licenses for public utilities operators, elaborates methodologies and framework-regulations for the field of

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public utilities and for the specific market and monitors the implementation of corresponding legislation. It also organizes annual seminaries for public service operators and publishes brochures that detail legislative modifications. ANRSC is based in Bucharest and has 7 territorial agencies.

The Ministry of Public Health (MPH) – is the governmental authority in charge with transposition of EU Directive 98/83/EC on the quality of water intended for human consumption with responsibilities regarding promoting legislative measures for public health protection, establishing the requirements for drinking water, inspection of the drinking water supply systems, surveillance and monitoring of the drinking water quality, public advising and dissemination of information, reporting. MPH cooperates for MPH controls the quality of water used in the food industry, the quality of bottled water; approves, from a sanitary point of view, the products and materials coming in contact with water, ensures the audit monitoring, information and reporting on implementation to the European Commission. The (15) Public Health Institute in Bucharest (ISPB) is a specialized unit of the Ministry of Public Health which coordinates water quality control at national level through the National Reference Laboratory for Monitoring Water Quality. The water laboratory is responsible with monitoring the quality of drinking water, monitoring the risks regarding bathing water quality, monitoring water epidemics and evaluating cases of infant methemglobinemy caused by fountain water. Monitoring activities are performed through county Public Health Authorities. The Ministry of Agriculture and Rural Development (MARD) has specific responsibilities regarding drought management, wastewater from agriculture and food industry as well as defense against floods for embanked enclosures, maintenance of drain and hydro ameliorative systems. The Ministry of Development, Public Works and Housing (MDPWH) manages the plans and financing instruments for the development of water infrastructure as part of local and regional development plans. In 2005 National Committee for Emergency Situations was set as part of the National System for the Management of the Emergency Situations under MIRA and direct coordination of the prime minister gathering decision makers, experts and specialists with responsibilities in ensuring the protection of people and cultural and material values during emergency situations as well as rapid return to normality. In 2007, the Inter-Ministerial Council of Waters was also created with the aim to coordinate and approve the water management strategies and policies in order to facilitate an integrated and durable approach. So far the council (that involves besides the ministries already mentioned above the Ministry of Foreign Affairs, Internal Affairs, Defense, Transport, Economy and Finance, Education and Research, etc) is not fully functional but represents an alternative for coordinated decisions in case of emergency situations generated by waters at national level. Romanian Water Association (ARA) is an autonomous association of employers and professionals established in 1995 under the name “National Committee of Romanian Water Producers and Distributers”. The initial name was changed to ARA in 1999 and from 2003, beside the professional attributes ARA represents, promotes, protects and sustains the professional and labor interests of its members. ARA’s members are water supply and sewerage system operators, administrators of water management infrastructure, representative of syndicates in the water sector and different experts in the water field. ARA ‘s is organized in 6 territorial committees with the goal is to sustain the interests of the public utilities operators in their relations with the authorities and the negations of the collective labor contract in the water sector as well as professional development of its members. ARA supports applied research in the water sector and periodically organizes meetings and seminars, publishes different studies and research results in the water sector. Last year ARA was the host of international symposium organized by the “Water Loss Task Force (WLTF) and in July this year ARA organized in Constanta the seminar “ Slam Management” in collaboration with USTDA.

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Chart 2 RO Governmental authorities cooperating in the water sector

Source: Business Development Group (based on official sources).

1.2.5 Overview of latest policy documents and national development plans

1.2.5.1 Surface water and groundwater quality including management of river basins

The improvement of the quality of the surface and ground waters in Romania is a specific objective of the National Strategy for Water Management. Romania is a contracting party of the International Commission for the Protection of the Danube River (ICPDR) the transnational body in charge with the implementation of the Danube River Protection Convention. The ICPDR states agreed to contribute to the development of the Management Plan of the Danube Hydrographic District as main implementation instrument of the WFD (according with art 13 and annex VII) To this end, partners in the ICPDR agreed to create a Management Plan in 2 parts:

Part A - The General Plan concerning overall basin aspects with cross border impact referring to:

• main water streams for rivers with hydrographical basins > 4000 km2

• lakes > 100 km2

• main channels

• cross-border aquifers > 4000 km2

• Danube, Delta and coastal waters

Part B - National Management Plans of Danube countries The General Plan was already developed and approved by Commission members in 2004. The report is the first comprehensive characterization and analysis for the entire Danube River Basin, in which all 13 Danube countries have participated reflecting the level of preparation of a harmonized and integrated river basin

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management analysis at the date of drafting. All countries of the Danube basin committed themselves to further develop jointly a Danube River Basin Management Plan by the end of 2009. As regards the National Water Management Plan, according with Romanian legislation will be developed under the authority of MESD and NAAR, and will compile the 11 Basin Management Plans targeting the achievement the ‘good status’ of national waters by 2015. The development of the river basin management plans are guided by the HG 1309 /27.10.2005 –Realization of National Program for prevention, protection and mitigation of flood’s effect and the Minister Order for the approval of Methodology and Technical Instruction for elaboration of the planning framework.

Development schedule is detailed in the table below:

Table 1 RO Implementation Stages River basin Management Plan

Actions Framework Directive 2000/60/EC article

Negotiated deadlines

Legislative framework - adopting legal provisions - identifying the competent authority - notifying the European Commission

24 3 (7) 3 (8)

December 2003 December 2003 June 2004

Characterizing the river basin - analyzing the basin characteristics - documenting protected areas - evaluating significant factors and their impact - economic analysis of water utilization - reviewing and analyzing

5 (1) 6 (1) 5 (1) 5 (1) 5 (2)

December 2004 December 2004 December 2004 December 2004 Dec. 2013/ Dec.2019

Monitoring programs - establishing monitoring networks and implementing monitoring systems

8 December 2006

Informing and consulting the public

- publishing the calendar and working schedule (2) - publishing the basin’s most important management issues (1) - publishing the Management Plan draft (1)

14 (1a) 14 (1b) 14 (1c)

December 2006 December 2007 December 2008

Management Plan - elaborating and publishing the management plan - revising the management plan

13 (6) 13 (7)

December 2009 December 2015

Reaching environmental objectives - good state of surface waters - good state of ground waters - protected areas - derogations to reach objectives

4 (1a) 4 (1b) 4 (1c) 4 (4)

December 2015 December 2015 December 2015 December 2027

Recovering water services costs 9 (1) 2010 Source: MESD

1 – obligation to implement measures according to provisions of the Framework Directive 2000/60/EEC. In some cases, deadlines can be further restricted in order to finalize plans at sub-basin levels. Terms for reporting to the European Commission are delayed 3 months after the implementation deadlines. 2 – every 6 years The planning frameworks are used as basic planning structures for establishing the development directions of each river basin and ensure the sustainable management of water resources, aquatic ecosystems and protection of the wetlands in accordance with individual hydro-morphological profile. A planning framework is composed of:

• River Basin Development Plan (RBDP) focused on the quantitative water management component and aims to: achieve and maintain the balance between water demand and available source supply; diminish the negative effects of natural phenomena (flood, drought, etc.); utilize water potential (hydro-mechanic and hydroelectric energy production, etc.); determine environmental water demands. It also includes the action plan for flood protection.

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• River Basin Management Plan (RBMP)) focused on the qualitative water management component aiming to: achieve and maintain good water status; identify the pressure points and impact of human activity on surface waters; limit pollution sources and diminish negative effects; determine water quality demands.

Starting 2005, NAAR established working groups for each basin and planned in cooperation with NIHWM the development of each framework component in order to synchronize the development of all individual basin plans. The development of the plans effectively started in 2006 by contracting (public tendering) studies for substantiation of the plans for prevention, protection and reduction of flood effects (GIS, water cadastre and digital mapping) in the following basins:

• Somes-Tisa, Olt and Banat – awarded to a consortium led by Aquaproiect S.A;

• Buzau-Ialomita (only for Buzau river), Crisuri and Mures - awarded to a consortium led by BloomInfo - Geonet SRL;

• Jiu - awarded to a consortium led by Geodis, Brno;

• Siret - awarded to a consortium led by Halcrow Romania. Even announced for beginning of 2008, the contracting of consultancy services for the rest of the other 3 directorates and Ialomita river is still in progress because lack of financing (budgets underestimated and new allocations not approved). At the end of October 2008 the Prut Directorate launched the call for projects for the development in the plan for Prut Barlad river basin (financed by state budget), while the Arges Vedea directorate published only the letter of intention, actual call for projects being expected beginning of 2009 (financing by EU sources). Dobrogea-Litoral is still waiting for government decision on financial allocation probably in the beginning of 2009. In 2007 MESD and NAAR elaborated the “Management Plans of the River Basins in Romania- Major Problems in Water Management” - as part of the National Water Management Plan. By the end of 2008 MESD plans to review characteristics of the River Basin District including significant pressures and their impact assessment on water resources, integrated water monitoring, setting the preliminary register of protected areas; economic analysis of water use and water users; developing the environment objectives; preliminary program of measures and setting up the draft of River Basin Management Plan. These steps will be followed in 2009 by public information and consultation (for a period of 6 months), finalization of RBMP, including case by case the observations and recommendations of stakeholders.

1.2.5.2 Flood risk management (including adherence to EU Flood directive)

Directive 2007/60/EC on the assessment and management of flood risks entered into force on 26 November 2007 and is not transposed as such in the Romanian legislation. Floods occurred on an extended scale in Romania in 2005, affecting more than 1,5 million people, 43 000 houses, 590 social facilities and buildings, 4 682 bridges and 10 334 km of roads. Immediately after the three big flood events which had disastrous consequences, the Romanian the Government adopted the Short Term National Strategy for Flood Risk Management (GD 1854/2005). The purpose of the strategy is to reduce flooding impact on people and property, and also to define the specific regulation and operation responsibilities for central and local administration authorities, for the population and economic agents. A large part of the Strategy is dedicated to educating the public with regard to appropriate behavior before, during and after floods, and to the importance of flood management (including issuing warnings). The Strategy also approaches issues regarding the legal provisions that regulate flood management and regulations for occupying hydrological areas targeted for controlled flooding and protection works, provides procedures and practices for identification, analysis, assessment, monitoring and administration of the flood risks. It also includes the main actions for the risk floods management prevention (prevention and protection), effective management (during floods phenomena occurring) and actions taken after floods generation. Another important document is the GD 1307/2005 establishing the program for the implementation of the National Plan for Prevention, Protection and Mitigation of Flood Risk including stages, costs and allocation of resources. The process for elaboration of the Medium and Long Term National Strategy for Flood Risk Management was initiated in 2006 under PHARE financed project 2005/017-690.010.01 “Contribution to the development of the flood risk management strategy. The National Strategy and Action Plan on medium term (2007-2009) defined the ‘actors’ that must take action in case of flood and set specific targets to be reached by the end of 2009 in the following fields of action: the rehabilitation of the internal rivers, the management plans of the river basin at high risk for population and environment, rehabilitation of the Danube river and the maintenance of the infrastructure for floods defense. The river basins management plans that will be finalized by the end of 2009

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will be subsequently integrated in the Long term National Plan for flood risk management focused on prevention, protection and preparedness. The Sectorial Operational Program Environment has also specific objectives for financing projects for the development of the infrastructure for flood prevention and reduction of the destructive consequences of floods, development of hazard and flood risk prevention maps, plans and measures, including public information and training in reducing risks. Following the floods in summer 2008 the Chamber of Deputies initiated debates on the necessity to speed up the implementation of the EU Flood Directive especially as regards flood risk maps (NAAR recently declared they will be finalized by 2011). The drought management policies in Romania are within responsibility of MARD. A national strategy on reducing drought consequences, preventing and control of soil degradation and desertification was adopted in 2000 but never implemented due on one side to the lack of political decision of subsequent governments and on the other side to the fact that planned actions such as rehabilitation and extension of the irrigation systems or land management measures on degraded soil were included without a financial substantiation and feasibility analysis. As a result budget resources were allocated for agriculture sectors with more urgent needs and potential higher efficiency. EU accession starting 2007, the most sever drought in the last 60 years that registered in Romania in the same year as well as climate change prognosis on long term, imposed an updating of the strategy from crisis management to risk management based approach. Last update was done in April 2008 but is given still very low chances for success in terms of practical implementation.

1.2.5.3 Coastal protection and quality of coastal waters

According with obligations under chapter 22 of the EU Accession Treaty, Romania set as priority the elaboration and implementation of the National Plan for Protection and Rehabilitation against erosion of the Romanian Black Sea Coast as well as promoting integrated management of the costal area according with EU recommendations in the field. National legislation is law 310/2004 and Law 280/2003 for integrated management of costal area and the statute of National Committee of Costal Area. The Sectorial Operational Program Environment includes specific targets for rehabilitation of Black Sea shore affected by erosion. The latest legislative proposal of MMDD is to modify HG 632/2007 which regulates the rental regime for public domain under NAAR administration. Up to now only the river beds, the shores, the beaches and the barrier basin were subject of rental to third parties. Through this proposal MMDD would like to enable the rental of territorial marine waters as an economic opportunity to attract future investments and the development of the marine aquaculture industry.

1.2.5.4 Water management, municipal and rural wastewater treatment

Directive 91/271/EEC regarding urban waste water treatment and the 2 other EU Directives directly related to it respectively Directive 91/676/EEC regarding the protection of waters against pollution caused by nitrates from agricultural sources and Directive 2006/11/EC (replacing Directive 76/464/EEC) and “daughters” directives regarding water pollution by discharges of certain dangerous substances into the aquatic environment of the community are fully transposed in the national legislation as detailed in Annex 1. Other Directives that control the disposal of the sewage sludge produced as a result of the implementation of urban waste water treatment directive are:

• Directive 86/278/EEC on the protection of the environment, and in particular of the soil, when the sewage sludge is used in the agriculture was transposed in Romanian legislation by MESD & MADR order 708/2004 for the approval of Technical Norms for the protection of environment and, especially, of soils when sewage sludge is used in agriculture.

• Directive 99/31/EC on the landfill of waste is transposed in the environment legislation by GD 349/2005 regarding the landfill waste, MESD order 1274/2005 regarding the environmental permit at the closing of landfill, respectively storage and incineration of waste, MESD order 757/2004 for approval of the technical normative regarding the waste storage amended by the MESD order 1230/2005 MESD order 775/2006 for approval of the list of isolated localities that can store municipal waste in the existing places

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Main policy documents in this field are the Implementation Plans elaborated in 2004 to include approach, objectives, transition periods and costs. Transition periods for implementation are set for the end of 2021 for Directive 91/271/EEC (by 2018 for localities with 2000-10000 equivalent population and by 2015 for localities with more than 10000 equivalent population) and for the end of 2013 for Directive 91/676/EEC. Transition period for implementation of Directive 76/464/EEC is set by the end of 2014.The established targets are sustained for implementation by subsequent legislation aiming investments in the infrastructure development such as the GO 7/2006 for the Development Plan for Rural Infrastructure development. Total costs for implementation are evaluated at 9.5 billion EURO. Subsequent policy documents of importance are:

• the MESD Order 31/2006 to approve the Manual to modernize and develop the Integrated Romanian Water Monitoring System (SMIAR), which establishes the List of dangerous substances to be subject to an annual minimum monitoring, as well as the basic List of dangerous substances to be subject to extended periodic monitoring every 6 years;

• the action plans regarding integrated pollution prevention and control (IPPC) by technological renewal, reorganization and financial evaluation were developed in cooperation with industrial players subject to Directive 76/464/CEE. Out of the 719 units under analysis, only the industrial units that surpassed GD 351/2005 emission limits were included in the development of technological renewal plans. An inventory was made of pollution sources included in List I. Metals included in List II were monitored at industrial discharge sites, and the quality of surface waters from List I was monitored.

As regards the implementation of the landfill Directive 99/31/EC, at present the existing landfills both of municipal and industrial waste are identified, inventoried and classified. Also the planning for closing the existing waste landfills and the construction of the new ecological ones was developed including responsibilities of the public administration institutions.

As regards bathing water Directive 2006/7/EC, the Romanian government has recently passed a Decision regulating the quality management of bathing water taking into consideration both environmental and human health protection The decision completes the existing legislation (GD 88/2004, GD 459/2002) and sets the legal framework for the monitoring and classification of the quality of bathing water, as well as for the public dissemination of information regarding bathing water. The authorities responsible for protecting users from unsafe bathing water are County Health Authorities and River Basin Directorates. These authorities monitor bathing facilities according to a pre-established schedule and, if necessary, issue safety warnings. Starting with 2008, the Bucharest Public Health Institute and NAAR must draft a list of bathing waters by 15.05, each year, and submit this list to MDPWH by 25.05. Results of the monitoring process are issued each year by 15.10 (at the end of the bathing season). Based on yearly monitoring, a classification of bathing waters is targeted by the end of 2015, with the following categories: unsatisfactory, satisfactory, good, excellent. The methodology of monitoring and evaluating bathing areas is pending approval through an Order of the Ministry of Public health.

Main governmental programs setting priority investments for reaching the objectives for the development of municipal water and environmental infrastructure are:

• National Strategic Reference Framework 2007-2013;

• National Rural Development Program 2007–2013;

• National Strategy for Water Management;

• National Strategy For Sustainable Development Of Public Services for Water and Wastewater Infrastructure Systems (2005-2025);

• Sectorial Operational Program for Environment 2007 –2013 (Priority Axis 1 “Extension and modernization of water and wastewater systems).

1.2.5.5 Drinking water

Directive 98/83/EC on the quality of water intended for human consumption, amended by Regulation (EC) No. 1882/2003 is totally transposed in national legislation by Law 311/2004 (amending Law 458/2002). The Law 311 stipulates in the annexes 1 and 3 the quality parameters for the drinking water, the values and maximum concentration for the qualitative parameters as well as specifications for the qualitative parameters analysis. Both are to be updated periodically through governmental decisions. Transition period for implementation was set for 2015 and is carried out based on the Implementation Plan developed by Romanian Government in October 2004. Total costs for implementation are evaluated at 5.6

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billion EURO and Article 13 of the Directive imposes the obligation of the Member States to ensure that information on the quality of water and on the measures taken for the implementation of the Directive is available to consumers. Information on all domestic water supply systems exceeding 1 000 m3 per day as an average or serving more than 5 000 persons must be included in reports to be published every three years and submitted to the Commission. The first report shall cover the years 2005, 2006 and 2007 and is due for end of 2008. Relevant policy documents issued after 2004 are:

• GD 662/2005 to approve quality Norms for surface water used for human consumption, and norms for methods of measurement and the frequency of sampling and analyzing surface drinking water (amending GD 100/2002). In turn, GD 100/2002 was amended by GD 567/2006 regarding the modification of quality norms of NTPA-013 surface drinking water.

• GD 930/2005 approving special Norms regarding the characteristics and size of the sanitary and hydrological protection areas, amending GD 101/2002.

• Ministry of Health Order 1276/2005 regarding the modification of Ministry of Health Order 764/2005 to approve the registry with the Ministry of Health of laboratories which monitor the quality of drinking water within the official drinking water inspection process.

• Cooperation Protocol between the authorities involved in implementing drinking and bathing water directives: Ministry of Health, MESD, MIRA, ANRSC, Ministry of Transports, MDPWH.

1.2.5.6 Crossborder and international partnerships

Romania plays an active role in fostering cross border partnership and international cooperation in the water sector. Most recently (beginning October 2008) Romania hosted the International Conference on the implementation of the European Water Framework Directive, gathering 195 participants from basin organizations and national administrations as well as representatives of NGOs and private companies representing 29 countries. Romania signed and is part of wide number of crossborder and international partnership as mentioned bellow:

• Convention regarding the Black sea protection against pollution, signed in Bucharest on 21 of April 1992 - Law 98 / 16.09.1992;

• Convention regarding the cooperation for protection and durable use of Danube River signed in Sofia on 29 of June 1994 - Law 14 / 24.02.1995;

• Convention regarding the protection and use of cross borders water corps and of the international lakes, signed in Helsinki in 1992 - Law 30 / 26.04.1995

• Agreement between Romanian Government and Ukraine Government regarding the cooperation in border water, Galati, 30 of September 1997 - Law 16 / 11.01.1999

• The Water and Health Protocol at the Convention regarding the protection and use of the cross borders water corps and international lakes, London 17 of June 1999 - Law 228 / 30.11.2000

• Memorandum of cooperation in the area of water management between MMDD, Ministry of Environment and Water Management and Ministry of Durable Development from France, signed on 18 of October 2001

• Initiative from Budapest (adopted at prime-minister level) regarding the strengthening of international cooperation for durable management of flood, signed in Budapest on 1st of December 2002

• Agreement between Romanian Government and Hungarian Government regarding the collaboration for protection and durable use of the cross border waters, Budapest 15 of September 2003 - HG 577 / 15.04.2004

• Memorandum of Understanding between MMDD and Ministry of Transport, Public Works and Water Management from Nederland regarding the cooperation in the area of integrated water management, Bucharest, 14 of April 2004 - HG 1105 / 15.07.2004

• Memorandum of Understanding between MMDD and the National Meteorological Service – Oceanic and Atmospheric Administration of USA regarding the technical cooperation in the areas of hydrology and meteorology signed in Bucharest on 21 of September 2004 - HG 2422 / 21.12. 2004

• It was signed also a Memorandum of Understanding with the Engineers Body from the USA army regarding the cooperation in the area of water management.

• Agreement between MMDD and Ministry of Water end Environment from Bulgaria regarding the cooperation in the area of water management, signed in Bucharest on 12 of November 2004- HG 2419 / 21.12. 2004

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• Declaration between MMDD and Ministry of Environment from Bulgaria, Ministry of Environment from Moldavia, Ministry of Environment and Natural Resources from Ukraine regarding the cooperation for creation of the Green Corridor in the Inferior Danube signed in Bucharest in 5 of June 2000

• Declaration of collaboration in the area of water management between MMDD and Ministry of Environment, Health and Consumer Protection from Bavaria, signed in Munich on 25 of April 2005

• Protocols between MMDD and Ministry of Water Resources Management and Development from Kenya, Ministry of Environment and Nature Protection from Senegal, Ministry of Water Management from China Republic

MESD also signed Memoranda of Understanding (MoU) in the field of environmental protection, with the Ministry of Housing, Spatial Planning and Environment of the Netherlands. The current MoU is in force until September 2009 and is aiming, among other wider objectives, at strengthening the bilateral cooperation in the framework of the “Environment for Europe” process. The Dutch Union of Waterboards has also signed a MoU with its Romanian counterpart NAAR. Also 6 of the Dutch waterboards (Rivierenland, Rijn en Ijssel, Groot Salland, Regge en Dinkel, Reest en Wieden and, since August 2007, also Velt en Vecht) are actively involved in water projects in the county of Teleorman, at the initiative of the twin Dutch Province of Overijssel. MDPWH is also playing an important role as the implementing authority of European territorial cooperation programs, some of which include water management actions (see details in chapter 4).

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2 Market Insight

2.1 Water Supply & Sewage

2.1.1 Applicable regulations, standards, government policies

The general regime of the water supply in Romania is defined by the Law 107/1996 with subsequent amendments. The water supply and sewerage services are organized in accordance with the Law 241/2006. The regionalization of public utilities has proven essential for Romania, as the former public utilities system did not facilitate the maintenance and operation of public utilities networks, and could not support investments in the rehabilitation/expansion of water/waste water infrastructure. In many localities, public utilities are a department of the local council and, as a consequence, they depend on the local budget. In small and medium towns in particular, no major investments were made after 1990 to maintain and develop the essential infrastructure, resulting in a poor status of the public utilities networks. Rural communities at a greater distance from urban centers, unable to associate will not be able to benefit from SOP ENV projects. For this reason, the government has allocated state budget funds, through MDPWH, to ensure that villages are equipped with water infrastructure. Depending on the budgetary financial support, the multiannual program is estimated to be continued until centralized water supply systems are provided to all Romanian villages (see details on available programs, application procedures and eligibility criteria in chapter 4).

2.1.2 Infrastructure status and applicable technologies

In 2007 Romania, water supply in a centralized system is made available to 87.6% of urban areas and 15.1% of rural areas.

Currently, in Romania, 1,888 communities (268 urban and 1,620 rural) benefit from centralized water distribution systems. Drinking water distribution networks have a length of 47,780 km, covering 70% of total urban street length and ensuring water supply for 92% of the urban population. In rural areas, 80% of communes with over 10,000 inhabitants have a water distribution network, as do 60% of communes with 5,000-10,000 inhabitants. However, only 20% of communes with fewer than 10,000 inhabitants benefit from these utilities. The current centralized water supply systems have a capacity of 120 m3/s, 48 m3/s from ground sources and 72 m3/s from surface sources (including the Danube).

The traditional water distribution system uses steel (seldom galvanized) pipes to transport water often corroded and causing infiltration of impurities in the drinking water. Metallic pipes also generate significant losses in the distribution network (up to 50%), which are subsequently reflected in the price paid by the consumer. New supply networks use copper, pexal piping system

1 or polypropylene pipes. Current drinking

water standards prioritize drinking water sources according to the following hierarchy 1/artesian pressure fountains, 2/non-pressure sources (including springs), 3/ground water sources, 4/surface water sources. In practice, surface waters are the source of most drinking waters. For example in Bucharest, only 10% of water resources are obtained from ground water, the remaining 90% being sourced from the Arges River. Surface drinking water is usually purified in a treatment station (water plant) while ground drinking water is simply treated with chlorine.

The status of water supply has been significantly improved through pre-accession programs. After 1990, and especially during the pre-accession period 2000-2006, Romania benefited from several EU financing programs (ISPA, SAPARD, PHARE) that ensured the execution of infrastructure works in the field of water supply, waste water purification and transportation, especially in large urban areas (over 150,000 inhabitants). ISPA was the main instrument for financing environmental infrastructure projects before Romania’s EU accession focused on large urban agglomerations (list of main ISPA projects relevant Annex 2). SAPARD was implemented by MARD and aimed to support accession efforts and to prepare Romania’s participation to the

1 a multi-layer pipe connected with brass fittings

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Common Agricultural Policy. SAPARD also funded water and sewage projects in the rural area. Both programs ceased in 2007 but have ongoing projects until 2009-2010.

Small communities fewer than 150,000 inhabitants benefited of SAMTID (the Infrastructure Development Program for small and medium urban communities) launched in 2002. The program was co-financed by PHARE grants, EIB and EBRD loans as well as direct contribution of state budget. The pilot was designed in 3 phases: pilot phase, expansion phase and consolidation phase. The pilot phase included 6 counties (Alba, Botosani, Calarasi, Hunedoara, Cluj-Salaj), and the expansion phase comprised 9 counties. This program was also the first to impose the regionalization of public utilities at county level by setting up a regional operator. SAMTID projects are scheduled for finalization in 2008.

Despite the implementation of pre-accession projects in the field of drinking water treatment and distribution systems (modernization/expansions), which mainly benefited large urban agglomerations, most of the existing drinking water supply infrastructure is outdated and poorly-equipped for exploitation.

According to current legislation the pipes used for water supply must hold an Aviz Sanitar (Sanitary Permit) issued by MPH and a Technical Agreement issued by State Inspectorate in Constructions. The sanitary permit can be obtained from the regional public health offices (Directii de Sanatate Publica) according with the conditions specified in the MPH Minister Order 117/2005. The Romanian market offers a wide choice of water supply and sewerage systems made out from a wide range of materials from PVC to High Density Polyethylene (HDPE). Pipes for water supply must be licensed according with quality management standard SR EN ISO 9001: 2000. Pipes are produced according to the regulations NFT 54-063, ISO 4427-1:2007 and DIN 8074. The size varies from 20 mm to 400 mm.

2.1.3 Specifics in urban and rural areas

All urban agglomerations operate centralized drinking water distribution systems. However, some areas in these agglomerations (such as for example districts within city of Bucharest) are not connected to the centralized system. In residential areas (usually built outside the centralized network) drinking water is usually obtained from individual wells (50-100 m deep). Many towns are also faced with disruptions of the distribution of drinking water, due to limited water resources.

Most rural areas do not operate centralized water distribution systems. Household water is obtained from individual wells that only reach the intensely-polluted water table, greatly endangering the health of the population. Local environmental agencies and local public health directorates are obligated to inspect all wells in the rural area, and issue warnings with regard to water quality. In the few rural areas where a centralized drinking water distribution system has been set up, households are not individually connected (street distribution system) which makes cost recovery extremely difficult The rural population usually refuses individual connection to a centralized water system, due to the high costs of connection works and the high price of water. Current legislation also discourages individual connection to the water system – households that are directly connected must also set up their own sewer/treatment system, while street distribution only involves manhole evacuation and the sequential construction of a common sewerage/treatment system.

2.1.4 Water companies – operational, technical and financial management

Before 1989, 42 utility (water/sewerage) operators used to function as public services departments within local councils. Following a reorganization process in the 1990, these operators became “Regie Autonome”, subordinated to the local councils and the water and sewerage infrastructure was defined as “public patrimony” belonging to the local authorities. This resulted in increase up to 400 operators in 1992. In order to reach EU standards in water management, Romanian government (with EU financial and technical support), subsequently adjusted legislation in order to encourage local authorities in setting up viable operators in the water sector. In order to facilitate their development on commercial basis the autonomous companies were reorganized into commercial companies, also subordinated to the local councils. Subsequently, based on geographical, technical and economic criteria, communities began to form associations and concentrate in single regional water operators. The regionalization opens possibility for larger investments, better operational management, decrease of water losses, energy costs savings including unified tariffs for a larger area.

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In 2007, MESD underwent important steps for the modification and completion of Romanian public services legislation, in order to better reflect the strategic approach promoted through SOP ENV. The main purpose of these modifications was to ensure conformity with EU in-house rules for attributing water and sewage services commissioning contracts. Negotiations were finalized with the approval of GO 13/2008 to modify Law 51/2006 regarding public utilities services and Law 241/2006 regarding water supply and sewerage services.

At present In Romania 107 companies hold licenses to operate a water & sewerage system (both services are usually provided by the same operator). Licenses are issued by ANRSC based on quality service standard categories and are valid for a limited period of time within maximum 5 years.

Romanian legislation incorporates the concept introduced by the WFD that “water is not a trading product, but it produces an economic value” as well as the principles of the economic mechanism in the water field by which the user pays, the polluter pays, the quantitative and qualitative water management costs must be recovered, beneficiaries should be stimulated to protect the water resources. For the rational management of water resources and for water resources protection against exhaustion and pollution, in connection with the water management and sustainable development principles, Water Law no. 107/1996 (amended by Law no. 310/2004) introduces the obligation of water user to request and obtain a “water management permit”, starting with the designing stage. The permit regulates the regime of the works carried out on water or related to water and the social-economical activities, with potential negative effects on the environment. The putting into operation or the operation of these works is made only on the basis of a “water management licence” granted by NAAR through its specialized departments organized for this purpose both at central and local level, on each River Basin Water Directorate. The license guarantees that the economic agent is able to carry out production activities and services that do not endanger the waters quality at the source, but does not give the right to further use services for ensuring the raw water at the source and other specific joint water management services rendered by NAAR without a subsequent commercial contract signed with the latter. The water management permits and licences also refer to sludge land-filling or use that should reduce to minimum the negative impact to environment. In Romania, the economic mechanism specific to the waters’ quantitative and qualitative management includes the payment, bonuses and penalties system, that ensures partly the financing of the development of the water sector and guarantees NAAR is functioning based on economic principles. At the same time the tariffs are diferentiated in order to support the preservation, reuse and saving of the water as well as protecting its quality and quantity into: source categories, user categories and categories of discharged wastewater pollutants. Payments are on monthly basis and discounts up to 10% of yearly value of tariffs can be applied for users that prove a high concern for rational use and protecting water quality.

The structure and levels of applicable tariffs is still subject of debate mainly as regards keeping the balance between the need to improve infrastructure and social affordability. Basically the system takes into consideration operational costs (raw water and materials, energy and fuel, spare parts, salaries, third party services, financial expenses, income tax, repair and maintenance) depreciation and provisions for replacement of assets as well as profit (for loans repayments and development).

The price of raw water supplied by or discharged to NAAR is regulated by the government and is differentiated for regional operators and industrial/agricultural users. Regional operators are the ones setting the prices to be paid by the final consumer for drinking water and sewerage, with the approval of ANRSC. Their prices are differentiated regionally and per category of consumers (population or industrial). As indication presently private consumers pay drinking water from highest 2.63 lei /mc (Oradea, Bihor county) up to lower 2.09 lei/mc (Neamt). In Bucharest current price is of 2.45 lei/mc.

The regionalization strategy aims to concentrate public services on geographical basis either per river basin or within administrative borders and to increase the efficiency of water/sewerage services, while maintaining acceptable prices, and make this type of services more attractive to investors (forming PPPs). Regionalization is achieved by re-organization of local pubic services based on 3 main elements:

• the Intercommunity Development Association (IDA)- is and association of counties and/or municipalities with the purpose of managing local public utilities;

• the Regional Operating Company (ROC)- commercial companies owned by all or some of the IDA member communities, self-sustainable by implementing efficiency and cost recovery principles in their operations;

• a Services Management Commissioning Contract by which administrative units transfer duties, responsibilities and management with regard to public water supply and water sewerage systems to ROC

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IDA’s coordinate ROCs and act in the common interest of its member communities with regard to water and sewer services – general strategy, investments, pricing. This measure has been proven to be essential in Romania, especially for small and medium towns and for the rural area. The purpose of regionalization is meeting the performance objectives established in SOP ENV, by 2018. It is envisaged that 50 regional operators will be set up and developed by merging local utilities companies into a ROC. The set up of the regional operators for water supply and waste water management took place in almost all counties as shown in the map bellow (data from May 2008). In all counties at least one IDA is formed even if not totally functional. There are also situations where the ROC is formed officially but did not take over the other public utilities in the region. Most of the IDA’s started with the unification of the county council and the county residence council so most of the ROC’s will be created on region basis. There are also some exceptions – for example Apa Somes from Cluj is operating both in Cluj and Salaj. In Ialomita county, where the program SAMTID failed to create the IDA the local council of the city Urziceni decided to join the ROC in the county Calarasi- Ecoaqua Calarasi (an IDA was formed eventually in Ialomita in October 2008). Map 2: Regional Operators in Romania

Source: County Councils websites

Water and sewerage infrastructure (supply networks, purification stations, with all installations, buildings, etc) remain public property and as a result existing infrastructure and all investments performed during the period of contract validity remain in the property of public authorities. There are only 2 exceptions from the above format in Bucharest and Ploiesti, Prahova county where from 2000, the municipal water services are subject to concession contracts to private company Apa Nova for a period of 25 years.

In 2007, MESD took important steps for the modification and completion of Romanian public services legislation, in order to better reflect the strategic approach promoted through SOP ENV. The main purpose of these modifications was to ensure conformity with EU in-house rules for attributing water and sewage services commissioning contracts. Negotiations were finalized with the approval of GO 13/2008 to modify Law 51/2006 regarding public utilities services and Law 241/2006 regarding water supply and sewerage services. The SOP

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ENV aims as main objectives to improve the quality and access to water and wastewater infrastructure, by providing water supply and wastewater services in most urban areas by 2015 and by setting efficient regional water and wastewater; consequently the government regionalization program aims to create approx. 50 strong regional operators.

2.2 Water Quality

One way to improve the quality of waters and the physical aspect of rivers is to promote and active river rehabilitation program. The ecological rehabilitation of rivers is an essential part of water management. Ecological rehabilitation targets both the water ways and its neighboring areas (banks, flood areas, etc.), which play an important role in the development of the flora and fauna. This rehabilitation is planned at basin level, from upstream to downstream. The new river management concept, “More space for rivers”, involves balancing social, economic and ecological needs. For this purpose, the National River Rehabilitation Center was set up, in order to facilitate the exchange of information in the field and to promote the issue of ecological rehabilitation in Romania.

In 2006, MESD adopted the “Norms for classification of the surface waters quality for establishing ecological status of body waters” that approves the biological, hydro-morphological, chemical and physical-chemical quality elements in view of assessment of ecological status for continental aquatic ecosystems –rivers, lakes natural, artificial or irreversible modified.

2.2.1 National monitoring system for water quality (observation, operational, investigation)

Water quality monitoring is within responsibility of NAAR and is performed through the national water monitoring system implemented at basin level (via the 11 water directorates) based on 3 types of monitoring:

• Surveillance monitoring – with the role of evaluating the status of all water bodies

• Operational monitoring – for bodies of water that are at risk of not meeting the water protection objectives

• Investigation monitoring- for identification of causes for not meeting quality standards, for bodies of water that cannot achieve environmental objectives or for the impact assessment for accidental pollution

The water quality monitoring system is divided into 7 sub-systems: rivers, lakes, ground water, protected areas, coastal waters, transitory waters, used waters. Each directorate must monitor all 7 sub-systems, or the sub-systems that are geographically available.

The monitoring network for surface waters combines:

• The daily and weekly rapid flow monitoring network

• The base monitoring network (for those sites with less than 10% human influence)

• The drinking water capture points monitoring network

• The border rivers monitoring network

• The surveillance monitoring network (each trimester)

• The operational monitoring network (each month)

The used water sub-system also monitors pollution sources with direct evacuation in natural receivers. The monitored indicators are: evacuated volumes, dangerous quantities, the operational status of purification stations, etc.

In order to monitor ground waters, several categories of hydro-geologic stations were set up:

• Order I – in main river valleys and around lakes; monitoring the connection between ground and surface waters

• Order II – in plains, on rivers; monitoring the effect of climate factors on ground water

• Stations in main aquifer caption areas – following the effects of exploitation on ground waters

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• Experimental stations – researching ground water from the point of view of pollution, etc.

• Stations set up around important industrial sites

The monitoring system is only partially covering the standards requested by EU legislation and mainly as regards the surveillance monitoring. NAAR further plans to optimize its activity by adjusting approach, improve expertise and technical endowment for increasing the capacity to monitor new biological components/elements in expanded research environments.

The Ministry of Health is responsible for monitoring the quality of the drinking water supply through county Public Health Authorities.

2.2.2 Certification (including potential for private water certification)

According to current legislation, all public utilities operators must obtain and Operating License from the National Authority for Regulating Public Utilities Community Services (ANRSC). ANRSC issues operating licenses structured in 3 classes, and with different valid periods, depending on the class. The ANRSC license is mandatory for companies involved in capturing, treating, transporting and distributing drinking and waste water, as well as in collecting and treating waste water.

Public utilities operators as well as consultancy companies that implement water projects in Romania must also be certified for quality and environmental management, according to SR EN 9001:2000 and SR EN 14001:2004. More and more operators attempt OHSAS 18001 certifications, for workplace health and safety management. The most recent certification available for drinking water suppliers is ISO 22000:2005 concerning food safety. Certifications obtained from accredited EU companies are available in Romania, alternatively organizations in Romania such as RENAR, ASRO, SRAC, SIMTEXETC, etc., can also perform accreditation procedures.

The certification of drinking and waste water is performed according to enforced standards, in laboratories with a SR EN ISO CEI 17025:2005 certification and according with the “Framework Rules for the organization and operation of the public services for drinking water supply and sewerage” approved by MIAR order 140/ 03.02.2003 that regulates licenses and permits for the community public services sector. According to MPH Order 764/2005, all laboratories that monitor drinking water quality must register at the National Reference Laboratory for the Monitoring of Water Quality, part of Public Health Inspectorate Bucharest. This mandatory registration confirms the competency of laboratories to perform physical, chemical and bacteriological analyses of drinking water.

Waste water purification stations/equipment must be certified according to SR EN 12566. Inspection authorities in the fields of drinking water, waste water, surface water, water supply installation, sewages and pre-purification installations must be certified according to SR EN 45004:1997.

Consultancy companies that implement water projects in Romania are certified ISO 9001, ISO 14001 and OHSAS 18001.

2.2.3 Research and development

Research activity related directly to water resources management is done by The National Institute of Hydrology and Water Management (NIHWM) which is the only specialized national institute representing Romania in the field of hydrology, hydro-geology and water management at a national as well as international level. Research on water quality, water supply systems, waste water treatment technologies or the fluids mechanics is done within the National Institute for Research and Development for Environment Protection - I.C.I.M. Bucharest. They run different research programs based on national (CEEX, MENER, BIOTECH, CALIST etc) or international funds (USAID, PHARE, ISPA, MATRA, etc). In the water sector some of their most important finalized programs are: “Interactions between river-sediment, soil-groundwater as a support in the water corps management and the integrated model at real scale for substantiation of decision in water and environment management for river Tisa, and ‘Sorting method for information and data that support the implementation of the WFD. ICIM is also – Experimental Unit AEWS-Danube, National focal point EUROWATERNET, national counterpart for UNEP-Ch.-I.R.P.T.C., Haskoning and Senter Nederland for various projects.

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Research on environment pollution and environment technologies (including water) is done also within the National Institute for Research and Development for Industrial Ecology –ECOIND based in Bucharest with 2 subsidiaries (in Timisoara and Ramnicu Valcea). Ecoind is running different research programs as PHARE, Cost, Unido, Ispa, Leonardo da Vinci, Eureka, projects in Environmental Programmes of the Balkan Environmental Association (B.EN.A) and different bilateral projects with other research institutes and universities. Danube Delta National Institute for Research and Development – located in Tulcea- carries out basic and applied research to scientifically support the management in the DDBR and other wetlands of national and international importance for the biodiversity conservation and sustainable development. The research of the institute is focused on: structure, evolution and function of wetland, monitoring of the environmental factors, modeling the processes that are the basis of ecosystem functioning, ecological restoration and ecological rehabilitation of threatened species and also consultancy for harmonizing the Romania’s legislation with the E.U. policy in the environmental area. The institute also carries out studies for environmental strategies, remote-detection techniques for processing satellite images impact and environmental balance studies, software for land use and hydraulic/hydro chemical modeling, data base/GIS applications, thematic maps – soil, vegetation, ecosystems, bird colonies, ecotourism.

2.3 Waste water treatment in urban and rural areas including sanitation

Implementing the used water purification Directive 91/72/EC is a complex and costly issue for Romania, since only 52% of the population is connected to both the water supply network and the sewage network, and over 71% of waste water is untreated or insufficiently treated. The main projects completed or initialized in the pre-accession period were:

• Modernizing the water and waste water infrastructure in the Cris basin (6 municipalities and there adjacent areas), in Vaslui county (4 municipalities) and in Ploiesti

• 73 ISPA projects in municipalities with over 150,000 inhabitants

• MDPWH’s 2006-2009 program focused on supplying water to villages and rehabilitating water and sewage systems and purification stations in communities with under 50,000 inhabitants (SAPARD funding)

• Rehabilitating the water/used water infrastructure in Arad and Bucharest

• 164 projects for building purification and sewage networks in the rural area

• The 2006-2009 program for developing rural infrastructure in 452 communes (state budget, approved through Ordinance 7/2006)

• World Bank (WB) funded project through which 14 localities in Arges counties benefit from water/waste water infrastructure investments

• Projects for 15 counties prepared through ISPA technical assistance (actual works began in 2008, and are estimated to be finalized in 2012)

The government strategy specifies that, by the end of 2013, all urban communities with over 10,000 inhabitants should be connected to waste water systems, while the remaining urban communities (2,000 – 10,000 inhabitants) are scheduled for connection no later than 2018. Currently, out of the 2,346 localities with 2,000 – 10,000 inhabitants, only 269 are connected to sewage networks. At the end of 2018, 2,600 communities should meet European standards for the collection, treatment and redirection of waste water.

The first actions taken to implement the Directive were the completion and review of internal legislation, and the completion and consolidation of the institutional framework. In order to promote investments in wastewater infrastructure, several central governmental institutions became involved: MESD, the Ministry of Internal Affairs and Administrative Reform (MIRA), the Ministry of Development, Public Works and Housing (MDPWH) and MARD. Through Law 310/2004, the Inter-ministry Water Committee was set up in order to increase the efficiency of governmental water intervention.

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2.4 Market innovation and compliance with regulation in industries with a high water usage

The main categories of water consumers in Romania are the population, the industry, agriculture and tourism. While at a global level agriculture is the main water consumer, using 80% of water resources, in Romania the industrial sector is the leader in the water consumption hierarchy, with 78% of national water resources used. Industrial agents are also the main polluters in Romania, despite all regulations aiming to reduce water pollution from industrial sources.

Between 1990 and 2007, water consumption in Romania decreased dramatically, from 20.4 billion m3 to 6.08 billion m3. The main reduction was registered in the agriculture sector, where an initial water demand of 9 billion m3 decreased to 0.5 billion m3. A large part of irrigation systems were destroyed and most of the remaining systems are out of use, resulting in a 0.5 mil ha irrigated surface in 2007, out of an initial 3 mil ha. In order to increase the efficiency of irrigation in Romania, while maintaining water resource utilization at a low level, the Romanian government approved funding for 140 deep-drilling in areas where ground water could be a viable solution for agriculture. Another option currently under consideration is investing in modern technology that can help reduce loss in the irrigation system, thus decreasing water resource consumption. The government strategy for water usage in agriculture also includes financial support for farmers that build their own irrigation system or create new water accumulation points on rivers.

While water usage in the agriculture sector is at a low, Romania’s industry is still depleting the national water resources. The Romanian government is currently considering solutions to limit industrial water usage and increase the water-efficiency of industrial processes:

• Increasing the tariff for industrial water, in order to discourage the use of water in processes that do not necessitate drinking-quality water

• Implementing the specifications of article 4, paragraph 1 of Water Law 107/1996 regarding:

o Surface and ground water usage regulation, based on the specifics of this usage (the processes for which the water is used)

o Restricting ground water usage for industrial processes o Monitoring ground water capture volumes and intensifying inspections in order to determine the

actual use of water by economic agents (purpose, authorizations, subscriptions to water supply, etc.)

o Closing capture drills that are out of use

• Encouraging industrial agents to:

o set up their own water sources (wells, own installations for water transport from dams/rivers); o optimize water usage processed o implement automatic systems for monitoring of abstracted water flow o build separation systems for collecting/treatment o improve of pre-treatment plant for waste water from technologic processes o upgrade/rehabilitate of water treatment plants; o implement an automatic systems for monitoring of waste waters discharged into water resources o upgrade production technologies (for example in the oil industry: using oil-drill technology to

exploit ground water sources at a greater depth than currently accessible, Rompetrol is one company currently engaging in such an effort at its oil-drill site in Zegujani).

All current government strategies are generally applicable, with no specific provisions for each industry sector (with the exception of the oil sector). It is expected that these strategies will be further elaborated in order to provide detailed measures for the main water usage sectors of Romania’s industry: food & beverages, chemical, textile, thermal power, pulp and paper, building materials, iron & steel.

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2.5 River Basin Management

Romania has a hydrographic network totaling 78,905 km, divided into 11 river basins / hydrographic areas:

Table 2 RO hydrographic network

No. River basin / Hydrographic area

Area (km2) %

1 Somes Tisa 22,380 9.43

2 Crisuri 14,860 6.26

3 Mures 28,310 11.93

4 Banat 18,393 7.74

5 Jiu 16,713 7.05

6 Olt 24,050 10.14

7 Arges Vedea 21,479 9.04

8 Ialomita Buzau 23,874 10.05

9 Siret 28,116 11.85

10 Prut 20,267 8.53

11 Danube, Danube Delta, Dobrogea + costal waters

18, 949 + 1, 130 7.98

TOTAL Romania + coastal waters 237,291 + 1,130 100

Source: NAAR

Main actions taken by the Romanian government with regards of the improvement of water surface quality and implementation of the river basin management plan are:

• the development of the methodology for the elaboration of the river basin management schemes as well as the analysis of river basins characteristics and the assessment of the human pressures on surface and groundwater resources

• the identification, classification and mapping of the protected areas (elaboration of Protected Areas Register)

• the economic analysis of water utilization and assessment of actual level for cost recuperation for those services for 2 river basins Somes Tisa and Arges (pilot project financed by EU PHARE program implemented by an international consortium managed by Arcadis Euroconsult);

• 6 international projects were initiated for the implementation of the WFD ( contributions of The Netherlands, UNDP, GEF) together with WATFRAME project in Siret basin and other PHARE projects in Ialomita-Buzau basin including the modernization of informational system in the water sector

• elaboration of the “Handbook for modernization and development of integrated monitoring system of Romanian Waters” establishing monitoring programs, investigation sections and the need for endowment of regional basin laboratories. A PHARE program is also in progress for evaluation and need of endowment of NAAR laboratories for determination of priority/dangerous substances.

• elaboration of the Implementation Plan for EU Directive on Nitrates, the action plans for risk areas and the “Best Agriculture Practices Code”. In Calarasi county it was implemented a pilot project on pollution control for nitrates of agricultural sources by setting up pilot management platforms for manure and forestation of risk areas. Based on project success the pilot will be extended at national level.

• for implementation of EU directive on urban waste waters treatment, projects proposals for the modernization of water infrastructure and waste water treatment were prepared and submitted for financing in Bucharest, Arad, Cris basin, Bârlad, Husi, Negresti, and Ploiesti). Under POS Environment major projects proposal are under development for building and rehabilitation of municipal water sewage/treatment and supply of drinking water to be submitted for financing from European sources.

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2.5.1 National Management Plans including implementation stages

Management plans for Romania’s river basins are the main tool of implementing Framework Directive 2000/60/EC and of reaching water quality objectives by 2015, according to accession objectives. The development of the national integrated management plans depends on the cooperation and partnerships at all levels based on raising social awareness on the need for securing and sustained management of water resources.

On this basis, River Basin Committees (RBC) were set up in 2005 combining governmental and local authorities and representatives non-governmental organizations. RBCs must collaborate with NAAR for the implementation of national water management strategies and policies, having as main responsibilities:

• approving directive schemes and management plans

• approving accidental pollution prevention plans

• proposing revisions of norms and standards in water management

• establishing special norms for the evacuation of waste water

• approving the inclusion of waterways in certain quality categories

• recommending financing priorities for water works

• approving the list of protected areas and the necessary works for ecological rehabilitation

• informing the public of all changes in the status of Romanian waters

The Netherlands government provided an important support for the development of the national strategy and capacity building of various governmental institutions by bilateral projects such as for Siret and upper Bistrita basins (PSO/PSO+), Teleorman county (PvW) or Timis river basin (Matra).

2.5.2 Surface waters categories and risk bodies of surface water

Water resources from internal rivers are the equivalent of 20% of the Danube’s resources. The Danube flows across Romanian territory for 37.7% of its total length, and it collects and transports (to the Black Sea) the discharges of all countries along its course. This affects the waters of the Danube Delta and of the Black Sea coastal area. Within the Danube River Basin Management Plan, a Danube Hydrographic District was defined, which also includes Romania’s coastal waters (1 nautical mile from the shore line) and the basins of rivers tributary to the Black Sea (total area: approx. 5,198 km2).

Following field evaluations and the mutual decision of several specialized institutions, Romania’s surface waters were divided into the following categories:

• Permanent rivers – 55,535 km = 70% of all waterways

• Non-permanent rivers – 23,370 km = 30% of all waterways

• Natural lakes – 117 lakes with a surface larger than 0.5 km2, 52% of which are in the Danube Delta

• Barrier lakes – 255 lakes with a surface larger than 0.5 km2

• Transitory waters – 174 km (river waters – 46 km; sea waters – 128 km)

• Coastal waters – 116 km

The monitoring of the rivers was organized in 2007 mainly on the medium and small rivers (monitoring length 26506 km –out of the total length of 78905 km). These sectors were chosen due to the higher human impact on the environment in these areas. Measurements were taken also in the upper part of the rivers were the human impact is minimal. Elaboration of the synthesis for surface water quality was based on the primary data regarding the physical - chemical analysis of the water obtained in over 824 monitoring sectors while the biological analysis of the water quality in the 11 river basins was done by monitoring elements as: macro invertebrates, micro phyto-benthos, phyto-plankton, macrophage aquatics and fishes in a total of 778 sectors. Based on the 824 monitoring sectors the global quality of the surface water was: class I – 6.211 km; class a II-a - 11.783 km, class a III-a – 5.638 km, class IV - 1.921 km , class a V-a – 953 km. Based on biological quality monitored in the 778 sectors the global quality of the surface water was: class I - 6.652 km, class II - 12.887 km, class III - 5.262km, class IV - 1.168 km and class V - 405 km.

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The lakes water quality was established in the 11 rivers basins based on the trophic category and the level of pollution with nitrates from agriculture sources. A total of 100 lakes were monitored and at the end the collected data showed that out the 100 lakes the situation was as follow:

• as regard the nutrients (total mineral nitrogen and total phosphor )- 4 lakes were ultraoligotroph, 2 lakes were oligotroph-mesotroph, 17 lakes were mesotroph, 14 lakes mesoeutroph, 30 lakes eutroph, 11 lakes eutroph-hypertroph and 22 lakes were hypertroph.

• as regard the biomass, out of the 100 lakes 24 lakes were ultra oligotroph, 25 lakes oligotroph, 15 lakes mesotroph, 4 lakes meso-eutroph, 16 lakes eutroph, 1 lake eutroph-hyper troph and 15 lakes hyper troph.

Water quality in the Danube River was monitored in 2007 in 30 control sections place both on the Danube River and the Danube arms- Tulcea, Chilia, Sulina and Sf. Gheorghe. Out of the total 1075 km monitored, 280 were in the class I, 787 km in class II and 8 km in class III. As regard the pollution with priority dangerous substances the water quality in the monitored section was inadequate - Cu and Se were found in all sections while other as Cr, Pb and Cd were present but more rarely. From biological point of view, out of the 1075 km monitored 153 km are in a critical situation that needs improvement. The 153 km are in the section Chiciu- Cernavoda -72 km and in the section Giurgeni-junction with Siret-81 km.

2.5.3 Flood and drought prevention and monitoring systems (early warning systems)

Key causes of flooding in Romania include: heavy localized rainfall (c.100-200 l/m2), increased urban land use, ad hoc development in floodplains; reduced river bed capacity due to embankments and non-rational deforestation of large areas. In Romania there are at present 2050 localities expose to the risk of flooding. Out of these 1298 are protected in different degree with defense works while 752 have no artificial protection. Measures of diminishing the risk of flooding have been implemented regularly in Romania, given the fact that Romanian rivers are prone to flooding. The current national infrastructure for flood prevention include as of 2007: 9,920 km dykes, 6,300 km river basin control structures, 217 temporary barrier lakes with 893 mil m3 capacity of flooding intake and 1,232 permanent barrier lakes with 2,017 mil m3 capacity of flooding intake. Structural flood mitigation measures in Romania include: river regulation works; building of reservoirs, polders and local embankments; wet zones conservation; development of high flood mitigation schemes in high-risk areas; measures for torrent control, reforestation and protective forest belts; soil erosion schemes and removal of some houses from high risk zones. Non-structural mitigation measures include: ensuring river basin management schemes are updated; reviewing watercourse schemes; mapping high risk zones and measures to prevent development in these areas; promotion of home and assets insurance for flood damage; development of early flood warning systems; local community involvement in river conservation actions and education campaigns on dealing with flood crisis situations.

Despite all these measures, intense and repeating flooding are still an essential characteristic of Romanian waterways. Though most of these phenomena are caused by climate factors, the flooding of recent years has pointed out the contribution of human factors to their occurrence:

• Intensified use of land in danger areas

• Deficient design and construction of protection structures

• Negligence in the use of protection structures

The repeated floods that occurred during 2005-2008, revealed the weakness of protection techniques and the community response capacity at risk situations for facing the floods effects as well as recovery capacity post event.

The program for the implementation of the National Plan for Prevention, Protection and Mitigation of Flood Risk is in progress. MESD has implemented several other projects that focus on weather forecasting, hydrological warnings and data processing:

1. One of the first projects, finalized in 2007 was the Integrated Weather System (SIMIN). Weather stations were positioned in a geographical pattern that ensured the relevance of collected meteorological data. SIMIN

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benefits from meteorological radar infrastructure, air observatories, weather forecast centers, rain stations, data collection and processing centers, lightning detection centers and a meteorological products dissemination system. Via its internal and international communication system (satellite, mobile telephony, electronic mail, classic telephony), SIMIN provides information to over 100 strategic beneficiaries: the president’s office, the government, ministries, county halls, civil protection institutions, the army, public and national safety institutions.

2. The Destructive Water Abatement and Control (DESWAT) project will be finalized in 2009. Its purpose is to develop an integrated hydrologic information system at national level, in order to prevent and reduce flooding, damages to hydro-technical works and water pollution. The main project objectives are improving the capacity, precision and speed of forecasting and evaluating flooding damages. DESWAT will use the SIMIN facilities: the radar and communication systems. Automated monitoring stations are set up along the main rivers, equipped with water level measurement sensors, sensors for monitoring precipitations, air/water temperature and the main water quality parameters. The data collected through these stations are processed by means of different forecasting models (Vidra, Consul, Unda) and will result in medium- and long-term hydrological forecasts (the latter type of forecast will consider different evolution scenarios). Once DESWAT is finalized, a 4-level technical and functional unit will function within NAAR:

• Level I – national level: MESD, NAAR, NIHWM

o National database and decision support system for critical hydrological thresholds o Implementing a modern national flood forecasting system on rivers and interconnecting users

and national decision-makers o Rapid communication system with Level II

• Level II – basin level o Database for the hydrographic basin and the basin forecast system o Close connections to regional users o Rapid communications system with Level I and III

• Level III – hydrological stations + the Water Management System (WMS) o The local database and collection/processing/validation system for hydrological data o Close connections to local users o Rapid communication system with Level II and IV o Verifying the quality of data from Level IV and the proper operation of the Level IV sensor system

• Level IV – monitoring system = direct data acquisition

• Measuring, collecting and transmitting data, in real time, to superior levels

3. The WATMAN project (Informational System for Integrated Water Management) is one of the manifestations of National Strategy for Flood Risk Management. It aims to implement an emergency situations system for waters: preparation (sirens and communication), intervention (rapid intervention centers) and rehabilitation (of intervention instruments). An efficient WATMAN system implies a rehabilitation of the Romanian water management system from the perspective of the EU Framework Directive for the water sector and of the National Program for Protection against Disasters. The project’s main works will be those to modernize the water monitoring network and the monitoring-warning systems for 96 NAAR dams, to modernize the NAAR communication system and to build 41 rapid intervention centers. WATMAN aims to implement an integrate water management system, with specific applications at all the above-mentioned decision levels, as well as to integrate the monitoring, warning, intervention and communication systems. So far, the feasibility study has been performed and 2 pilot-projects were implemented (Arges-Vedea basin and Somes-Tisa basin). Also, flooding intervention equipment has been purchased. 4. The Hazard Risk Mitigation and Emergency Preparedness –flood and landslide risk reduction –is a project aimed to support the risk mitigation measures and developed with the support of World Bank and the Global Facility for Disaster Reduction and Recovery. The overall project is at a large scale in the Danube Basin and Black Sea. The objective of the project is to assist the government in reducing the environmental, social and economic vulnerability to natural disasters, to catastrophic mining accidental spills of pollutants. With respect to water issue the project aim to strengthen the institutional and technical capacity for disaster management and emergency response, to implement specific risk reduction investments for floods, landslides and earthquakes, to improve the safety of water-retention dams. The project has more components that will:

• strengthen and enhance the capacity of Romanian authorities to better prepare, respond and recover from natural or man-made disasters, through modernization of information technology and communications systems, public awareness and preparedness, technical feasibility work and institutional framework for launching of the Romanian Catastrophe Insurance Program;

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• reduce the seismic vulnerability of priority technical and social infrastructure, through the retrofitting of key structures, and institutional strengthening;

• reduce flood risk and vulnerability in critical areas in Romania, improve safety of large and small dams, to map and model the risk of landslides, to reduce losses, providing better land use planning tools;

• reduce the risk of water and soil contamination, and loss of human and aquatic life from catastrophic accidental spills of pollutants in the mining sector.

MESD also prepared the Prefect and Mayor Manuals for administration of emergency situations as informative guidelines and setting the responsibilities regarding intervention measures, population warnings, remediation measures, endowment with materials and equipment, etc.

As of 2005, Romania has been rebuilding the water infrastructure affected by extreme weather. Over 2005-2006, the Romanian Government financed the reconstruction of dams, dredging, consolidation of embankments, restoration of river beds, artificial accumulations, etc. A budget of 5.7mil EUR was allocated for such works, from the Environmental Fund. In 2007, NAAR implemented 240 investment projects for the upgrading of the flood infrastructure as follows:

• Continuing works on investments from previous years

o The Runcu barrier lake (Maramures county) o Raising the Sacele barrier lake (Brasov county) o Protection works on Techirghiol lake (Constanta county) o Consolidating the Jijia river in order to combat flooding (Botosani and Iasi counties) o Works to prevent natural disasters along the Barcau river (Bihor and Salaj counties) o Works to combat flooding along Raul Negru and Olt river (Harghita, Covasna and Brasov

counties) o Consolidating the Arges river to prevent flooding and to facilitate irrigation (Giurgiu, Calarasi and

Ilfov counties)

• Initiating procedures for the acquisition goods, services and works, based on objectives co-financed by the Council of Europe Development Bank (CEDB) through the Banat projects “Defense against flooding in the South West of Romania” ; continuing work on the other 2 CEDB projects

• Rebuilding hydro-technical flooding defense works and basin consolidation works. Funding for these investments is sourced from CEBD and the European Investment Bank (EIB)

Future planned actions include:

• The development of the Flood Risk Management Plan per river basin and a floodability map of Romania. The latter will be finalized by 2011 and will indicate the expansion of floodable areas and the variations in water depths when flush-flooded, taking into account different overflowing probabilities

• River basins, county, municipal and communal flooding defense plans (to be integrated into the Strategy as Operational Intervention Plans)

• The National Program for the Prevention, Protection and Mitigation of Flooding Effects

Drought management From total 14.7 million ha agricultural land (out of which 9.4 million ha arable land) 48% are affected by drought on long periods and consecutive years. At the same time 80% of the arable surface is affected by restrictions determined by natural (climate, relief, etc) or human (agriculture and industrial activities) factors. Romania has also about 6.37 million ha of forestry vegetation unevenly distributed. The drought is affecting mostly the forests from hill and mountain areas with a increased sensitivity of artificial regeneration plantations depending on manual watering.

Drought influence on water resources was extremely severe from 1990 to 2007 the real river debits being 56% of the average multiannual debit main influence being observed on the level of groundwater mainly in Moldova plateau, Campia Romana and Dobrogea. (Someş, Jiu, Olt, Cibin, Buzău, Prahova, Siret, Prut, Mureş rivers). At the same time the existing deficiencies in the water supply system and insufficient capacity of the distribution systems are increased during drought periods.

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The hydro-ameliorative systems with Danube as tapping source started during 1960-1970 and continued up until 1989 when Romania had a total irrigated surface of 2.2 million ha plus another 0.8 million works in progress. After 1989 the structural changes in agriculture sector as well as the low profitability in exploitation due to network losses and high energetic consumptions (even with subsidized costs) determined a drastic decrease of the irrigated areas in comparison with the existing potential. At present the National Agency for Land Management has under direct administration: irrigation infrastructure - 3.0 million ha, draining infrastructure - 2.95 million ha (out of which: gravitational - 1.5 million ha, pumping - 1.4 million ha, pumping with draining - 699 pieces), drainage channels - 246.539 ha, infrastructure against soil erosion 2.2 million ha and infrastructure for flood defense of agriculture land (dikes on Danube and interior rivers - 821.204 ha, control dams for flood outrush - 190.904 ha).

A detailed analysis of the consequences of agricultural and industrial practices as well as other aspects of rural and urban development was not done yet but the reciprocal determination between desertification and economic development was recently acknowledged through the concept of sustainable development. The national strategy on drought management was revised by MARD in early 2008, but implementation is still difficult, mainly due to the large number of institutions that need to cooperate (over 20), as well as the absence of a detailed action plan for each sector and of a clear budget resources to be allocated. Moreover, the National Agency for Land management (ANIF), the administrator of the national irrigation system under authority of MARD, was subject of many debates following a reorganisation in 2005, a bankruptcy status in 2006 and a failed privatisation attempt in 2007.

As a consequence of the 2007 drought, a set of procedures for the management of emergency situations determined by drought: was developed by Romanian government in 2008: Procedures I Are established by „Regulations regarding the management of the emergency situations generated by floods, dangerous meteorological phenomena, accidents at hydro technical constructions and accidental pollutions” approved by MESD + MIRA Minister Order 638/420/31.05.2005. The document provides in case of emergency situations the obligation to fill in daily Operative Reports to include: the area where the restrictions are applied, the hydro meteorological situations that determined the restrictions and the rationalization of the water according to the local situations. Procedures II Each river basin has developed “Plans for restrictions and water usage in deficit periods”, plans revised in 2006. These plans comprise mainly information about the decisional-informational system and the population and other socio-economical units warning system, water sources and the normal used debits and the minimum needed and the sector that should be controlled. Procedures III Consist of the methodological norms for elaboration of the governing rules for exploitation of dikes, artificial lakes and water inlets. The norms (approved by MESD Order 76/2006) contain mainly: technical data of the construction, the dispatcher graphic of the construction, technical instructions for manipulations of the dikes in the conditions of low water level, the hydro -meteorological, decisional and informational flow.

2.6 Coastal management and protection

2.6.1 Erosion protection

The length of the Romanian coastline is 244 km, divided into 2 main sectors:

• The northern sector (approx. 164 km) lies between Musura Bay and Cape Midia, and it includes the Danube Delta Biosphere Reservation and the Razim-Sinoe laguna complex

• The southern sector (approx. 80 km) lies between Cape Midia and Vama Veche

The coastal area includes coastal surface and ground waters, seashore, adjacent terrains (with their respective surface and ground waters), islands and salt lakes, wetlands in contact with the sea, the beach and the sea-front (embankment). Due to its economic significance and to its geographical position, to its role a main transport corridor on Europe’s eastern border, and to the large protected areas, the coastal area requires integrated protection and management measures in view of sustainable development.

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The National Committee for the Costal Area (NCCA) coordinates Working Groups that offer specialty consultancy services in the field of adequate strategy implementation in the coastal area. These Working Groups are responsible for:

• Demarcating the coastal area

• Elaborating technical and juridical documents for the coastal area

• Elaborating policies, strategies and action plans

• Implementing integrated control and monitoring of the coastal area

• Informing and communicating relevant information to the public and government institutions

The integrated management of the coastal area is one of the priorities of the government program, as studies performed over the years have shown a high degree of coastal erosion and pollution, due to environmental factors but mainly to human activities. This degradation makes rehabilitating and protecting the coastal area is a priority issue for Romania, the main factors of degradation being:

• The expansion of dykes in the Sulina branch of the Danube Delta into the sea � this caused the deviation of sediments from the Chilia branch and a their settlement in the sea area

• Expansion and modernization works in the Midia, Constanta and Mangalia harbor � these caused an out to sea deviation of seashore currents, which ensure the supply of sand to southern beaches

• A reduction on the mollusk population by 50%, causing a fall in the level of biogenic sand

• The rising tendency of the sea level, by an average of 1.5-2 mm/year, which causes a withdrawing of the shore line

Under these circumstances, MESD accepted the collaboration proposal of the Japanese Agency for International Cooperation (JICA), and initiated the “Study on the Protection and Rehabilitation of the Southern Sector of the Romanian Black Sea Shoreline”. This study’s main objectives are:

• Elaborating a protection plan for Romania’s southern coast (Midia-Vama Veche)

• Performing preliminary actions to promote preliminary projects

• Transferring knowledge and technology in the field of coastal protection and management to the Romanian side

The study is financed by the Japanese Government at the request of the Romanian Government, and JICA is responsible for implementing the technical cooperation program. Several stages of this project have been completed. In 2005, the on-site situation was evaluated and 2 priority areas (Eforie Nord and Mamaia Sud) were selected for rehabilitation and for performing anti-erosion works, including supplying sand. In 2006, an environmental report for the project was published and, in 2007, the project was subject to public debate, resulting in the selection of final protection options for the coastal area.

The Japanese team performed the feasibility studies for the two priority areas out of their own sources of financing, and the Romanian government must pay for the subsequent feasibility studies (remaining areas). The Japanese side of the project will continue to provide the necessary technical assistance.

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The implementation plan for protecting the coastal area against erosion is divided into 2 stages. So far, only the phases of stage 1 have been defined:

Table 3 RO Implementation Phases Protection Plan Costal Area Erosion

Phase Timeframe Included areas

I 2007-2010 Mamaia, Eforie Nord (partially)

II 2011-2015 Mamaia Center (partially), Tomis Nord, Eforie Center

III 2016-2020 Mamaia Center (partially), Tomis Center, Eforie Nord (partially), Eforie Sud (partially)

Total Stage 1 2007-2020 Mamaia to Eforie Sud (partially)

Source: Business Development Group (based on MESD information)

Protection works will include the rehabilitation of dykes, creating artificial reefs, supplying sand and demolishing existing works in the area.

MESD is also considering European funds in order to rehabilitate the Black Sea coastal area, such as those for combating coastal erosion. Priority Axis 5 out of Sector Operational Program for Environmental Infrastructure (SOP ENV) is reserved for “Flood protection and the reduction of coastal erosion”, with a total budget of 134 mil EUR. The first project proposal will be submitted to the European Commission in the second half of 2008. The sole beneficiary of these funds will be NAAR, and project will be implemented between 2009 and 2014.

2.6.2 Integrated management of coastal areas

In order to ensure an integrated management of the coastal area, NCCA collaborates with several research institutes, public administrations, EPAs, etc.

In order to protect and rehabilitate the coastal area, MESD has been promoting international projects that support solving priority issues regarding the Black Sea coast, the most important being:

• Implementing the Framework Directive for Water and the Integrated Management of the Coastal Area, in the Transition and Coastal Waters of Romania � financed by the Dutch Government – finalized

• Study on the Protection and Rehabilitation of the Southern Sector of the Romanian Black Sea Shoreline � financed by the Japanese Government through JICA – ongoing

Local budgets also financed several projects during 2005-2006

Complex Development for Stopping Flooding and Rehabilitating the Beach and Sea-line in Costinesti

• Stopping Erosion in the Jupiter-Venus Area

• Works to unclog the Tuzla pond

• Works to consolidate the seashore in the North Midia sector (stage 1)

Other MESD international projects focused on coastal erosion, besides the one in partnership with JICA are:

SeaDataNet (http://www.seadatanet.org) – Pan-European infrastructure for managing data regarding the sea and ocean environment. This 5 year project (2006-2011) involves 49 partners in 35 countries, and is coordinated by Ifremer (France) and Maris (Marine Information Services BV) (Holland). The purpose of the project is to build a standard data management system, for data collected by research ships and new automated observation systems.

Black Sea SCENE (http://www.blackseascene.net) – A projects that will be finalized in November 2008 (initiated in 2005) and was aimed at creating a Black Sea science network. Benefiting from EU financing, the project has 25 partners from countries neighboring the Black Sea. The purpose of the project is to create a network of environmental and socio-economic research institutes, universities and NGOs, and developing the essential data and information infrastructure that will improve the identification, access, exchange, quality and utilization of Black Sea data.

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The Convention for the Protection of the Black Sea Against Pollution was signed in Bucharest in 1992 by representatives of all Black Sea neighboring countries: Romania, Bulgaria, Georgia, Russian Federation, Turkey, and Ukraine. The Bucharest Convention provides the legal framework for cooperation and for taking action to protect the Black Sea against pollutions. The Convention has 3 main protocols:

• Protocol on protecting the sea environment against pollution from land sources

• Protocol on cooperating to combat pollution of the sea environment with oil and other damaging substances

• Protocol on protecting the sea environment against spill pollution

In order to implement the Convention, in 1996, the partner countries signed the Strategic Action Plan for Rehabilitating and Protecting the Black Sea. Based on this plan, Romania elaborated the National Strategic Action Plan for the Black Sea.

Romania has also managed to apply EU recommendations on integrated coastal management, by implementing the necessary legislation:

The most important national projects targeting integrated coastal management are:

Analyzing and reconsidering the land pollution sources in the Black Sea coastal area, according to EU demands (2006-2008) – This project will be finalized in 2008 and is aimed at identifying, monitoring and evaluating the impact of ground pollution sources on the sea environment, in the area between Vadu Sinoe and Vama Veche.

Evaluating the current status of transition coastal and sea waters, a priority component of the community environmental strategy (2006-2008) – This project aims a complex approach of the degradation of sea waters in order to supply the necessary data for diagnosing the Black Sea ecosystem. It is also a measure taken to give scientific ground to measures of protecting the coastal and transition sea waters and to align national investigation methods to EU standards.

MESD has also elaborated a short and medium term strategy based on an analysis of the use and exploitation of Black Sea beaches. The strategy was elaborated in collaboration with NAAR – the Direction of Dobrogea-Seashore Waters, which administers the beaches. The main objective was the one-sided exploitation of all beaches and the possibility of transferring all non-water-management works to that operator. In the short term, MESD envisions achieving European standard tourism on the Romanian seashore. In the long term, the purpose is ensuring better protection for beaches by regulating the type of acceptable beach constructions.

USTDA granted MMDD a not reimbursable loan for technical assistance for a project concerning the erosion reduction in the North part of Black Sea Coast. The total amount granted is 385772 USD. During 2007 - 2009 the north part of the seashore will be analyzed in order to identify the reason of erosion and the areas most exposed to erosion and the project will also propose possible solution to stop the erosion. The project is similar with JICA for the south part.

2.7 Ground water / soil pollution

Inventory of risk bodies of groundwater In order to fulfill its accession negotiation commitments, Romania sent the European Commission a National Report, according to article 5 of the Framework Directive, which identifies and demarcates bodies of ground water based on their geological and hydrological characteristics. The final estimates were 129 bodies of ground water, 19 of which were cross-border. These bodies of water were assigned to the River Basin Directorates. An initial risk analysis showed that 20 bodies of water presented qualitative risk. Further information evaluation led to the conclusion that the water table is in a critical qualitative and quantitative state.

An overall evaluation of information collected from all the river basins points out the critical situation of the ground water bodies in many areas of Romania. Even though human impact on the ground water bodies has decreased over the last few years (a decrease in industrial production and animal breeding has drastically reduced the quantity of pollutants spilled in natural receivers), and waste water purification methods are being implemented, the quality of ground water is still below acceptable standards, due to the slow rate of self-purification.

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In 2007 1939 drillings were monitored out of which 1687 are part of the national hydro-geological network including 28 water springs and 252 monitoring drillings are in the proximity of big industrial centers. Via MPH 129 private fountains with non drinkable water due to exceeding levels of ammonium, nitrites and bacteriological infestation were also monitored. Data collected showed that 32% were exceeding the organic substances level and 28% were exceeding the ammonium level (both on an increase trend compared with previous year), 12% of the drillings were exceeding nitrates level and 8% were exceeding the phosphates level.

Map 3 RO Vulnerable areas for nitrits pollution

Source: MESD

The major pollutants affecting the quality of ground water are:

• Oil products: o Prahova-Teleajen region: Petro-Brazi, Astra and Petrotel Ploiesti refineries o Baia-Mare region: fuel storage facilities, Petrom gas stations o Bega-Timis river basin: Solventul Marginea factory o Siret river basin: RAFO Onesti rafinery o Accross Romania: oil pipes

• Fertilisers: o Around producers: Azomures (Mures county), Doljchim (Dolj county), Oltchim (Olt county),

Agrofertil (Prahova county), Archim (Arad county) o In agricultural areas

• Industrial by-products: Around large industrial platforms

• Radioactive substances: thermal power plant ash from lignite combustion (Isalnita area, Erghevita area)

• Animal breeding products and household waste: around animal breeding complexes and large urban agglomerations

• Heavy metals: o From human activity: mining sites, ore processing plants, etc o From natural sources: areas with high iron and manganese concentrations (Siret, Olt, Jiu, Buzau,

Bega-Timis river basins)

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2.8 Major national and international companies active in the water sector

The market for technologies, equipment and consultancy services evolved in accordance with high demands for upgrade in various areas of the water sector as presented in previous chapters.

The Dutch presence on the market remains one of the most active by involvement of experts, institutions and companies playing major roles in the development of the sector from governmental capacity building to knowledge transfer on up-to-date knowledge transfer. According with the brochure edited in 2007by the Royal Netherland Embassy in Bucharest over 140 projects were carried out last year in Romanian water sector totalling over 20 million Euro support of the Dutch government.

As follows a brief selection of representative companies supplying Romanian market:

Romanian International

ACK (www.ack.ro) – designer and producer of installations for water meters control and supplier for water meters for cold and hot water and equipments for waste water treatment plants

Altenburg & Wymenga (www.altwym.nl) Sustainable Development, Biodiversity Conservation and Ecosystem Restoration, Consultancy services in the field of Ecology and related issues such as Integrated Water Resource Management, Protected Area Management, Nature Conservation and Capacity Building. In Romania: project to develop a modeling methodology for the establishment of an ecological network in the Carpathians (also follow-up project in the Ukrainian Carpathians).

Alp (www.alpsibiu.ro) – supplier of products for drinking water management, water transportation, waste water evacuation systems, complete sewage systems

Bamag (www.bamag-gmbh.de)- water, waste water, sludge treatment and Incineration, engineering company in the fields of water

Apasco (no website)- founded in 1992 is a large company in the hydrotechnic construction field

Ekowark – (http://www.ekowark.com.pl/) – won the public tendering for the Arad sewage network, in a consortium together with JV Confort&Amarad

Apa Nova Bucuresti & Apa Nova Ploiesti (www.apabucur.ro; www.apanova-ploiesti.ro – the concessionary of the public water supply and sewage network for Bucharest and Ploiesti

ERM (www.erm.com) - environmental consultancy

Aqua Biotec (www.aqua-biotec.ro) – is specialized in the treatment and evacuation of waste water and rain water in the areas where there is no sewage system

Grontmij / Carl Bro (http://www.grontmij-carlbro.com) provides consultancy services within all significant areas of water resources, supply technology, wastewater and the aquatic environment

Aquaproiect (www.aquaproiect.ro) - design institute in the field of water management and environment engineering, including design of: water constructional works (dams and storage reservoirs, extensions and adductions including hidromechanical equipment), etc

Haskoning Romania – (www.royalhaskoning.com) - water treatment, environmental policy & risk management, river & coastal management, spatial development & water management

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Argif Proiect (www.argif.proiect.go.ro) – accredited for civil and industrial constructions, hydro-technical constructions, land development and environmental engineering. Develops on site studies (hydro, geo, hydrogeo and topo) and environmental impact evaluations (impact studies and environmental balances) for all designed works.

Hyder Consultin (www.hyderconsulting.com) - consultancy services in the water and environmental area

Ascomi (www.ascomi.ro) – supplier of water treatment equipments and installations

Iberinsa Romania (www.iberinsa.es) -engineering company, construction and water management

Asio (www.asio.ro) - development, engineering, production and installation for the purification of waste water and water treatment

International Water Enterprise (www.iwe.ro) – works for connecting to the urban sewage system / water supply, wastewater treatment stations, purification stations

Atlas GIP (www.atlasgip.ro) – drilling, geophysical research, thru-tubing perforation or directly thru-casing in static or flowing wells

Lockheed Martin (www.lockheedmartin.com) - global security systems; implemented SIMIN and DESWAT programs

Auditeco (www.auditeco.ro ) – environmental consultancy: water supply, technical assistance for water treatment

Louis Berger (www.louisberger.com) – waste water treatment, engineering

BDO (www.bdo.ro) - consultancy services for utilities' operators and public authorities, policy makers or regulatory bodies

Mivan Kier Joint Venture Limited (www.mivankier.ro) - represents an association of two construction companies from Great Britain - "Mivan Limited" and "Kier International". On the Romanian market the group is developing projects on the design and execution of water supply system as well as social housing. The infrastructure development schemes will result in supplying drinking water to 30 localities in the rural area of 6 counties.

C&V Water (www.cv-water.ro) – supplier of drinking water treatment equipments, waste water treatment equipments, systems for water supply

Mott MacDonald Romania (www.mottmac.ro)- consultancy company in the area of water and wastewater public services, environment, education, energy, management and transport

Consir (no website)- founded in 1991, one of the large companies in hydrotechnical construction field

Peri Romania (www.peri.ro) - water retaining structures, scaffold bridges and walkways, shoring for bridge work, etc

Constructii Hidrothenice (www.conhidro.ro ) - founded 1991, main activity is hydrotechnic constructions (dikes, water supply, reinforrcment of rivers' banks, etc.)

Solel Boneh International – Tahal J.V (www.sbisr.co.il ; www.tahal.co.il ) - the two companies are partners in a Joint Venture that won a tender for the design and construction of Water Supply Schemes in villages in 22 counties. Financing for the Contract was also arranged by the SBI-TAHAL Joint Venture

Danex Group (www.danex.ro) – recognized by ARA as "The best general supplier of turn-key solutions for water infrastructures” in 2007 is involved in projects like: water supply network, drinking water treatment, sewerage network, waste water treatment, pumping stations for drainage and irrigation

Spaans Babcock (www.spaansbabcock.com) is active in designing and building water and waste water treatment equipment; specialized in all applications of water and waste water treatment with screw pumps, aerators and fine screens; by the end of 2008 will deliver a turnkey project in WWTP in Targu Mures

Derco Metal Construct (www.puturi-foraje.ro ) – deep and shallow well drilling

Tahal Romania (www.tahal.com)- part of Tahal Group- international consultancy and engineering concern, MESD partner for a large no of projects in the water infrastructure

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DFR Systems (www.dfr.ro ) – supplier of water purification and treatment stations

Tebodin B.V. (www.tebodin.com) – engineering and consultancy company also active in the field of water supply and sewage system.

Dy Angello Constructii (www.dyangelloconstructii.ro ) – is a designer and constructor of sewage and urban water supply networks

Trapec (www.trapec.ro ) - part of Tractebel Engineering Suez- consultancy company - water and land use, environment, mobility, regional economy

Ecomaster (www.eco-master.ro ) is part of the Rompetrol Group and deals with activities like waste collection and waste water purification

Veolia Water (www.veoliawater.com) – Veolia Water Solutions and Technologies is the world leader in engineering, design, project management and execution of construction projects for turnkey facilities and water treatment plants.

Edas Exim (www.edas.ro) – distributor of TKA Watersystempurification (Germany) systems for water purification and water treatment

Wavin (www.wavin.nl ; www.wavin.ro ) – leading supplier of plastic pipe systems, ground solutions for hot & cold tap water, surface heating and cooling, soil and waste, rainwater management

Elkana (www.foraje-forari.ro ) – deep and shallow well drilling, horizontal drilling

Witteveen+Bos (http://www.witteveenbos.com) – consultancy and engineering services for projects in the following areas: water, infrastructure, environment and economics

Euro Partener Instal (www.europartenerinstal.ro) – design and construction of water supply networks and sewage systems

Zabrak (www.zabrak.hu) – drilling works, ground water pollution analysis

Foretis (www.foretis.ro) – drilling works for deep and shallow wells

Formin (www.formin.ro ) – drilling works for deep and shallow wells, mainly in the West side of the country

Geo Aqua Consult (www.geoaqua.ro) – consultancy: feasibility studies for wells, well design

Geoscan (www.geo-scan.eu ) – geotechnical studies and investigations, consultancy services

Gepaco (www.gepaco.ro) – drilling works for deep and shallow wells (up to 350m)

Grup Romet (www.romet.ro) - the biggest Romanian suppliers for water industry (water treatment equipment, waste water equipment, hydrants, pumps, valves, dismantling joints, couplings, pipes) for agriculture (complete irrigation solutions: sprinkler irrigation equipment, hose reel travelers, center pivots and lateral move machines, drip irrigation equipment)

H2O International (www.h2ofilter.ro ) – water treatment and filtrations systems

Hidroconstructia (www.hidroconstructia.com ) - founded in 1950 - main activity hydrotechnic construction both above – and underground

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Hidrotica (www.hidrotica.ro ) – supplier of pumps and hydrophores

Hydrotech (www.hydrotec.ro) – drainage and water supply technology

Ingo Prod (www.ingo-prod.ro ) – representing ECP International LLC in Europe, which is the world leader in electrolytic treatment of industrial, agricultural, freshwater aquaculture, and municipal wastewaters

Iridex (www.iridexcons.ro)- construction company including hydrotehnic construction

Kemorad Grup (www.kemoradgrup.ro ) – water treatment systems supplier

Purator (www.purator.ro) – full range supplier of products and system solutions for water supply, sewage treatment and waste water

Rehau (www.rehau.ro) – supplier of water transportation systems

Repcon (www.repcon.ro)- offices in Oradea, Sibiu, Suceava- hydrotechnic construction, rivers regulations

Romstal (www.romstal.ro) – one of the biggest suppliers of water transportation systems

Ronoaqua(http://www.ronourbangrup.ro/consultanta-in-constructii.htm ) – consultancy for projects concerning the construction of sewage system, water supply network, project development

Sibarex (www.sibarex.ro) - 20 years of experience in the construction field, main certified activity hydro-technical constructions such as: river control, river side protection, irrigation channels, water supplying etc

Socot (no website)- founded in 1979-one of the largest companies in the hydrotechnic construction field

Ugo Trading (www.ugotrading.ro) – supplier of equipments for water filtration and treatment

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3 Overview of funding available for the water sector

The total required environmental investments between 2007 and 2013 are estimated at about 18 billion EUR, out of which 6.4 billion EUR will be sourced from EU funds. The total estimated cost for complying with environmental EU Directives is about 29.3 billion EUR up to 2018, out of which:

• 5.4 billion EUR – state budget and local budget (18%)

• 9.9 billion EUR – EU funds (34%)

• 7.8 billion EUR – private sector (27%)

• 6.2 billion EUR - other sources (Environmental Fund, international projects (other than those financed with EU support, foreign loans, etc.) (21%)

However, the highest investment pressure is foreseen for the next 7 years, based on the fact that many of the transition periods for various EU directives are agreed up to 2013 and minimum investments are needed as a first phase of long term investment plans in the water and waste sectors as to ensure sustainable development. In the water sector the necessary investments are estimated at about 12 billion EUR in the 2007-2013 period (for the whole sector), with about 5.4 billion foreseen to be allocated from the EU funds.

The division of funds based on addressing key water issues is:

• Waste water treatment – about 9.5 billion EUR needed for wastewater collection and treatment, out of which 4.8 billion EUR estimated in the period 2007-2013.

o 71% of waste water is untreated or insufficiently treated, and flows directly into natural receivers

o only 52% of Romania’s population is connected both to water and sewage services

o all of Romania’s territory has been declared a “sensitive area”; advanced treatment (more expensive) is required for agglomerations larger than 10,000 inhabitants.

• Drinking water – about 5.6 billion EUR needed for drinking water, out of which 3.8 billion EUR estimated in the period 2007-2013.

o only 65% of the population of Romania benefits from drinking water supply and indoor plumbing

• Investments are also required for anti-flooding measures – about 237 mil EUR foreseen EU support.

The major projects are currently prepared with ISPA support and external loans. They will be integrated water/wastewater projects (groups of projects), each covering several agglomerations in a county/river basin area, aiming to optimize the investment and operational costs and to significantly contribute to compliance with EU directives (in line with commitments under Chapter 22- Environment). All major projects are linked to a condition of reorganization of water services in the project area, aiming to ensure a good quality of services, at affordable tariffs, and an efficient operation of facilities to be built within the SOP framework. ISPA and PHARE technical assistance is currently available in 35 of the 42 counties of Romania, with the view to increase the performance of the regional water companies that will implement EU co-financed measures.

The investments in water and wastewater infrastructure are based on the Regional Master Plans. These Master Plans are planning documents for water and wastewater infrastructure, developed at regional / county level, which identify the geographic area (usually, at county level) where the management of water resources and wastewater would be better performed within a regional project (through the regionalization of water services, in order to improve their quality and cost-efficiency). This area, which will be covered by a regional project, includes all agglomerations above 10,000 inhabitants (mainly urban localities), but may also include some rural agglomerations between 2,000 and 10,000 inhabitants, where these investments are well justified from the environmental, technical and economic point of view.

The large-scale regional integrated projects as they were identified in the Regional Master Plans are financed through SOP ENV, under Priority Axis 1, “Extension and modernization of water and wastewater systems”. The needs of investment in water and wastewater infrastructure in the localities which are not included in the regional project (usually, rural localities) are also identified within the Regional Master Plan and will be addressed through the National Rural Development Program (NRDP), from the European Agricultural Fund for Rural Development (EAFRD), or through other financing sources. In order to ensure that the two programs are complementary, an agreement has been reached by the two Managing Authorities, establishing the

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coordination system of projects. Investments in the water sector are based on agglomerations as defined under EC Directive No 91/271 on urban wastewater treatment, and the urban and rural localities are defined according to the Romanian Law No 351/2001 on spatial planning.

An overview of available national and European funding available for the water sector is provided in Annex 3 and detailed as follows:

3.1 National funds

National investments in the water sector are planned from the following sources:

• National Rural Development Program – co-financed by the EU in the period 2007–2013 and coordinated by the Ministry of Agriculture and Rural Development (MARD), will include investments in the water infrastructure in rural areas;

• Governmental Programs for the development of infrastructure in urban and rural areas – with provisions for investments in water and wastewater infrastructure;

• The Environmental Fund – provides co-financing of limited investments in the water sector;

The rural areas will continue to receive Governmental support from local budgets and a considerable contribution is expected under the framework of NRDP 2007–2013, financed from EAFRD.

In order to ensure co-financing from the state budget for EU funded projects, the multi-annual budgetary programming is in place, and budgetary flexibility has been included in the State Budget Law for 2007. As for the contribution of local budgets to the projects co-financed by EU Funds, many municipalities are in a disproportion to the outstanding investment needs. Accordingly, the national authority intends to limit the co-financing rate of the local budgets to a minimum level (between 2 and 5% of the eligible costs of a project) that still can assure some incentives for sound implementation. The ineligible costs will be covered by the beneficiaries.

National Rural Development Program (NRDP)

Through the National Rural Development Program, Romanian authorities aim to reach several objectives:

• Increasing the competitiveness of the agro-food and forestry sectors

• Improving the environment and the countryside

• Improving the quality of life in rural areas,

• Diversifying the rural economy

• Managing local development initiatives.

These objectives are covered through the 3 Axes of the Program, and through the implementation of the Measures foreseen for each axis. Within NRDP, water projects are covered under Axis 3 – “The quality of life in rural areas and the diversification of the rural economy”, Measure 2 – “Measure to improve the quality of life in rural areas”. The overall objective of this measure is the improvement of living conditions for the rural population, ensuring access to basic services and preserving the local cultural and natural heritage of the rural area in order to achieve a sustainable development. The specific objective aims to increase the number of inhabitants from rural area which benefit from improved services.

Sustainable economic and social development of the rural areas is critically dependent on improving the existing rural infrastructure and basic services. Currently, access to the public water supply network among the rural population is limited to 1/3, while access to the sewerage system is even more problematic (only 10% of the inhabitants benefit from a public sewage system). All these issues are urgent and will be approached through the specific activities included in the 3 components of Measure 2:

• Improving and creating the physical basic infrastructure (especially the road, water supply and waste water infrastructure)

• Improving and creating the basic public services

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Improving and creating the physical basic infrastructure implies:

• Construction of new roads, extension and improvement of the local roads network (commune roads, vicinity roads, and streets within communes), which belong to the public propriety of the administrative territorial unit (the commune) in which they are located

• Set-up, extension and modernization of the water infrastructure (collection, treatment stations, water supply) for the rural settlements with less than 10,000 inhabitants

• Set-up, expansion and improvement of the waste water network (sewage, waste water cleaning stations) for rural settlements of less than 10,000 inhabitants

• Set-up and extension of the low tension electrical energy distribution network and public lighting network with high energetic efficiency

• Set-up and extension of the public gas distribution network towards other rural towns and villages or towards other rural areas which are not linked to the network

• Investments in transfer stations for waste and purchase of related equipment for waste management

Beneficiaries of NRDP are:

• Communes, through their legal representatives

• Local authorities (communes) or intercommunity development associations, through regional operators, for investments in water/wastewater infrastructure

• Intercommunity development associations, composed of two or several communes

• NGOs, cultural establishments and religious institutions

• Natural persons/legal entities that own or manage cultural/ natural patrimony objects of local interest

The public support (community and national) granted within this measure shall be:

a) Up to 100% of the total eligible expenditure, for the non-profit exclusively public projects, but the total eligible cost of the project will not exceed:

• 1 million EUR/individual project for an investment project in basic infrastructure, if the beneficiary is a local council

• 3 million EUR/project for an individual investment project on basic infrastructure, whose beneficiary is an intercommunity development association

• 2.5 million EUR/project for an integrated project, if the beneficiary is a local council

• 6 million EUR/project for an integrated project if beneficiary is an intercommunity development association

• 500,000 EUR/individual project, for other types of actions provided under this measure, other than the ones mentioned above.

b) Up to 70% of total eligible expenditure for the profit-generating projects. The support volume can not exceed 200,000 EUR/beneficiary over a period of three fiscal years.

The selection criteria for water projects are:

• Communes that have not received any previous Community support for a similar investment

• Rural areas in poor regions

• Projects that fit into a local or county development strategy

• Integrated investment projects

• Investment projects on water/wastewater infrastructure in rural localities with 2,000 – 10,000 inhabitants, identified under the Regional Master Plans, but that are not financed under SOP ENV

• Infrastructure projects for water supply infrastructure in areas where water is insufficient or that are often affected by drought

• Investments projects in water/used water infrastructure for areas where water presents a high level of pollution, or in the areas where the water table presents a high concentration of nitrates affecting the health of the population.

Under the NRDP (EAFRD), projects that will be financed will be the ones relating to water/waste water infrastructure in rural localities, with under 10,000 inhabitants, save for the ones included in the Regional Projects that will be funded under SOP ENV, and the ones on water/waste water infrastructure in spa resorts in the rural area, which will be supported through ROP.

The financial allocation of Measure 2 for the programming period 2007-2013 is 1,579,217,870 EUR, with 1,546,087,425 EUR contributed from national resources. In this period, 200 communes will benefit from water/waste water projects under NDRP, and 6,317 km of water supply pipelines and 5,053 km of sewage pipelines will be built.

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The Managing Authority (MA), represented by MARD, through its General Directorate for Rural Development (GDRD) is responsible with the implementation and management of NRDP. In order to facilitate direct contact with potential beneficiaries, GDRD has set up within the Directorates for Agriculture and Rural Development (county offices of MARD) a rural development department, which will carry out, locally, the tasks corresponding to the MA implementation tasks. The accredited Paying Agency, represented by the Paying Agency for Rural Development and Fishery (PARDF) is responsible with making payments.

Measure 2 benefits from 618,434,970 EUR in 2008. These funds are granted during 7 sessions of project proposals, 6 monthly sessions starting with March and a 7

th at the end of 2008, used for allocating any

remaining funds.

The project proposal must contain the request for finance and the technical and administrative annexes (provided in the Applicant’s Guide), and must be elaborated in Romanian. A printed copy and a digital copy must then be submitted to the corresponding County Payment Office for Rural Development and Fishing. The priority of projects are water infrastructure, road infrastructure, electrical supply, others.

The maximum project implementation deadline is 3 years for building/set-up projects, and 2 years for simple acquisition projects. A 2% penalty will be applied if this deadline is not met.

Environmental Fund The Environmental Fund (EF) operates according to the European principles “Polluter pays” and “Producer’s responsibility”, in order to implement the environmental protection legislation, harmonized with acquis communautaire provisions. EF is regulated by Government Emergency Ordinance 196/2005, modified and completed by Law 105/2006 and Law 292/2007. Managing the EF falls under the responsibility of the Environmental Fund Administration (AFM), a public institution coordinated by MESD, and financed exclusively from its own sources of funding.

EF revenues are obtained from public income and represent taxes and contributions according to the juridical regime of taxes, contributions and other payments to the general budget, according to GO 92/2003. AFM is responsible for establishing, monitoring and collecting the EF taxes and contributions, including, if necessary, through legal procedures. In 2007, 135,990 environmental tax payers were registered with AFM, contributing 52,060,923 EUR to the AFM budget.

Beneficiaries of EF financing are: economic agents, local public authorities, NGOs, education institutions

EF funding upholds state aid legislation, and must be authorized by the European Commission. EF nonrefundable financing can not be granted if, cumulated with other forms of state aid or other European/national funds, it surpasses the maximum amount prescribed by European Commission Regulation. For 2008, 1.4 billion EUR are available through EF for the protection of water sources and for building/rehabilitating treatment and purification stations in local communities. Another 112 mil EUR is reserved for preventing or diminishing the effects of dangerous weather phenomenon on water management works, and 4.1 billion EUR for reducing the impact on the atmosphere, water and soil.

For private economic agents, EF offers 50% nonrefundable financing (40% for the Bucharest-Ilfov Region), public authorities are covered in a proportion of 60% and NGOs can receive 90% of necessary funds. Refundable financing is available only for economic agents, with up to 75% of financial needs covered. The maximum finalization period for any project funded through EF must be 24 months.

A selection of water projects finalized financed from EF nonrefundable resources is available below:

Table 4 RO Selection Water Projects financed form Environmental Fund

No. No./Date of contract Beneficiary Location Actions Duration (months) Value (EUR)

1. 1/M/20.01.2006 S.C. Lacto

Salomonescu SRL Saveni

(Botosani county)

Purification station for waste water resulting from dairy processing

14 121,759

2. 2/N/01.02.2006 Turceni Local

Council Turceni

(Gorj county) Expanding and modernizing the sewerage network

12 163,058

3. 3/N/I/29.12.2006 S.C. Industralizarea Carnii KOSAROM

S.A. Pascani

Pascani (Suceava county)

Rehabilitating the pre-purification station + network

8 104,360

4. 137/N/30.07.2007 S.C. "AVICOLA"

S.A.Buzau Buzau

Waste water station for a poultry slaughter house

6 136,693

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Source: Environmental Fund Administration (AFM)

Government programs for the development of rural infrastructure The government programs implemented by MDPWH are in line with Romania’s development priorities and the government’s concern with reaching European living standards. These programs mainly target:

• supplying villages with water, through a centralized system

• building sewerage and purification systems

• treating waste water

• building/modernizing waste management structures

• improving rural roads through stoning, rehabilitating, asphalting

• building, expanding or modernizing bridges

• developing sports infrastructure

The main programs currently implemented by MDPWH 1. Supplying villages with water, according to GD 577/1997”, commenced in 1997, is meant to equip communes and villages with the necessary water infrastructure in order to meet European development demands. The main categories of communities targeted for the program are:

• Villages connected to urban areas

• Semi-urban areas

• Communes with economic and touristic potential

• Poor communities

Funds for this program are allocated fro the state budget and are managed by MDPWH. In 2007, alternative financing solutions were used to complete these funds, such as allowances from the local budget (480,000 EUR, across 10 counties) and external refundable credits (30 mil EUR, according to GD 1853/2006). Between 2007 and 2009, a further 90 mil EUR will be contracted in external refundable credit.

The subprogram aims to introduce water systems worth 935 mil EUR, in approx. 9,000 villages. Throughout 2007, 470 villages were included in the program and, by July 2007, centralized water supply systems had been introduced in 345 villages, with 110 already operational. Local councils are the contract beneficiaries for these works, and the systems are under their administration. The concrete objective of the subprogram is supplying 2.5 mil inhabitants, in approx 30% of Romania’s villages, with drinking water, in order to improve living standards and revitalize unprivileged areas. The work portfolio is elaborated annually and is completed/modified, if necessary, according to local council nominations.

Tenders for works under this program are organized according with legal provisions for public tendering: calls for projects are published in the electronic system for public acquisitions (SEAP), tenders are organized by local councils as contracting parties and are open to any company meeting the requested criteria.

5. 104/N/16.05.2007 S.C. SUBEX S.A.

Bacau Bacau

Modernizing the pre-purification station

9 88,254

6. 9/N/03.03.2006 Saru Dornei Local

Council Saru Dornei

(Suceava county) Modernizing the Neagra Sarului purification station

19 73,371

7. 69/N/10.07.2006 Targu Neamt Local

Council Tg. Neamt

(Neamt county)

Renewing the technology in the Targu Neamt purification station

18 834,437

8. 18/N/17.03.2006 R.A.J.A.C. Iasi Renewing the technology and modernizing the Targu Frumos purification station

20 249,485

9. 277/N/28.11.2007 S.C."VIM

SPECTRUM" S.R.L.

Corunca (Mures county)

Installing a waste water purification station

8 7,219

10. 23/N/10.04.2006 SC Agro Nutrisco Mihailesti

(Giurgiu county) Waste water purification station

14 184,322

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2. Government program of supplying villages with water, approved through GD 687/1997 began in 2000 and will be completed in 2009, and is structured in 3 financing stages, from external credit:

• Stage I – 186 mil EUR financing, obtained in 2000, for water supply systems for villages (project ongoing)

• Stage II – 60 mil EUR financing, obtained in 2004, for water supply systems for villages (project ongoing)

• Stage III – 53 mil EUR financing; 6.6 mil EUR obtained in 2007; 46.4 mil EUR reserved for 2007-2009

The program is currently being implemented by Mivan Kier Joint Venture Limited and Solel Boneh International – Tahal J.V as winner contractors of the 1997auction. By July 2007, 407 water systems had been introduced in 697 villages, and a further 290 villages are included in the program. County and local councils are the beneficiaries and administrators of the water systems. The concrete objective of the project is providing 1.7 mil inhabitants, in 894 villages with centralized water supply systems.

The external credit is completed yearly, from the state budget, with the amount of 2.8 mil EUR. The total value of the program is 340 mil EUR.

3. Integrated system for the rehabilitation of water supply and sewerage systems, of drinking water treatment stations, of waste water purification stations in communities with under 50,000 inhabitants is implemented by MDPWH and the National Investment Company (CNI). The project approaches significant areas in Romania, and it targets localities with fewer than 50,000 inhabitants. The counties where the project is currently implemented are: Bihor, Bistrita Nasaud, Calarasi, Constanta, Dambovita, Gorj, Harghita, Mures, Tulcea and Vaslui).

The project objectives are:

• Combating cross-border pollution by developing environmental infrastructure (waste water purification stations and sewerage systems) in the Crisuri, Somes-Tisa, Mures, Olt, Prut, Siret, Jiu, Arges-Vedea, Buzau and Ialomita river basins., as well as the Danube and Dobrogea river basins

• Improving drinking water supply to communities

• Ensuring constant quality drinking water supply

• Diminishing network water loss, energy use and use of chemical water purifying agents

• Reducing ground water and surface water pollution

The project will be implemented and finalized in 2 stages, the first stage being scheduled for implementation between 2007 and 2011. The 59 communities in the first phase of the project will benefit from financing for the following activities:

• Rehabilitating, expanding or creating new drinking water distribution networks

• Rehabilitating drinking water treatment stations or drinking water sources

• Rehabilitating, expanding or creating new sewerage networks

• Rehabilitating waste water purification stations

The total value of the project is 510 mil EUR, 208 mil EUR being reserved for the first stage. In the first stage, 182 mil EUR are allocated for rehabilitation works and equipment, while the remaining amount is reserved for technical assistance, feasibility studies, technical projects, environmental impact studies, auction documentation, evaluation and supervision of works. Financing was obtained from the following sources: 77% from CEDB, 19.2% from local budgets, 3.8% from the state budget.

3.2 Pre-accession European Funds

ISPA (Pre-Accession Structural Instrument) is the main EU program, started in 2000, that focuses on developing transport infrastructure and environmental protection in EU candidate countries. ISPA support aims to improve the above-mentioned sectors – transport and environment – and to ensure that they reach EU standards. Also, by using ISPA facilities, candidate countries become familiar with EU procedures regarding the efficient and transparent management of Structural Funds and the Cohesion Fund, available post-accession. Starting with 2007, ISPA financial assistance has been replaced by the Cohesion Funds, substantially increasing the available funding. Even though no funding applications for ISPA are currently received, most ISPA projects (including those for the water sector) are still ongoing.

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ISPA environment finances investments which support Romania’s implementation of EU environmental Directives regarding water, waste and air. For the environmental sector, ISPA covers activities that target the following issues:

• Drinking water supply

• Waste water treatment

• Managing solid and dangerous waste

• Air pollution

Eligible projects must enforce environmental principles and policies, and contribute to the gradual accomplishment of Romania’s economic and social cohesion with the EU. ISPA projects must actively contribute to environmental protection, to include measures of combating source pollution and to facilitate the implementation of the “polluter pays” principle. Projects that benefit from ISPA funding can imply:

• Water supply and sewerage works

• Waste water purification stations

• Waste management systems

• Air quality improvement works in urban areas

Priority was given to projects that targeted communities with over 50,000 inhabitants and that could ensure at least 25% of co-financing (ISPA covers a maximum of 75% of necessary funding). The main categories of beneficiaries are local and central authorities (ministries, county councils, city halls, etc.), autonomous directorates and national companies.

A list of finalized and ongoing ISPA projects are provided in the Annex 2.

On 29.09.2008, the first ISPA project was officially finalized and approved by MESD. The 37.3 mil EUR project in Satu Mare targets the water sector (drinking and waste water), and is financed from ISPA pre-accession funds (26.5 mil EUR) and an EIB loan (10.8 mil EUR) contracted by the Satu Mare municipality. Improving Satu Mare's drinking water system implied: installing 6 km of new pipes, replacing existing pipes and rehabilitating pumps and electrical installations, rehabilitating 15 wells, rehabilitating the drinking water treatment station (in order to reduce the concentration of manganese and iron in the drinking water). Several improvements were made in the waste water sector: rehabilitating the purification station, installing an ultraviolet purification installation, before the waste water reaches the Somes River, installing an energy co-generation station, rehabilitating 13 km of sewerages, rehabilitating 7 pumping stations.

3.3 Post-accession European Funds

All EU funding programs cover Technical Assistance. EU funds mainly benefit public authorities, including NAAR and other water-related agencies. Axis 1 from SOP ENV is reserved for Regional Operators. Axis 5 from SOP ENV is mainly directed at NAAR. Other funding programs generally target public authorities, such as county and local councils. All in all, EU funds are mainly reserved for public authorities.

EU Programs managed by MESD- Sectorial Operational Programme Environment

The Sectorial Operational Program Environment (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. SOP ENV is fully based on the goals and priorities of the EU’s environment and infrastructure policies, and reflects Romania’s international obligations as well as its specific national interests. The aim is to reduce the environment infrastructure gap that exists between the European Union and Romania both in terms of quantity and quality. This should result in more effective and efficient services, while taking fully into account sustainable development and the “polluter pays” principle.

The specific objectives of SOP ENV are:

• Improving the quality and access to water and wastewater infrastructure, by providing water supply and wastewater services in most urban areas by 2015, and by setting efficient regional water and wastewater management structures

• Developing sustainable waste management systems, by improving waste management and reducing the number of historically contaminated sites in at least 30 counties by 2015

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• Reducing the negative environmental impact of climate change, caused by urban heating plants in the most polluted localities by 2015

• Protecting and improving biodiversity and natural heritage by supporting the management of protected areas, including NATURA 2000 implementation

• Reducing the incidence of natural disasters which affect the population, by implementing preventive measures in the most vulnerable areas by 2015

In order to achieve these objectives, the following priority axes have been set:

• Priority Axis 1 – “Extension and modernization of water and wastewater systems”;

• Priority Axis 2 – “Development of integrated waste management systems and rehabilitation of historically contaminated sites”;

• Priority Axis 3 – “Reduction of pollution and mitigation of climate change by restructuring and renovating urban heating systems towards energy efficiency targets in the identified local environmental hotspots”;

• Priority Axis 4 – “Implementation of adequate management systems for nature protection”;

• Priority Axis 5 – “Implementation of adequate infrastructure of natural risk prevention in the most vulnerable areas”;

• Priority Axis 6 – “Technical Assistance”.

The program covers the period 2007-2013, but its objectives also look forward to Romania’s development needs beyond 2013, by laying the foundations for sustainable economic development.

SOP’s total budget for the 2007-2013 programming period amounts to approx. 5.6 billion EUR. Out of this, about 4.5 billion EUR is represented EU support, which represents about 23.5% of the financial envelope of the NSRF, and about 1.1 billion EUR comes from national contribution. The Community sources that will support SOP ENV implementation are the Cohesion Fund (CF) and the European Regional Development Fund (ERDF).

The implementation of the program is the responsibility of the Managing Authority (MA) for SOP ENV, which is the General Directorate for the Management of Structural Instruments in MESD. In order to support the MA in delivering the program more efficiently, 8 Intermediate Bodies (IB) for SOP ENV are set up as distinctive bodies at the level of each Development Region of Romania, within the structure of MESD (according to GD 497/2004 and GD 368/2007).

The MA for SOP ENV will act as an overall policy planner, financial manager and process leader. MA has a particular role in ensuring strategic overview of SOP. The IBs will play an important role in SOP ENV implementation at regional level, acting as interface between MA and beneficiaries. Their main responsibilities will be related to programming, monitoring, controlling and reporting activities. They have also been involved in the monitoring of ISPA projects in their region and in the development of grant schemes of environmental projects run under PHARE. The IB is organized per each of the 8 Development Region, as a specific body coordinated by an Executive Director and reports directly to the Managing Authority for SOP ENV.

The beneficiaries will play the main role in the management and implementation of the interventions approved under SOP ENV. They will also be responsible for the tendering and contracting of services and works related to their projects. Most of the beneficiaries of the SOP ENV are local public authorities, but also state organizations or NGOs. Support will be provided for less experienced partners that benefit from SOP ENV, by making use of the technical assistance budget.

SOP ENV is mainly oriented towards the development of management systems for environmental infrastructure, according to the national strategies in the relevant environmental sectors. These systems are designed to provide population with public services at European standards or to ensure them protection against natural risks. Therefore, the beneficiaries of SOP ENV are public authorities, at local or central level, or entities providing services of general economic interest (such as providers of public services or NGOs) or acting in market failure conditions. Communities in clearly defined geographical areas (i.e. by river basin) are encouraged to group together and to develop a joint long-term investment program for water sector development (Master Plans for Water and Wastewater). Priority investments at regional level aim to provide the population with adequate water and wastewater utilities, at the required quality and at acceptable tariffs. Regional projects will firstly address the water sector needs in urban agglomerations, where the environmental impact is usually higher and the beneficiary population is also more numerous. Some of the rural areas may also be integrated in the regional project if a significant environmental impact can be justified and/or cost-efficient components improve the sustainability of the overall investment. Prioritization of investments in the project area will also take into account the commitments assumed by Romania during the negotiation of Chapter 22-Environment from the Accession Treaty.

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The implementation and financing mechanism for each approved project under SOP ENV will be governed by a Financing Agreement signed by the MESD.

Table 5 RO Overall financing plan of SOP ENV

Structural Funding

(ERDF) Cohesion Fund Total

2007 50,580,264 221,792,472 272,372,736

2008 117,985,105 319,317,487 437,302,592

2009 149,019,785 429,487,432 578,507,217

2010 168,694,505 514,656,226 683,350,731

2011 206,330,853 554,815,177 761,146,030

2012 252,439,096 596,374,625 848,813,721

2013 291,602,587 639,374,524 930,977,111

Grand Total 2007-2013 1,236,652,195 3,275,817,943 4,512,470,138 Source: MESD, SOP ENV

The contribution of Structural Instruments is calculated on the basis of the following considerations:

• For projects financed from ERDF, for Priority Axes 2 and 4, the maximum rate for financing is 80%, and for Priority Axis 6 the maximum rate for financing is 75%;

• For projects financed from CF, for Priority Axis 1, the maximum rate for EU financing is 85%, for Priority Axis 3 the maximum rate for EU financing is 50% and for Priority Axis 5 the maximum rate for EU financing is 82%.

Overall, the Community co-financing represents about 80.4% of the total allocation for SOP ENV. Table 6 Financing Plan for SOP ENV per Priority Axis

Community

Funding (EUR)

National counterpart

(EUR)

Total funding (EUR)

Co-financing rate*

Priority Axis 1

CF

2,776,532,160 489,976,263 3,266,508,423 85.00%

Priority Axis 2

ERDF

934,223,079 233,555,770 1,167,778,849 80.00%

Priority Axis 3

CF

229,268,644 229,268,644 458,537,288 50.00%

Priority Axis 4

ERDF

171,988,693 42,997,174 214,985,867 80.00%

Priority Axis 5

CF

270,017,139 59,128,815 329,145,954 82.04%

Priority Axis 6

ERDF

130,440,423 43,480,141 173,920,564 75.00%

Total 4,512,470,138 1,098,406,807 5,610,876,945 80.42% Note: The co-financing rates were calculated on the basis of public eligible costs. Source: MESD, SOP ENV

Operations supported under Priority Axes 1 and 2 generate revenues through charges paid by households, businesses and industry for the services provided. With the application of “polluter pays” principle and “cost recovery” principle, as required by the law, the tariff levels will have to increase over the SOP ENV implementation period. However, an appropriate tariff adjustment policy will be closely observed to ensure that tariffs remain within affordable limits and that the operations are sustainable over their economic lifetime, this being the minimum requirement.

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The relevant Priority Axes for the water sector are Priority Axis 1 – “Extension and modernization of water and wastewater systems” and Priority Axis 5 – “Implementation of adequate infrastructure of natural risk prevention in the most vulnerable areas” (which deals with flooding and coastal protection).

Priority Axis 1 – “Extension and modernization of water and wastewater systems”: The beneficiaries of Priority Axis 1 operations are Regional Operators. The main beneficiary of Priority Axis 5 projects is NAAR. Project proposals must be submitted to the Management Authority within MESD during 2007-2011. All eligible projects must be finalized no later than 31.12.2015. The financing application must be accompanied by:

• Natura 2000 permit

• Economic analysis

• Master plan

• Feasibility study

• Institutional analysis

• Environmental impact evaluation

• Other permits/authorizations/agreements/certificates

Objectives:

• Provide adequate water and sewerage services, at accessible tariffs

• Provide adequate drinking water quality in all urban agglomerations

• Improve the purity of watercourses

• Improve of the level of WWTP sludge management

• Create innovative and efficient water management structures

This priority axis will be supported by Cohesion Fund. The operations to be developed under this priority axis will finance the following indicative activities:

• Construction/modernization of water sources intended for drinking water abstraction;

• Construction/rehabilitation of water treatment plants;

• Extension/rehabilitation of water and sewerage networks;

• Construction/upgrading of wastewater treatment plants;

• Construction/rehabilitation of sludge treatment facilities;

• Metering, laboratory equipment, leakage detection equipment, etc.;

• Technical assistance for project preparation (including tender documents), management and publicity (including public awareness), institutional governance improvement.

The water/used water sector will benefit from the largest part of SOP ENV funding – 60%. Large infrastructure projects will be financed in this sector, in order to cover several localities on a regional/county level. These projects will contribute significantly to the efforts to meet European environmental standards, and they will have a considerable impact on the development of targeted communities. This approach aims to increase the efficiency of investment costs (by achieving economies of scale), as well as the efficiency of operating costs. Table 7 RO Desired SOP ENV results for Priority Axis 1

Indicator Unit Baseline Baseline year

Source Target (2015)

Localities provided with new/rehabilitated water facilities in a regional management system

Number 60 2006 MESD 300

New/ rehabilitated wastewater treatment plants

Number 30 2006 MESD 200

Population connected to basic water services in a regional system

% 52 2006 MESD 70

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Wastewater treated (of the total wastewater volume)

% 35 2006 MESD 60

Number of Regional Water Companies created

Number 10 2006 MESD 35

Source: MESD, SOP ENV

Ten major water/waste water projects corresponding to Priority Axis 1 were prepared with ISPA technical assistance. Nine projects were submitted to the European Commission (EC) in 2007 for approval, and 1 will be submitted before the end of 2008. Public auctions for these first 10 projects (works and services) are scheduled to take place during March 2008 – September 2009; approved projects will be implemented during 2008-2012.

Thirty other projects were launched in 2007 and will be submitted gradually to the EC for analysis and approval in 2008-2009. Public auctions for these 20 projects are scheduled to take place during September 2008 – September 2009. Approved projects will be implemented in 2009-2014.

Table 8 Current Status of SOP ENV Water Projects Priority Axis 1

Project Value (approx)

Beneficiary Actions Benefiting population

Cluj-Salaj 197 mil EUR

Somes Water Company

Modernizing the water/used water infrastructure in the main agglomerations in Cluj and Salaj counties

525,000

Giurgiu 72 mil EUR SC Apa Canal SA

Modernizing the water/used water infrastructure in the main agglomerations in Giurgiu county

87,000

Turda-Campia Turzii

80 mil EUR Aries Water Company

Modernizing the water/used water infrastructure in the Turda-Campia Turzii area, Cluj county

97,000

Calarasi 100 mil EUR

ECOAQUA

Modernizing the water/used water infrastructure in the main agglomerations in Calarasi county

120,000

Tulcea 100 mil EUR

SC Aquaserv SA

Modernizing the water/used water infrastructure in the main agglomerations in Tulcea county

n/a

Projects approved by EC

Sibiu 90 mil EUR Apa Tarnavei Mari

Modernizing the water/used water infrastructure in the main agglomerations in the Media, Agnita, Dumbraveni and Copsa Mica area, Sibiu county

n/a

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Teleorman 122 mil EUR

SC Apa Canal SA Alexandria

Modernizing the water/used water infrastructure in the main agglomerations in Teleorman county

n/a

Gorj 90 mil EUR Apa Regio

Modernizing the water/used water infrastructure in the main agglomerations in Gorj county

n/a

Projects under approval by EC

Olt 73 mil EUR Olt Water Company

Modernizing the water/used water infrastructure in the main agglomerations in Olt county

n/a

Projects to be submitted to the EC in 2008

Brasov 180 mil EUR

Regional Operator Brasov Water Company

Modernizing the water/used water infrastructure in the main agglomerations in the Codlea, Rupea, Zarnesti area, Brasov county

n/a

Source: SOP ENV

Priority Axis 5 – “Implementation of adequate infrastructure of natural risk prevention in most vulnerable areas”

Objectives:

• Contribute to a sustainable flood management in most vulnerable areas

• Ensure protection and rehabilitation of Black Sea shore

This Priority Axis will be supported by the Cohesion Fund. The operations to be developed under this priority axis will finance the following indicative activities:

• Infrastructure for flood prevention and reduction of the destructive consequences of floods;

• Development of hazard and flood risk prevention maps, plans and measures, including public information and training in reducing risks;

• Technical assistance for project preparation, management, supervision and publicity;

• Rehabilitation of Black Sea shore affected by erosion;

• Technical assistance for project preparation, management, supervision and publicity. This Priority Axis is mainly aimed at protecting the population and material goods from the devastating effects of flooding. Areas of intervention will be selected based on the national strategy for the sector, as well as on key risk analyses. Another field of action is the protection and rehabilitation of the southern Black Sea shore, in order to reduce coastal erosion. The main beneficiary of Priority Axis 5 projects is NAAR. Table 9 Desired SOP ENV results for Priority Axis 5

Indicator Unit Baseline Baseline Year

Source Target (2015)

Projects on floods protection Number 0 2006 NAAR 10

Kilometers of seashore rehabilitated

km 0 2006 NAAR 10

Population benefiting from floods protection projects in the SOP ENV intervention areas

Number of inhabitants

0 2006 NAAR 1,500,000

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Reduction of incidence to floods risk in the SOP intervention areas

% 100% 2006 NAAR 30%

Extension of coastal area % 0 2006 NAAR 30

Note: All funding is designated for regions without transitional support Source: MESD, SOP ENV

Programs managed by MDPWH- Regional Operational Program REGIO (Regional Operational Program – ROP) is one of the first operational programs approved for Romania by the European Commission, and the only multi-sector operational program that finances both individual and integrated projects, with visible impact on regional and local development. The program is applicable to each of Romania’s 8 development regions. Regio’s objective is to reduce the differences in social and economic development between the more developed and the underdeveloped regions. It is financed through ERDF and has a total budget for 2007-2013 of 4.4 billion EUR. Out of the total funds available through the program, 84% are provided by the EU, 16% are national co-financing (14% public funding and 2 % private funding). Funds are granted by priority axis and development regions.

MDPWH is the managing authority for ROP (Regio) and the payment authority, being responsible for:

• determining a launch program for applications

• elaborating project selection criteria

• elaborating and signing framework agreements with the Intermediary Bodies (Regional Development Agencies, National Tourism Authority), regarding ROP

• making the final funding decisions

• evaluating ROP

• controlling the EU/national funds allocated to ROP

• authorizing eligible expenses

• receiving funding and making payments

Water projects in urban areas are covered by Priority Axis 1 – “Support to the sustainable development of towns – urban growth poles”. This priority axis aims to increase the quality of life and to create new jobs in cities, by rehabilitating the urban infrastructure, improving services, including social services, as well as by developing business support structures and entrepreneurship. In order to contribute to a balanced territorial development of the country and to avoid the increasing internal disparities, investments will be concentrated in those cities which act as regional and / or local growth poles and spread the development into the surrounding areas, giving priority to growth poles located in regions and counties with lower level of development in terms of GDP and unemployment.

Taking into consideration the present situation of Romanian towns and cities, it is envisaged that funds allocated to urban development be spent as follows: 60% for urban public infrastructure, 25% for social infrastructure and 15% for business environment. ROP only covers small-scale, individual projects in urban areas and spa resorts that are not covered by SOP ENV.

The integrated urban development plans should be implemented by projects addressing the following issues:

• Rehabilitation of the urban infrastructure and improvement of urban services, including urban transport

• Development of a sustainable business environment

• Rehabilitation of social infrastructure, including social housing and improvement of social services

The integrated urban growth poles development plans will be financed from all Operational Programs financed through structural instruments: ROP (Regio),SOP Competitiveness, SOP ENV, SOP Human Resources, SOP Transport, SOP Capacity Building, EAFRD – NRDP, Other public and private sources, including national and international banks.

An integrated development plan must include at least 2 individual projects from different categories, one of which must target the rehabilitation of urban infrastructure and the improvement of urban services.

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Water projects are covered by the Measures:

• Rehabilitation of the urban infrastructure and improvement of urban services, including urban transport � this Measure includes the development and/or modernization of urban infrastructure and public utilities

• Development of a sustainable business environment � this Measure includes setting up/modernizing/expanding basic utilities within the business structure

Eligible beneficiaries for ROP funding under Priority Axis 1 are:

• Local public administration authorities in urban areas

• Inter-community Development Associations

• Partnerships between local public administration authorities Priority Axis 1 targets:

• growth poles: Iasi, Constanta, Ploiesti, Craiova, Timisoara, Cluj-Napoca si Brasov)

• urban development poles: Arad, Baia Mare, Bacau, Braila, Galati, Deva, Oradea, Pitesti, Ramnicu-Valcea, Satu Mare, Sibiu, Suceava, Targu Mures

• towns and municipalities with over 10,000 inhabitants.

Projects can be submitted during 2008-2012 period under the condition to be finalized before the end of 2015. First call for projects opened on November 6, 2008 aiming exclusively towns and municipalities with over 10,000 inhabitants, projects proposals can be submitted starting with December 2, 2008 until March 31, 2009.

ROP funding for Priority Axis 1 will be allocated according to the structure below:

Table 10 RO ROP PA 1 allocations per development regions

Development Region

Funding (EUR)

North-East Region 68.11 mil

South-East Region 55.29 mil

South Region 59.38 mil

South-West Region 58.47 mil

West Region 43.15 mil

North-West Region 50.45 mil

Center Region 45.49 mil

Bucharest-Ilfov Region

123.26 mil

Total 503.60 mil Source: MDPWH, ROP

Table 11 The funding scheme for ROP Priority Axis 1

Rehabilitation of the urban infrastructure and improvement of urban services, including urban transport

Development of a sustainable business environment

Rehabilitation of social infrastructure, including social housing and improvement of social services

Total value of project (EUR)

485,000 – 38,000,000 485,000 – 24,000,000

485,000 – 38,000,000

Maximum % of non-refundable financing

98% 50% (40% for Bucharest-Ilfov Region)

98%

Beneficiary contribution

2% 50% (60% for Bucharest-Ilfov Region)

2%

EU funding 82.00% 86.73% 82.00%

National funding 18.00% 13.27% 18.00%

Source: MDPWH, ROP

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Programs managed by MDPWH -Cross border programs

MDPWH is the implementing authority of European territorial cooperation programs financed through:

1. European Regional Development Fund (ERDF):

• The Operational Cross-border Cooperation Program Romania-Bulgaria 2007-2013 has a total budget of 262 mil EUR and targets 7 counties in southern Romania (Mehedinti, Dolj, Olt, Teleorman, Giurgiu, Calarasi, Constanta) as well as 9 districts in Bulgaria (Vidin, Vrasta, Montana, Veliko Tarnovo, Pleven, Ruse, Dobrich, Silistra, Razgrad). Priority Axis 2 – “Environment” includes actions that aim to: o Develop common systems of environmental protection management o Develop common infrastructure and services to prevent natural disasters

Project proposals can be submitted starting with 2008, and eligible beneficiaries are operators, economic agents, public authorities, provided they apply as part of a cross-border partnership.

• Worth 275 mil EUR, the Operational Cross-border Cooperation Program Romania-Hungary 2007-2013 targets border counties in Romania (Timis, Arad, Bihor, Satu Mare) and Hungary (Csongrad, Bekes, Hajdu-Bihar, Szabolcs-Szatmar-Bereg). Water projects are eligible under Priority Axis 1 – “Improving essential conditions of common sustainable development in the cooperation area”, as this Priority Axis targets, among other priority sectors, the environmental protection sector. Eligible beneficiaries are public authorities and NGOs.

• The Operational Transnational Cooperation Program in SE Europe 2007-2013 is currently being implemented in Austria, Greece, Italy, Bulgaria, Hungary, Romania, Slovenia, Slovakia, Croatia, Macedonia, Albania, Bosnia & Montenegro, Serbia, Moldova and Ukraine. Priority Axis 2 –“Protecting and improving the environment” includes 2 measures that are relevant for the water sector:

o Improving integrated water management and preventing the risk of flooding o Improving natural risk prevention

The total funding of 245 mil EUR is available to public or private structures that can be involved in projects as partners or subcontractors. Projects are recommended to be finalized in 24 months and to be worth around 1.8 mil EUR.

• Launched in 2007 (first call for projects), the Operational Inter-regional Cooperation Program URBANACT II aims to optimize sustainable urban development policies. The Program has a total budget of 67 mil EUR, and water projects are eligible for the “Environmental Issues” measure of Priority Axis 2 – “Attractive and united cities”. Local, regional and national public authorities, concerned with the management of urban areas, as well as urban universities and research institutes are eligible for funding within this Program.

• Concerned with innovation and environmental protection, the Operational Inter-regional Cooperation Program INTERREG IVC is available to all EU states, as well as Norway and Switzerland. “Water management” is one of the main measures under Priority Axis 2 – “Environment and risk prevention”. The total Program budget is 405 mil EUR, available to public authorities and civil society organizations. Eligible regional projects must be worth between 500,000-5 mil EUR, with a finalization period of 36 months.

2. The European Neighborhood and Partnership Instrument (ENPI)

• The Common Operational Program Hungary-Slovakia-Romania-Ukraine 2007-2013 targets environmental issues under Priority 2 – “Common challenges”:

o Environmental protection, the management and viable utilization of natural resources

o Preparation for emergency situations

The 74 mil EUR funding is available starting with 2008 to national, regional and local organizations, associations, public authorities, economic agents. Regions eligible for the program are: counties Szabolcs-Szatmar-Bereg, Borsod-Abauj-Zemplen (Hungary); regions Kosice, Presov (Slovakia); counties Maramures, Satu Mare, Suceava (Romania); regions Zakarpatska, Ivano-Frankivska, Chernivetska (Ukraine). Environmental protection and preparation for emergency situations will benefit from 18.8 mil EUR (approx. 25% of the total budget).The first call for projects will be launched in February 2009.

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• With a total budget of 18 mil EUR, the Black Sea Basin Common Operational Program of Cooperation 2007-2013 targets Romania, Bulgaria, Greece, Russia, Turkey, Ukraine, Armenia, Azerbaijan, Georgia and Moldova. Water projects are included under Priority 2 – “Common valuation and protection of the environment”. Potential beneficiaries of the Program are: local and regional authorities, NGOs, universities, research institutes, development agencies, environmental protection agencies.

• Environmental projects are also covered under Priority 2 – “Environment and preparation for emergency situations” of the Common Operational Program Romania-Ukraine-Moldova. The total budget of 136 mil EUR is available to local and regional authorities, NGOs, universities and research institutes.

• Even though it is financed through a pre-accession instrument, the Cross-border Cooperation Program Romania-Serbia only became available in 2008 (for submitting projects). Scheduled for implementation between 2007-2013, the Program has a budget of 22 mil EUR between 2007-2009. Environmental issues are covered by Priority Axis 2 - “Environment and preparation for emergency situations”, and eligible beneficiaries are local and regional authorities, NGOs, universities and research institutes.

3.4 Development of alternative financing schemes in the water sector (including PPP)

International financing institutions WORLD BANK (WB) commenced its activity in Romania in 1991, during the beginning of Romania’s transition to a market economy. Between 1991 and 2006, the bank approved a total of 50 operations with commitments of 33 billion EUR, about 200 mil EUR per year.

WB operations in Romania consist of both public projects financed by the International Bank for Reconstruction and Development (IBRD), through direct loans to the Romanian government (through the Ministry of Finance), and of project privates, without state warrantee, with support by the International Financial Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA). A new Country Partnership Strategy was developed for 2006-2009, in order to support Romania in its efforts to fulfil its EU commitments. The new strategy involved loans of 300-365 mil EUR per year, as well as analysis and consultancy services. Between 1996 and 2001, WB co-financed the Bucharest Water Supply Project, which targeted the improvement of water services in Romania’s capital. Currently, there are currently 4 active water projects financed by WB, through IBRD loans. The Municipal Services Project aims to assist Romania to meet EU environmental directives in the water and wastewater sector, thereby improving the quality and coverage of water and wastewater services. The project has 3 components:

• Urban services in Bucharest municipality, which will include provision of urban services - water, sewerage, drainage, and road surfacing - in priority neighbourhoods (48 mil EUR)

• Urban services in Arad municipality, which will include provision of urban services - sewerage, drainage, and road surfacing - in priority neighbourhoods (47.2 mil EUR)

• Consulting services to prepare water and wastewater projects in 11 counties (11 mil UR). The project was approved by WB in 2006 and is scheduled for completion in 2011. The total value of the project is 137.3 mil EUR, and 106.2 mil EUR are covered by the IBRD loan (with a grace period of 5 years and a maturity of 17 years). The funds are structured by key development sector, with 5% of funding reserved for capacity building:

• Transport sector – 39%

• Water sector – 56% o Flood protection – 23% o Water supply – 17% o Sewerage – 16%

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The overall objective of the Hazard Risk Mitigation and Emergency Preparedness Project is to assist the Government in reducing the environmental, social, and economic vulnerability to natural disasters and catastrophic mining accidental spills of pollutants, by strengthening the institutional and technical capacity for disaster management and emergency response, by:

• upgrading communication and information systems

• implementing specific risk reduction investments for floods, landslides and earthquakes

• improving the safety of selected water-retention dams

• improving, on a pilot basis, the management and safety of dams, and waste dump facilities.

The global environmental objective is the reduction of catastrophic accidental spills of trans-boundary pollution loads, from mine operations flowing into the Danube and Black Sea basins. The specific objectives of the project are:

• Strengthening and enhancing the capacity of Romanian authorities to better prepare for, respond to, and recover from natural or man-made disasters,

• Reducing the seismic vulnerability of priority technical and social infrastructure, through the retrofitting of key structures, and institutional strengthening

• Reducing flood risk and vulnerability in critical areas in Romania

• Reducing the risk of water and soil contamination due to accidental mining spills of pollutants

The project was launched in 2004 and is scheduled for completion in 2009. The total value is 130.6 mil EUR, with 100 mil EUR on loan from WB. The water, sanitation and flood protection sector will benefit from 50% of funding.

The primary objectives of the Irrigation Rehabilitation and Reform Project are:

• Rehabilitating the main distribution systems in two stages, based on the likely long-term economic viability

• Supporting institutional reform in land reclamation, specifically through technical assistance and an appropriate management information system

• Supporting technologies for reducing energy consumption for irrigation

• Providing project management support

The beneficiary of the 68.6 mil EUR (53.3 mil EUR on loan from WB) project is MARD. The rehabilitation of the main irrigation schemes would directly benefit approximately 40,000 farming families and workers in agricultural associations. Approved in 2003, the project is scheduled for completion in 2011.

The Romania Integrated Nutrient Pollution Control Project aims to support the Government of Romania to meet the EU Nitrates Directive requirements by:

• Reducing nutrient discharges to water bodies

• Promoting behavioral change at the communal level

• Strengthening institutional and regulatory capacity

The project is scheduled for implementation between 2007-2011 and will support four components:

• a menu of investments focusing on Nitrate Vulnerable Zone-designated communes in ten river basins and eleven counties

• capacity building within MESD and NAAR as well as other national, regional, and county agencies involved with the nitrates directive

• broad public awareness and information campaign focused on investment replication and behavior change

• project management units

The total project value is 50.6 mil EUR, 33 mil EUR on loan from WB and 3.6 mil EUR provided as a grant from the Global Environmental Facility, while the remaining funds are sourced from the state budget. MESD is

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the beneficiary of these funds, which are allocated to the water sector in a proportion of 62% (solid waste management, sewage, sanitation).

European Bank for Reconstruction and Development (EBRD) has been financing infrastructure projects since 1995, starting with major investments in water and sewerage infrastructure. EBRD cooperates with state–owned infrastructure companies and utilities suppliers in order to finalize projects that meet the demands of municipalities and counties. Loans are complementary to state and EU funds and, since 2000, they do not require government warrantees. EBRD financing allows state authorities to redirect budget savings to priority investment areas. In the case of infrastructure projects, EBRD is focused on maintaining interest rates that facilitate long-term economic sustainability.

EBRD plays an important part in mobilizing EU funds, and has attracted almost 0.5 billion EUR in non-refundable financing through the PHARE and ISPA programs, directed at key areas of intervention (infrastructure, water networks, etc.). The bank implements a rigorous customer control system in order to secure a high project success rate, especially in the case of EU funded projects. Three EBRD projects with ISPA funding are currently in the final implementation phase. EBRD promotes regionalization as a strategy for accessing non-refundable financing and will continue to collaborate with its clients in this area.

In 2008, EBRD announced its support for 2 water projects in Romania, both of which are currently pending final review: Brasov Water Company and Arges Regional Water Project - Phase I.

The Brasov Water Company project is worth 202.2 mil EUR, 33.2 mil EUR of which will be provided by EBRD as a loan. The EBRD funds will co-finance a regional investment program of up to 190 mil EUR, which will include significant grant funding from the European Union, the Government of Romania and the local governments under Romania’s Cohesion Fund Program. These investments will optimize available water resources in Brasov County, as EBRD will finance the rehabilitation of the water and wastewater pipelines. Another component of the project includes a restructuring of the existing EBRD Municipal Environmental Loan Facility- OpId 18595, signed on 18 May 2002 with a committed amount of 12.2 mil EUR, to take into account the company's transformation into a commercial company and regional operator. As a result of this Project, previously un-served areas of Brasov County will receive water and wastewater services. More importantly, the Brasov Water Company will absorb water and wastewater operations from surrounding towns, many of which were not managed on a commercial basis. By restructuring itself as a regional operator, the company will have the basis to provide water services for the entire county in a commercially viable way as well as to optimize water resources. The company will have the size and capacity to absorb the funds, implement subprojects and ensure that the consolidated cash flow will provide a sound basis to service external debt.

The Arges Regional Water Project will allow Apa Canal 2000 S.A. Pitesti to address key infrastructure needs of Pitesti city and its outskirts, and is designed to improve efficiency of services provided by Apa Canal, combined with continuing EU Instrument of Structural Policies for Pre-Accession (EU - ISPA) investments in the water and wastewater sector. The EBRD loan of up to 7 mil EUR (out of the total 8.5 mil EUR representing the project value) will enable Apa Canal to efficiently increase its service area through the connection of previously un-served communities adjacent to Pitesti city to the main water supply and sewerage network.

The EBRD investment entails the construction of:

• 17.8 km of new sewerage network

• 28 km of new water supply network, and

• pumping system to ensure sufficient pressure to supply water in the network extension.

An ongoing project, signed in 2007, is the Oradea Water and Waste Water Extension project. The project entails the construction of:

• 108 km of new water supply pipe-work

• 140 km of new sewerages

• 99 km of new rainwater collectors

• secondary stage pumping system to ensure sufficient pressure to supply water in the network extension.

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The project, worth 48.8 mil EUR (12 mil EUR loan from EBRD), addresses a key infrastructure need in Oradea and is going to reduce pollution in the Crisul Repede River at the boundary between Hungary and Romania. In Oradea, there are 85.5 km of streets where approximately 26,000 residents are neither connected to the water nor sewerage system. In these areas, wastewater is either discharged into road ditches, resulting in the contamination of ground water, or directly into the river.

Table 12 RO Other water projects financed by EBRD

Project Year of Approval

Total Value EBRD loan Actions

APA NOVA Water Treatment Plant

2001 132 mil EUR 75 mil EUR

Improvement of the water distribution network and completion of the Crivina water-treatment plant in Bucharest

Municipal Environmental Loan Facility

2000 300 mil EUR 130 mil EUR

Co-financing EU-ISPA funded investments in the water, waste water and solid waste management sectors, in several municipalities

Municipal Utilities Development Program

1997 163 mil EUR 65 mil EUR

Loan financing of water sector investments in ten medium-sized cities. Financing priority water-supply and waste-water investments to improve service provision. Enhancing the performance of water companies and municipalities.

Source: EBRD website

European Investment Bank (EIB) is the EU’s financing institution, founded in 1958. It aims to contribute to achieving EU policy objectives by providing long-term financing of viable investment projects. EIB funding priorities are:

• balanced economic development of regions and social cohesion in the EU

• supporting SME investments

• protecting and improving the environment

• increasing Europe’s competitiveness by supporting research, development and innovation

• extending the trans-European transport and communication networks

• sustainable, competitive and safe energy

EIB can ensure co-financing for EU-funded projects and can mobilize large volumes of funds. The loan conditions are favourable to the beneficiary, due to small commissions, attractive interest rates and adequate reimbursement plans. EIB usually finances up to 50% of eligible project costs. The bank grants loans to public institutions, including local authorities, and to private operators. The main project assessment criteria are financial economic viability, as well as technical and environmental specifications.

Types of available loans are:

• individual loans – large-scale projects that cost over 25 mil EUR (financed individually by EIB)

• group loans – a number of concrete smaller projects, with lower investment necessities, all implemented by the same organization

• framework loans – usually reserved for public institutions, these loans finance a set of low- and medium-scale, unspecified projects, implemented by the same institution

• intermediated loans – specific to SMEs and local authorities, these are granted through an EIB partner bank in Romania. Romanian commercial banks that grant EIB-mediated loans in Romania are: BRD Groupe Societe Generale, the Romanian Commercial Bank (BCR), Bancpost, HVB Bank, Sanpaolo IMI Internazionale.

EIB finances private water public utilities companies, water projects and public authorities in EU. EIB financing in the water sector is driven by the high EU environmental standards, especially the Directives regarding drinking water quality and waste water collection and treatment. Most financing projects include the

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modernization and expansion of existing distribution, collection and treatment networks. These water projects are an integrated part of national/regional/local investment strategies for the water sector.

A water project currently under appraisal is the Cluj/Salaj CASSA Water Project. The beneficiary of the project is the Somes Water Company, regional operating company for water and wastewater services in Cluj and Salaj counties. The purpose of the project is co-financing of the investment project for expansion and rehabilitation of the water and waste water networks, construction and refurbishment of pumping stations and treatment facilities for water and wastewater.

The project is part of the Priority Axis 1 of the SOP ENV, supported by Cohesion Funds, with end of implementation expected by 2013. It aims to improve public health and environment protection in the region comprising the counties Cluj and Salaj in Romania, by upgrading the essential water and wastewater infrastructure. The investments affect a population of around 520.000 inhabitants and total project costs amount to 197 mil EUR, 26 mil EUR of which represent EIB finance.

Council of Europe Development Bank (CEDB) is the oldest multilateral financial institution in Europe, founded in 1956 as a social policy instrument of the Council of Europe. It supports socially-oriented projects by granting long-term loans or guarantees to member states, local authorities and financial institutions. CEDB finances projects aimed at developing infrastructure that will help modernize rural areas and improve living conditions in urban areas. Romania became a member of CEDB in 1996 and has a 1.092% share in the bank’s capital. Currently, Romania is the beneficiary of CEBD loans with a combined worth of over 600 mil EUR, directed towards improving infrastructure, health, education, child protection, dwellings, environmental protection and culture.

In 2007, Romania contracted a 298.5 mil EUR loan from CEBD for investments in environmental infrastructure. The total project value is 1.1 billion EUR, allocated for 121 investment objectives which include:

• flood protection works

• protecting the Black Sea coastal area

• rehabilitating surface water structures

• creating new water sources

• intensifying drinking and industrial water supply

• ensuring the supply of quality drinking water

The MESD project (managed by a Management Unit that will be created within NAAR exclusively for this project) will have a significant socio-economic impact, as it will ensure the structured rehabilitation of hydrographic basins, while implementing EU standards in hydrology and meteorology and promoting sustainable development. It is estimated that 320 km of dykes will be built within this project, and 300 km of river banks will be consolidated (rivers: Mures, Crisuri, Somes, Jiu, Olt, Siret, Arges). Ecosystem protection works will be performed in the Patlageanca area (Danube Delta) and 7 new water reservoirs will be built, with a combined capacity of 72 mil m3.

CEBD will also finance 77% (160.1 mil EUR) of the first stage of the “Integrated system for the rehabilitation of water supply and sewerage systems, of drinking water treatment stations, of waste water purification stations in communities with under 50,000 inhabitants” implemented by MDPWH in collaboration with MESD (see also the chapter on Government Funds).

CEBD also acts locally in Romania, through two loans:

• 30 mil EUR for rehabilitating the water and sewerage systems in 9 communities in Mures county

• 51,2 mil EUR for flood protection works in SW Romania

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Other donors One of Romania’s partners in the water sector is the Japanese Government, represented by the Japan International Cooperation Agency (JICA). Founded in 1974, JICA is an implementation agency for technical assistance, focusing on building institutions, strengthening organizations, and developing human resources that will enable developing countries to pursue their own sustainable socioeconomic development. Technical cooperation projects are one of JICA's main types of overseas activities. They are results-oriented, with Japan and a developing country pooling their knowledge, experience, and skills to resolve specific issues within a certain timeframe. The projects may involve the dispatching of experts from Japan to provide technical support, invitation of personnel from developing countries for training, or the provision of necessary equipment.

On 22 November 1995, the Japanese and Romanian governments signed a bilateral agreement concerning a Japan Overseas Cooperation Volunteers Program, offered to Romania by the Government of Japan, through JICA programs. Two years later, in August 1997, JICA ROMANIA Office was formally opened in Bucharest. Currently, study teams are dispatched to provide assistance in formulating development plans for the public sector and other basic areas of infrastructure, which are keys to the socio-economic development of Romania. JICA development studies focus not only on the economic side of the project, but also on its social, organizational, managerial and environmental side.

One major study performed by JICA in Romania is the Study on Protection and Rehabilitation of the Southern Romania Black Sea Shore.

JICA has contracted a team of experts to study the major problems and solutions for the protection and rehabilitation of the study area. The project was implemented during 2005-2007, having the following objectives:

• Formulating a coastal protection plan for the study area;

• Conducting a preliminary design of the priority projects;

• Transferring technical skills and knowledge to counterpart staff.

The beneficiaries of the study were MESD and NAAR. In phase I a basic study was performed:

• collection and review of existing data

• observation of beach morphology and coastal structures

• analysis of the coastal erosion mechanism

• evaluation of the effect of existing protection structures

• examination of sand procurement sites

• formulation of the basic policy of coastal protection plan

• selection of priority project sites

In phase II, a coastal protection plan was formulated and a feasibility study on priority projects was performed.

The European Economic Area (EEA) and Norway Grants were established in conjunction with the enlargement of the European Union in 2004. In 2007, Bulgaria and Romania also joined and became beneficiaries of EEA and Norway Grants. In the five-year period 2004-2009, 1.3 billion EUR is made available. A total 672 mil EUR is channeled through the EEA Grants jointly set up by Iceland, Liechtenstein and Norway, to the 12 countries that have joined the EU since 2004, as well as to Greece, Spain and Portugal. Norway contributes with around 95% of the funding. Norway makes available an additional 68 mil EUR to bilateral cooperation programs with Bulgaria and Romania.

The objective of the bilateral programs is to stimulate economic growth and sustainable development, and to promote innovation and technology transfer. Consequently, the programs prioritize sectors in which Norway has specific competencies and technologies, and the beneficiary states have specific needs. To be eligible for support, a partnership between a participant from one of the beneficiary states and a participant from Norway must be established, and it must be established prior to application. Public or private companies, institutions, ministries, non-governmental organizations and social partners are all eligible applicants within the sectors of priority to the programs, provided that they are legal entities, and that a partnership has been established

The first and only open call for individual projects in Romania closed on 20 June 2008.The call made approximately 40.5 mil EUR available for projects in four priority areas: environment, human resource development, health and childcare and conservation of European cultural heritage. In total 95 applications were received, the priority sectors of environment and human resources development being the biggest sectors with 29 applications each. Despite its success, the call for proposal for the Norwegian Cooperation Programs will not be re-opened.

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Table 13 RO Water Sector Projects Financed By EEA Grants

Approval date Name of applicant

Name of partner

Project objective Grant (EUR)

Total budget

(EUR)

Project

deadline

19.05.2008 Norwegian Geotechnical Institute

University of Bucharest

Protection of groundwater resources – RO BG Danube

16,000 26,704 30.08.2008

22.08.2008 DET Norske Veritas AS

GEOECOMAR;

Bulgarian Academy of Sciences;

Turkish Black Sea Commission

Risk management and contingency planning for the Romanian and Bulgarian Black Sea coast

12,500 20,830 28.12.2008

Source: Business Development Group (based on information from EEA and Norway Grants)

There are two main ongoing water projects in Romania which benefit from United States of America (USA) financing. One project is DESWAT (Destructive Water Abatement and Control of Water Disasters), focused on flood management (river monitoring, short and medium term hydrological forecast, etc.). This project is financed by the Romanian Government and through an USA credit. The contractor for the DESWAT project is Lockheed Martin Overseas Corp. The second project is WATMAN, which will integrate the data resulting from the DESWAT project, and from another project, SIMIN. WATMAN is financed by USAID (United States Agency for International Development) and USTDA (United States Trade and Development Agency). A subset of USAID, EcoLinks, funded a water management study tour of officials from MESD, the Ministry of Finance, NAAR and Ovidius University to USA water management institutions (such as the UWM Great Lakes WATER Institute). The trip introduced Romanian officials to research and technology that could improve Romania’s water and wastewater management and flood control measures, and that could restore polluted waters. It was also a chance to build international partnerships working toward sustainable development in Romania Germany is also a partner in a bilateral program in Romania, concerned with Integrated Water Resources Management (IWRM). A declaration of collaboration in the area of water management was signed between MESD and the Ministry of Environment, Health and Consumer Protection from Bavaria, in Munchen on 25 of April 2005. In order to promote IWRM, the project partners also made presentations about IWRM implementation in collaboration with the Wasserwirtshaftsamdt Hof (Water Management Office-Hof), during the Romanian-Bavarian Economic Forum “Technologies in Water Management” (Sibiu, September 2007). MESD also elaborated, in the beginning of 2008, the 'Guide for promotion of the research in the domain of integrated water resources management'. The first call for the research project had a budget of approximate 2 bill EUR, out of which Romania’s contribution amounted to 100.000 Euro.

As part of its cooperation with South-eastern Europe, Switzerland has supported Romania's transition from the start through bilateral cooperation projects and regional programs. Romania has, in fact, been a priority country for Swiss cooperation with Eastern Europe since 1992 (financial assistance through SECO – State Secretariat for Economic Affairs), and 1996 (technical assistance through SDC – Swiss Agency for Development and Cooperation). The Country Program Romania 2001 – 2005, applicable until 2007, defines the technical and financial cooperation between Switzerland and Romania in the medium term and provides the framework for SDC and SECO activities in Romania. Swiss cooperation with Romania aims to provide support for the transition to democracy and a market economy, by means of knowledge transfer and assistance in problem solving. Before the Swiss Cooperation Office in Romania closed, at the end of May 2008, cooperation efforts were focused on four main areas:

• Promotion of the private sector

• Reforms in the health sector

• Modernizing the infrastructure and environment protection

• Conducting regional programs

Under the heading “Modernizing the infrastructure and environmental protection”, SDC-SECO implemented the Clean water supply and water treatment (AEPA) project. The OVR (Operation Villages Roumains) program, which initiated direct village partnerships between Europe and Romania after 1989, encouraged

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several Swiss communities to express their interest in supporting environmental projects in Romania. As a result, AEPA projects were established between Ciolpani (Prahova) and Morges, Agarbiciu (Sibiu) and Belmont, Sanmartin (Harghita) and Meyrin, Telciu (Bistrita) and Monthey. All these partnerships have undertaken a program of water supply rehabilitation. The rehabilitation of the water supply services required replacing old pipes with new ones, and the construction of a new distribution system. The projects were initiated in 1994. Pipe replacement, water pump acquisition and construction of the new distribution system were all completed by 1999. The systems became functional in 1999, while the construction of sewage and filtering facilities was completed in 2000.The AEPA projects were financially supported by SDC and Romanian local authorities. The total budget amounted to 1 billion EUR. Other partners involved in the AEPA projects were Infraconsult SA (in Telciu), Foradex (a Romanian enterprise), and the local Romanian authorities.

Under the heading “Conducting regional programs”, SDC implemented ESTROM – Environmental Science and Technology in Romania. ESTROM was a joint program of SDC, the Swiss National Science Foundation (SNSF) and the Romanian Ministry for Education and Research (MEC). It supported science and research in Romania and strengthened scientific co-operation between the two countries. The specific research projects seek to increase the knowledge and understanding of polluted water environments, to evaluate the negative impact of water pollution and to propose to decision-makers realistic solutions for abating the deteriorating effects of water pollution, thereby contributing to sustainable socio-economic development and improved quality of life in Romania. The research phase of ESTROM began on 1.04.2005 and ended in September 2007.

A potential partner for Romania in the near future is the United Kingdom (UK). Currently, the UK is promoting the Romanian water sector as one of great potential for British business. Water and wastewater systems in all regions across Romania are an important focus of the UK Trade and Investment Agency, due to the approx. 3.3 billion EUR directed to the sector. Marine and coastal environment protection is also promoted as a target for specialized UK companies. In order to increase British presence in Romania, a UK Seminar Mission to Romania is planned for during 19-32 January 2009 (In March also In Bulgaria). The Seminar Mission is focused on water services, and aims to encourage British companies to take advantage of EU funds directed at improving water sector facilities in Romania. Alternative financing schemes (PPP) Currently, the Public-Private-Partnership (PPP) is promoted in Romania as an excellent alternative to traditional public project financing, and as an ideal option of co-financing EU funded projects. PPP is a contractual collaboration between public authorities and the private sector (companies/investors) for the purpose of designing, planning, financing and implementing projects that are usually developed through conventional mechanisms, such as the public acquisition procedure. The public authority seeks to maximize the socio-economic profitability of the public investment (developing the necessary infrastructure within acceptable financial and time limits), and the private operator aims to maximize the profit. An ideal PPP will:

• Supply high quality services at the lowest public costs

• Optimize the allocation of risk to the private sector

• Bring economic, social and technological benefits

• Ensure the modernization of the economy and bring indirect benefits

• Provide access to the financial market and develop local financial markets

• Strengthen the regulatory role of the stat and facilitate the transition from services owner/operator to services monitor

• Ensure the stability of the project

In a PPP, a solid financial package is prepared for the project, as the private partner provides the guarantee of quality and efficiency. Project management units (private entities) control all the aspect of the project and the relations between involved parties. The public partner provides assets, funding and warrantees, and oversees the project. Conventional financing is less suitable for a PPP – limited assets, income-based cash flow – so alternative sources of funding must be selected (EU funds, international financial institutions, etc.). As a result of increasing demand, many companies have entered the public services management sector through a PPP, which must be developed as a long-term agreement (but not longer than 49 years).

In the water sector, PPPs must take into account the following issues:

• Water is an essential good that must be supplied by public authorities, and the price can not be increased to very high levels

• The public authority must protect the public interest and must take extra care in selecting its private partner

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• The private partner must provide innovative solutions for providing high quality services (for water quality, customer relations, equipment and facilities, project management, etc.) at acceptable costs

• PPP is governed by European, national and local laws

• The main PPP options are:

• Management/leasing (regulated by GO 32/2002)

• Privatization (regulated by Law 137/2002)

• Build-Operate-Transfer (BOT) (regulated by GO 16/2002)

If the government objective is efficiency, it is likely to select a management or leasing contract. For the public authority, a leasing contract may lead to better results than a management contract, as it exposes the private agent to commercial risk and encourages sales growth and cost reduction. However, leasing is only efficient if the government ensures an economically-safe environment and if tariffs can be maintained at a high enough level to allow for a reasonable return on investment. If a new investment is required, the BOT contract is the better choice, but only if the government can guarantee a good return on investment by properly regulating the commercial framework.

In Romania, the regulatory framework for PPPs consists of GO 16/2002, regarding PPPs, and HG 621/2002, specifying the methodology of implementing GO 16/2002. GO 16/2002 details:

• the proper methods of performing (pre)feasibility studies

• information regarding the letter of intent and necessary documentation

• the selection and negotiation procedures

• the main types of PP

• the standard PPP contract and project agreement

• the methodology of calculating project costs

• the project risk allocation matrix

According to the regulatory framework, the steps for initiating a PPP are:

• The public authority (national/regional/local) initiates the PPP on the basis of pre-feasibility study performed at its own expense

• The public authority announces (in the Official Monitor) its intention to initiate a project through a PPP

• Within 60 days, the public authority receives letters of intent and necessary documentation from interested investors (if no offers are received within 60 days, the full procedure is reinitiated)

• The public authority assembles a Negotiations Committee which, over 30 days from receiving the letters, analyzes the offers and preselects investors

• The Negotiations Committee publishes the list of preselected investors, and, within 15 days, signs pre-contracts with each applicant

• Negotiations are continued with the pre-selected applicants until the final decision is made (based on technical, economic and financial criteria)

• The public authority communicates the winner of the negotiations and accepts potential complaints from other applicants

• The contract between the public authority and the winning applicant is signed, and the PPP Company is established

The PPP Company is a Romania-based enterprise, established by the public authority and the private investor, for the sole purpose of designing, financing, constructing, exploiting, maintaining and transferring a public good, based on a PPP project. Once the PPP contract is finalized, all public goods created within the project are transferred free-of-charge to the public authority, in good condition, exploitable and free of any liabilities.

The Central PPP Unit in Romania is the Ministry of Economy and Finance which:

• Trains PPP experts

• Promotes the National PPP Strategy

• Promotes a PPP manual and toolkit

• Promotes PPP pilot projects

• Monitors PPP project implementation

The Ministry of Economy and Finance also collaborates with the Ministry of Internal Affairs and Administrative Reform and other central public authorities, depending on the sector in which the PPP will be set up.

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One of the most used examples of PPPs in Romania’s water sector is the 1996 concession agreement between Veolia (affiliated with the French company Vivendi Water) and the municipalities of Bucharest and Ploiesti for the management of the water distribution system. Privatization of the Bucharest water system took place following WB recommendations, and Veolia was the chosen private partner. Apa Nova is the PPP enterprise created under the link between Veolia and Bucharest’s municipality. In 2000, Apa Nova won a tender for the management of the Bucharest water concession, including the development of the Crivina Plant. The general conditions of the PPP agreement between Apa Nova and Bucharest for the Crivina Plant are the same as for 1996’s PPP agreement with Veolia. In practice, Veolia has now been incorporated into Apa Nova.

The lack of adequate skills in Romania was one of the main rationales behind the government’s pursuit of a partnership with a foreign operator. Thus, objectives for the project included, among others, the transfer of relevant skills to Apa Nova staff through the introduction of international management practices and operational expertise. EBRD assisted in developing the local skills in areas such as operations management, energy efficiency, capital budgeting and financial management. Other objectives included:

• Increasing efficiency gains and operation performance

• Achieving higher standards of service

• Upgrading the water system infrastructure

• Improving capital availability and efficiency

The initial capital investment of Vivendi Water amounted to 35 mil EUR, which funded the construction of 2 drinking water treatment plants, complete with reservoirs. Subsequently, the private agent invested 6.8 mil EUR in the construction of 7 pumping stations, and 20 mil EUR in the construction of 2,700 km of drinking water network and 2,400 km of sewerage network. The Municipality of Bucharest is the owner of all public goods, the decision maker for all investment programs and infrastructure expansion and is protected by the Competition Office with regard to tariff adjustments. Apa Nova administrates the infrastructure, modernizes, rehabilitates and maintains public goods under concession, finances and implements investments and ensures the operation.

Another successful water management PPP was set up in the Lugoj Municipality. This PPP was supported by the EU, the Romanian Government and the Timis County Council, and was partially funded (technical assistance, etc.) by the Open Foundation Society. The aim of the project was providing a solution to the urban water management problems in Lugoj. The project partners are Lugoj Local Council (public partner) and Ruhr Wasser AG International and Meridian 22 (private partners). Within the project, a PPP Company was set up, responsible for managing Lugoj’s water system – SC Ruwatim SRL.

At the moment, 8 ISPA projects with PPP components are being implemented in Romania, 2 of which are focused on water and sewerage systems. PPP structures exist within the Ministry of Finance, Ministry of Transport and Ministry of Internal Affairs. PPP Excellence centers have been set up within the Chamber of Commerce and Industry of Romania, as well as in Bucharest and Calarasi.

For more info: Ministry of Public Finance General Directorate Managing Authority for Infrastructure Ciprian Gorita Head of Central Unit for Coordination of Public-Private Partnership Activities Tel: + 40.21.3025300 Fax: +40.21.302 53 37 E-mail: ciprian.gorita@mfinante.ro

Any PPP intervention linked with SOP ENV will be settled following a transparent and competitive awarding procedure in accordance with the principles of the Treaty and the EU law.

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4 Tendering procedures

The procurement of all contracts financed through SOP ENV will be done in compliance with EU legislation, and with the primary and secondary national legislation implementing EU provisions on public procurement.

In order to ensure coherence with EU procurement polices, the Romanian authorities transposed Directives 17/2004/EC and 18/2004/EC, by adopting Law No 337/2006 for approving the Emergency Government Ordinance No 34/2006 on awarding of public procurement contracts, public works concession contracts and services concession contracts.

To enforce the above legal provisions, the National Authority for Regulating and Monitoring Public Procurement (NARMPP) was set up. This institution has the role of:

• developing public procurement strategies

• ensuring coherence with the Community acquis

• ensuring conformity in the application of legislation

• fulfilling EU Directive obligations

• monitoring, analyzing and evaluating the methods used for awarding public contracts

• advising and training personnel involved in procurement activities

All public procurement contracts will be awarded in compliance with the new harmonized national legislation. The principles applied in contracting are: non-discrimination, equal treatment, mutual recognition, transparency, proportionality, efficiency of used funds and accountability.

The general procedures for concluding public procurement contracts are the open and the restricted tender. The contracts are published in the SEAP, in the National media and, where the relevant thresholds according with Community Directives are applicable, in the Official Journal of the European Communities. The law also provides as exceptions, the competitive dialogue, the direct negotiation or offer request, the framework agreement, the electronic auction and the dynamic purchasing system.

The General Inspectorate for Communication and Information Technology is the operator of the Electronic System for Public Procurement (SEAP)). Starting with January 2007, all state authorities are required to publish all tendering notices on www.e-licitatie.ro, the official website of the SEAP, operated by the Information Society Services Agency (ASSI). Through SEAP, registered public institutions publish procedures related to the granting of public acquisition contracts open to any economic operator. All open auction notices are also published in Romania’s Official Monitor, Part VI, Public Acquisitions (latest 1 day after the SEAP announcement). Every economic agent interested in participating in electronic public auctions must first register free of charge in SEAP, a participation being is required when exceeding 20 participations per month or 50 catalogues positions within 2 years after registration.

Publishing auctions in the EU Official Journal (http://simap.europa.eu) is mandatory if the value of the contract is larger than 5 million EUR (any type of contract), 420,000 EUR for utilities contracts or 125,000 EUR for other contracts. The eligibility and selection criteria make reference to:

• the personal situation

• the ability to exercise the professional activity

• the economic and financial situation

• the technical and/or professional capacity

• quality assurance and environmental standards.

The awarding criteria are: the most economically profitable offer or, exclusively, the lowest price. The contracting authority has the responsibility for the decisions made during the process of awarding public procurement contracts.

There are still speculations that some auctions can by-pass SEAP based on tender conditions that may favour certain economic agents. Another potential limitation is not all tendering procedures are available in English language.

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Since its start, the 10,696 contracting institutions registered with SEAP have published 251,867 announcements and participation invitations related to public acquisition procedures, of which 17,967 were announcements published in the Official Journal. To date, www.e-licitatie.ro has been used for public acquisition procedures worth over 88 mil EUR. NARMPP provides training, courses and seminars for the main purchasers from central and local level, including institutions involved in the management of the SCF and potential beneficiaries.

In order to improve the quality of the public procurement system and to ensure compliance with national legislation in the field, the Ministry of Economy and Finance, through its specialized structures at central and territorial level, verifies the process of contract awarding based on risk analysis and on a selective basis.

Royal Netherlands Embassy in Bucharest is issuing and distributing a weekly "Romania Water Projects Bulletin" with active tenders for the water sector (www.hollandtrade.ro).

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C Bulgaria List of Abbreviations Bulgaria BAT Best Available Techniques

CF Cohesion Funds

CSP Compliance Schedule Plans

EBRD European Bank for Reconstruction and Development

EC European Commission

EIB European Investment Bank

EMEPA Enterprise for Management of Environmental Protection Activities

MoAF Ministry of Agriculture and Food

MoEW Ministry of Environment and Water

MH Ministry of Health

MRDPW Ministry of Regional Development and Public Works

MES Ministry of Emergency Situations

NGO Non Governmental Organisations

NIMH National Institute of Metrology and Hydrology

OP Operational Programme

PE Population Equivalent

PPL Public Procurement Law

PPP Public Private Partnership

RBMD River Basin Management Directorates

RIPCPH Regional Inspectorates for Preservation of and Control on Public Heath

SCEWR Sate Commission for Energy and Water Regulation

SF Structural Funds

SG State Gazette

WFD Water Framework Directive

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1 Brief Overview of the Bulgarian Water Sector Map 4 River Basins Bulgaria

Source: Ministry of Environment and Water, National Report on Water Management at River-Basin Level in the Republic of Bulgaria, 2005

1.1 General Information

The territory of Bulgaria is 110 912 square kilometers with population slightly below 8 million. The country is characterized by rich diversity in morphological, geological, geo-morphological, hydro-climatic and soil-biogenic aspect. To the north, the River Danube separates Bulgaria from Romania, to the east is the Black Sea, to the south are Turkey and Greece and to the west are Macedonia and Serbia. Over two thirds of the country’s territory is situated in the zones of up to 600 m above the sea level. Predominant are plains and hilly lands. The average altitude of the country is 470 meters above sea level. The climate is defined by southern temperate continental climatic zone and occupies a transitory position to the Mediterranean climate. Mean annual air temperature is about 10,5С. The average precipitation for Bulgaria is about 700 mm, resulting in about 75 billion cubic meters precipitation per year. Its distribution is exceptionally uneven both in terms of time and on the territory of the country. In the plain and hilly regions the precipitation is between 450 to 850 mm, and in the mountainous areas – from 850 to 1200 mm. Therefore many dams have been constructed to regulate water distribution according to the needs. The hydro-geographic network of the country is rather complex and in most of the regions – quite dense, without very big rivers with the exception of the River Danube forming the northern border. Nevertheless Bulgaria has scares water resources in comparison to other European countries. Depending on the year from 9 to 24 milliard m

3/year are generated on its territory which is about 97% of the total runoff per year. Per capita

this accounts to 2300-2500 m3/year. Underground water resources form about 30%-32% of the overall water

resources of the country. The fresh underground water resources have been estimated to 6 milliard m3/year

and those possible to use to 4,9 milliard m3/year.

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The average annual water use is about 10-12 milliard m3/year and is distributed as follows:

• Drinking/domestic water supply – 8%-10%

• Irrigation – 5%-35%

• Industry – 20%-26%

• Hydropower generation – 15-35% About 34% of the country territory was included in Natura 2000 network and was designated as protected zone for birds/habitats. Bulgaria’s power generation is split between coal (46%), hydroelectric (9%), oil and gas (4%) and nuclear (41%). As of 2005 about 125 hydropower plants were in operation in Bulgaria. However, they utilized only about 33% of their technical potential. The interest in the renewable energy sources in the last years made the small hydropower plans also popular. About 300 request for permits for construction of small hydro power plants have been submitted to the MoEW in 2006. The hydropower potential of Bulgaria was estimated to about 1000 GWh/year. An Agreement with Greece (signed on 22 December 1995, in force since 19 September 1996 and valid within a period of 35 years - 2030) obliges Bulgaria to provide to Greece at least 29% of the waters of Mesta River generated on the Bulgarian territory –according to the average multi-annual flows.

1.2 Organization of the Water Sector in Bulgaria

Water in Bulgaria is managed as a national natural resource.

1.2.1 Brief History

State governance on the waster resources started soon after the liberation from the Ottoman empire in 1878. However, the first significant legislative act was adopted in 1920 - the Parliament passed a Law on Water Syndicates together with a State water management programme. Administrative structures were created – A Supreme Water Council to the Ministry of Agriculture, State Property and Water Syndicates. In 1935 the Water Syndicates were transferred to the Ministry of Public Buildings and Public Works and new responsibilities with relation to hydro power generation were assigned to them. Irrigation and Drainage Fund was created soon after. It was used to support construction of irrigation systems (35 000 ha), 400 km of dykes, 130 km river training works, 24 hydro power stations. About 25 000 ha swamps were drained. Soon after the Second World War the communist government adopted a Law on Water Economy according which all water related structures became state property. A 2 year plan for development of water economy was adopted and new administrative and engineering structures were created – the Ministry of Electrification and Melioration, a Stare Company Energohydroproject was created to develop engineering projects and a State Company Hydrostroy - for construction. The Water Syndicates were dissolved in 1953. The coming years were marked with massive construction works – dams, hydro power plants and irrigation and drainage systems. By 1986 2 000 dams were constructed with total volume 8 500 million m

3 of water.

1.2.2 Present situation

Since 2000 Water management in the country was re-organized to comply with the provisions of the European Union (EU) Water Framework Directive. It is regulated in Chapter 10 of the Water Act and is based on the following principles:

• The river basin is the unit used for managing quality and quantity of both surface and ground water in order to achieve sustainable water use and sustain ecosystems.

• Solidarity and safeguarding public interest by joint action and cooperation at all governance levels: central administration, municipal administration, water users and environmental groups.

• Polluter pays principle.

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The waters are managed at national level by the Ministry of Environment and Water (MOEW) and at basin level by 4 River Basin Management Directorates (RBMD) and by municipalities. In 2002 the country was sub-divided into 4 water management river basins – Danube River Basin (headquarters located in Pleven), Black Sea River Basin (headquarters located in Varna), West Aegean River Basin (headquarters located in Blagoevgrad) and East Aegean River Basin (headquarters located in Plovdiv). Public participation in the water management is ensured through the Basin councils - public consultative commissions to the RBD. The basin councils are chaired by the directors of basin directorates, with their membership being shared among the state administration (up to 20%), the local administration (up to 30%), water users and owners of irrigation and other facilities (up to 30%) as well as by NGOs and research institutes related to water issues (up to 20%).

1.2.3 Legal framework including adherence to Water Framework Directive

The legal framework regulates the usage and protection of water resources as well as the services provided in the sector. The framework legislative acts are:

• Nature Protection Law (SG,.91/25.09.2002)

• Water Law (SG. 67/27 Jul 1999)

• Law for Regulation of Water Supply and Sewerage Services (SG, 18, 25.02.2005 г.) and the following regulations to it – Regulation on the long term levels, conditions and regulations for the annual target levels of quality indicators in water supply and sewerage services (SG 32, 18 April 2006); Regulation for the prices of the water supply and sewerage services (SG 32, 18 April 2006); and Regulation for the terms and conditions for registration of the experts to support the Sate Commission for Energy and Water Regulation in implementation of control on water supply and sewerage operators (SG 23, 17 March 2006)

• Territorial Development Act (SG 1, 2 January 2001)

• Law on Black Sea Coastal Area Development (SG 67, 29 July 2008).

• Disaster Protection Law (SG 102, December 2006) Bulgaria has fully transposed the WFD and the supporting directives into its national legislation. Only the newly adopted Floods Directive (2007/60/EC) is yet to be transposed. The main legislative acts in the water sector and their correspondence to EU legislation are listed below:

Directive 2000/60/EC establishing a framework for Community action in the field of water policy, amended by Decision No 2455/2001/EC establishing the list of priority substances in the field of water policy

• Water act (Prom. SG. 67/27 Jul 1999, corr. SG. 66/15 Aug 2006, amend. SG. 105/22 Dec 2006, amend. SG. 108/29 Dec 2006, amend. SG. 22/13 Mar 2007, amend. SG. 59/20 Jul 2007)

• Regulation № 13 оf 2 April 2007 on characterization of surface water (State Gazette 37/8 Mai 2007)

• Regulation № 5 of 23 April 2007 on water monitoring (State Gazette 44/5 June 2007)

• Regulation № 1 of 10 October 2007 on the Exploration, Use and Protection of Groundwater (State Gazette 87/30 October 2007)

• Order № RD-321 of 7 May 2007 of the Minister of environment and water for determination of priority and priority hazardous substances in the field of water policy (State Gazette 44/5 June 2007)

Directive 76/160/EEC concerning the quality of bathing water

• Regulation No. 11 of 25 February 2002 on the quality of bathing water (State Gazette No.25/08.03.2002)

Directive 98/83/EC on the quality of water intended for human consumption

• Regulation No. 9 of 16 March 2001 on the Quality of Water Intended for Human Consumption (State Gazette No. 30 of 28 May 2001)

Directive 75/440/EEC concerning the quality required of surface water intended for the abstraction of drinking water, amended by Directive 79/869/EEC concerning the methods of measurement and frequencies of sampling and analysis of surface water intended for the abstraction of drinking water and Directive 91/692/EEC standardizing and rationalizing reports on the implementation of certain Directives relating to the environment, repealed by Directive 2000/60/EC with effect from 22.12.2007

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• Regulation No. 12 of 18 June 2002 on the Quality Requirements for Surface Water Intended for Drinking Water Abstraction and Household Supply

Directive 2006/44/EC of the European Parliament and of the Council of 6 September 2006 on the quality of fresh waters needing protection or improvement in order to support fish life (codified version) and Directive 2006/113/EC of the European parliament and of the Council of 12 December 2006 on the quality required of shellfish waters (codified version)

• Regulation No. 4 of 20 October 2000 on the quality of waters supporting fish and shellfish organisms' life (State Gazette No. 88/27.10.2000)

Directive 91/271/EEC concerning urban waste-water treatment, amended by Directive 98/15/EC with respect to certain requirements established in Annex I thereof (Text with EEA relevance)

• Law on water (Prom. SG. 67/27 Jul 1999, corr. SG. 66/15 Aug 2006, amend. SG. 105/22 Dec 2006, amend. SG. 108/29 Dec 2006, amend. SG. 22/13 Mar 2007, amend. SG. 59/20 Jul 2007)

• Regulation No. 6 of 9 November 2000 on the Limit Values for Admissible Contents of Dangerous and Harmful Substances in the Waste Water Discharged in the Water Bodies Promulgated (State Gazette No. 97/28.11.2000)

• Regulation No. 7 on the Terms and Procedure for Discharge of Industrial Waste Waters into Settlement Sewerage Systems Promulgated (State Gazette No. 98/1.12.2000)

• Regulation No. 8 of 25 January 2001 on the quality of coastal marine waters (State Gazette No. 10/2.02.2001)

• Regulation No. 10 on Issuing Permits for Waste Water Discharge into Water Bodies and Setting Individual Emission Limit Values for Point Sources of Pollution (State Gazette No.66/27.07.2001, effective 27.07.2001)

• Regulation on the order and the way of recovery of sludge from waste water treatment through its use in the agriculture” (State Gazette No. 112/23.12.2004г.)

Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources

• Regulation № 2 of 13 September 2007 on the Protection of Waters against Pollution Caused by Nitrates from Agricultural Sources (State Gazette No 27/11.08.2008)

Directive 80/68/EEC on the protection of groundwater against pollution caused by certain dangerous substances, amended by Directive 91/692/EEC 31980L0068 and Directive 2006/118/EC of the European parliament and of the Council of 12 December 2006 on the protection of groundwater against pollution and deterioration

• Regulation No. 1 of 7 July 2000 on the Exploration, Use and Protection of Groundwater (State Gazette 87/30.10.2007)

Directive 2006/11/EC of the European Parliament and of the Council of 15 February 2006 on pollution caused by certain dangerous substances discharged into the aquatic environment of the Community

• Regulation No. 6 of 9 November 2000 on the Limit Values for Admissible Contents of Dangerous and Harmful Substances in the Waste Water Discharged in the Water Bodies Promulgated (State Gazette No. 97/28.11.2000)

• Regulation No. 7 on the Terms and Procedure for Discharge of Industrial Waste Waters into Settlement Sewerage Systems Promulgated (State Gazette No. 98/1.12.2000)

Directive 2007/60/EC of the European Parliament and of the Council of 23 October 2007 on the assessment and management of flood risks.

• Not transposed yet A comprehensive list with national legislation in the water sector is presented in Annex 7 of the report.

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1.2.4 Authorities and responsibilities The water sector in Bulgaria is governed by the MoEW. Other Ministries also have some responsibilities as the Ministry of Agriculture and Food (MoAF), Ministry of Regional Development and Public Works (MRDPW), Ministry of Health (MH), and Ministry of Emergency Situations (MES). The MoEW is responsible for the overall water management at national level and implementation of water policy. Within Ministry’s responsibility is:

• Drafting national legislation in the area of water protection and use;

• Development of national water policy and national programmes;

• Development of National Water Plan;

• Approval of River Basin Management Plans (RBMP);

• Development of national policy for bilateral and multilateral cooperation in water management;

• Issue concessions/permits on water use in specific cases;

• Carrying out monitoring of surface and groundwater networks;

• Providing information;

Following the principle of river basin management in the country stipulated in the Water Act, four river basin management districts (RBMD) have been established in the country:

· Danube River Basin District with headquarters in the town of Pleven; · Black Sea River Basin District with headquarters in the city of Varna; · East Aegean Sea River Basin District with headquarters in the city of Plovdiv, and · West Aegean Sea River Basin District with headquarters in the town of Blagoevgrad.

The RBMD’s are subordinated to the MoEW and responsible for implementation of water policy at regional level and implementation the provisions of the WFD, including the development and implementation of the River Basin Management Plans. The RBMD are responsible for water management of the surface and groundwater that are national/state property including all facilities used for this purpose. They control all activities that would affect the natural state of the water bodies as water withdraws extraction of inert materials of the river beds, and the maintenance of the ecological runoff in the rivers. The directorates are in charge for monitoring of the quality and quantity of the surface and groundwater. They issue water use permits (including permits for discharge of waste water into water bodies) and maintain the water use registers. They are in charge for delineation of the sanitary protection zones of the water bodies. Together with the Civil Protection Services the RDBM are responsible for early warning in case of disasters and accidents. The River Basin Councils are public consultative bodies to the RBMDs which include representatives of various stakeholders as local and district government, non-governmental organizations (NGOs), research and education bodies, professional organizations. They were established in 2003 in line with the provisions of Water Act and assist the River Basin Directorates in their operational activities through ensuring effective dialogue and public participation in the decision-making processes. Executive Environmental Agency (EEA) – Implements the monitoring of the water quality and quantity and thought its laboratories analyses water samples. It is responsible for issuing permits with regard to integrated pollution prevention and control for activities that might affect the environment. The 15

2 Regional Inspectorates of Environment and Water are subordinate to the Ministry of Environment and

Water. They implement the environment protection policy at the regional level and support the RBMD in their activities thus ensuring effective policy implementation. The MoAF is responsible for irrigation and drainage activities including flood control and flood protection measures. In these activities the Ministry is supported by the Executive Agency for Hidroamelioration. The Agency has regional branches in Vidin, Pleven, Targovishte, Varna, Sofia, Plovdiv, Stara Zagora and Sliven. The MRDPW implements the state policy in the area of water supply and sewerage. It controls the activities related to construction, reconstruction exploitation of public water supply and sewerage.

2 Located in Blagoevgrad, Burgas, Varna, Veliko Tarnovo, Vratza, Montana, Pazardjik, Pleven, Plovdiv, Ruse, Solian,

Sofia, Stara Zagora, Haskovo and Shumen.

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The Ministry of Economy and Energy is responsible for hydro-energy systems and facilities; The MH trough its Regional Inspectorates for Preservation of and Control on Public Heath (RIPCPH) –exercise monitoring and control on the quality of surface water intended for drinking and household use, as well as of bathing water. The MES is responsible for civil protection and protection of population in the event of disasters, including floods. It carries out a policy of prevention, gaining control of and overcoming the consequences of disasters and accidents. The Sate Commission for Energy and Water Regulation (SCERW) acts as regulator. The Commission controls the price of the water services offered by the water companies by approval of their business plans. It also:

• Regulates the quality of the services provided by the water companies

• Approves the general conditions of the contracts for provision of water services to the clients

• Executes control and can impose sanctions

• Maintains a register of the water services provided Municipal administrations are responsible for the water bodies that are municipal property or under municipal governance – that could be small dams owned by municipality or rented to private proprietors for fish breeding or other purposes. The municipal administrations are also responsible for ensuring flood protection within the boundaries of the municipality – including maintenance of the facilities and protective dykes and cleaning of the river beds. Many municipalities own water supply and sewerage facilities of the respective settlements. Water supply and sewerage systems are operated by water companies – state or municipal or with shared ownership (51% state and 49%Municipal). In Sofia city water supply and sewerage since October 2000 is operated by the concessionaire “Sofiska Voda” composed by Sofia municipality (25% of the shares) and United Utilities/European Bank for Reconstruction and Development (EBRD) (75% of the shares) according a 25 years concession contract. Since 2004 Panagurishte water supply and sewerage is operated by concessionaire “Water Supply and Sewerage – P” – 35 year concession contract.

1.2.5 Overview of latest policy documents and national development plans

1.2.5.1 Surface water and groundwater quality including management of river basins

The latest policy document is the National Strategy for Development and Management of the Water Sector up to 2015. The strategy was developed in 2004 and to a great extent reflects the provisions of the WFD and the EU policy lines and principles in the water sector. Achievement of good water quality is the main priority of the River Basin Management Planes currently developed by the four RBMD according to the provisions of the WFD. Priority in water quality protection efforts is given to transboundary water courses and their respective basins, particularly in basins subject to serious anthropogenic pressure e.g. Iskar, Yantra, Maritsa, Struma River Basins etc. and the Black Sea. Such basins or parts of them are designated as “sensitive areas” which entails stricter requirements for waste water discharge.

1.2.5.2 Flood risk management (including adherence to EU Flood directive)

There is no national policy document in this area. At local level, however, municipal plans for flood protection have been prepared for a number of municipalities especially those that were affected by the 2005 and 2006 floods.

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1.2.5.3 Coastal protection and quality of coastal waters

There is no national policy document for coastal protection and quality of costal waters. The quality of costal waters is regulated by Regulation No. 8 of 25 January 2001 on the quality of coastal marine waters (State Gazette No. 10/2.02.2001) and by Regulation No. 11 of 25 February 2002 on the quality of bathing water (State Gazette No.25/08.03.2002). Regulation No. 4 of 20 October 2000 on the quality of waters supporting fish and shellfish organisms' life (State Gazette No. 88/27.10.2000) is also related to coastal waters protection. Due to the high pressure in the last years on the Black Sea Coast Environment a Law on Black Sea Coastal Area Development (SG 67, 29 July 2008) was adopted which regulates territorial development of the Bulgarian Black Sea Coast, economic activities and tourism development and environment (water) protection. The Coastal area was subdivided into zones “A” and “B”. The law prescribes activities that can and can not be implemented in the two zones with zone “A” being more strictly regulated in term of development and environment protection. The coastal protection and quality of coastal waters is expected to be addressed in the River Basin Management Plan of the Black Sea RBMD.

1.2.5.4 Water management, municipal and rural wastewater treatment

Bulgaria negotiated and agreed with the EU transition periods for compliance with Directive 91/271/EC (waste water treatment from settlements) – 2011 (compliance by 31 December 2010) for construction of WWTP in settlements with population above 10 000 population equivalent (PE) and 2015 (compliance by 31 December 2014) for construction of WWTP for settlements between 2000 and 10 000 PE. Bulgaria has declared all water resources on its entire territory as being sensitive zones except Mesta River with its river valley and Dobrudza’s rivers and gullies. For agglomerations with PE above 10 000, which discharge in sensitive zones, elimination of nitrogen and phosphorus is required. The Government has developed National Programme for Priority construction of WWTP (1999) in all settlements above 10 000 PE. The Programme outlines the main investment priorities – settlements, measures and funding sources. There are 55 settlements above 10 000 PE and 283 settlements with PE between 2000 and 10 000 where WWTP were planned to be constructed. In 2003 a Programme for implementation of EU directive 91/271/EC for treatment of municipal waste water was developed. The programme sets up various measures that need to be undertaken in order to comply with the provisions of the directive by the agreed deadlines. The measures include legislative amendments, administrative provisions (institution strengthening) and identification of financial costs. It has been determined that 430 agglomerations (settlements or group of settlements, resorts, country sites, districts of big cities) require the construction of entire sewerage infrastructure, completion or reconstruction of the existing sewerage networks and WWTP. The total investment costs of the programme was estimated to 4 337 million BGN. So far funding for implementation of the programme was provided mainly through ISPA and PHARE financial instrument and from the state budget.

1.2.5.5 Drinking water

About 98% of the population in Bulgaria is connected to water supply. The main problems in the area are related to the outdated facilities and water supply network which reduce effectiveness of the supply. In some cases percentage of the lost water in the supply system (leakages) is very high (50%-60%). In the summer many settlements which are supplied by ruining water sources suffer from irregular water supply. According to national survey this accounts to about 10 to 25% of the total population. The above issues have been addressed in the National Strategy for Development and Management of the Water Sector up to 2015 (2004). There is also a Strategy for Management and Development of Water Supply and Sewerage in Bulgaria (2004). This Strategy outlines various measures up to 2015 – including development of methodologies for estimation of water losses, development of business plans of water supply and sewerage companies and in long-term perspective - development of hydraulic models of the water supply

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and sewerage systems, construction of WWTP, reconstruction of water supply and sewerage networks and facilities. Water supply and sanitation in the rural areas is addressed in the Rural Development Programme for Bulgaria 2007-2013 which implementation will be funded by the European Rural Development Fund. Construction of water supply and sewerage systems will be funded in rural settlements with up to 2000 PE – these account to 231 rural settlements in Bulgaria.

1.2.5.6 Cross-border and international partnerships

Bulgaria is party to a number of conventions in the area of environment. Those related to the water sectors are:

• Convention on the Environmental Impact Assessment in a Transboundary Context/Protocol on Strategic Environmental Assessment - www.unece.org

• Convention on the Transboundary Effects of Industrial Accidents/Protocol on Civil Liability and Compensation for Damage Caused by the Transboundary Effects of Industrial Accidents on Transboundary Waters - www.unece.org

• Convention on the Protection and Use of Transboundary Watercourses and International Lakes/Protocol on Water and Health/Protocol on Civil Liability and Compensation for Damage Caused by the Transboundary Effects of Industrial Accidents on Transboundary Waters - www.unece.org

• Convention on Cooperation for the Protection and Sustainable Use of the Danube River - www.icpdr.org

• Convention on the Protection of the Black Sea against Pollution/The Black Sea Biodiversity and Landscape Conservation Protocol - www.blacksea-commission.org

• Convention on Wetlands of International Importance especially as Waterfowl Habitat - www.ramsar.org

• United Nations Convention to Combat Desertification in Countries Experiencing Serious Drought and/or Desertification, Particularly in Africa - www.unccd.int

In addition in the area of water Bulgaria is party to bilateral agreements with its neighbors Greece and Romania. These are:

1. With Greece - Agreement between the Government of the Republic of Bulgaria and the Government of the Hellenic Republic on Use of the Waters of Mesta River, signed on 22 December 1995, in force since 19 September 1996, valid within a period of 35 years.

2. With Romania - Agreement between the Ministry of Environment and Water of the Republic of Bulgaria and the Ministry of Environment and Water Management of Romania on Cooperation in the Field of Water Management, signed on 12 November 2004, in force since 15 March 2005, no term.

The agreement with Greece covers both quantitative and qualitative issues. According to it the two countries are committed to undertake all necessary measures for the balance of the aquatic ecosystem of Nestos / Mesta River. The main point of the agreement is that a fixed percentage (29%) of the waters of the River generated on the Bulgarian territory –according to the average multi-annual flows - has been set as users’ rights of Greece. The Agreement provides for the establishment of a Permanent Joint Hydro-economy Committee with the task to monitor and control the implementation of the agreement. The agreement with Romania is more general. It regulates cooperation between the two countries for the use and protection of water resources by means of joint efforts – coordination of activities, exchange of data and information, implementation of joint programmes and measures, exchange and training of experts. For implementation of the agreement a Joint Commission was established. The agreement was signed for a period of 5 years and is automatically renewed if not terminated by one of the countries.

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2 Market insight

2.1 Water Supply & Sewage

2.1.1 Applicable regulations, standards, government policies

Law for Regulation of Water Supply and Sewerage Services (SG, 18, 25.02.2005). The Act establishes the legal basis for the regulation of prices, accessibility and quality of water supply and sewerage services provided by the water supply and sewerage companies, which operate the facilities. It defines the drinking water as a basic necessity of life and the activities for water-supply and sewerage services as activities of public interest. The Law is expected to be amended to provide clarity and regulation on the ownership of the facilities. The unclear ownership of the facilities (municipal, state, water operators) creates problems with the operation and management of the assets. The legislation also introduces economic instruments, which regulate and guide the behavior of the water users and the condition of the water bodies. The following economic instruments - consumer fees, fees for use of resources, concessions for natural resources, sanctions and market mechanisms ensuring investment and operational costs for achieving and maintaining the environmental standards - are applied. Regulations:

• Regulation No. 9 of 16 March 2001 on the Quality of Water Intended for Human Consumption (State Gazette No. 30 of 28 May 2001). The regulation sets the national standards of the water quality for human consumption.

• Regulation No. 12 of 18 June 2002 on the Quality Requirements for Surface Water Intended for Drinking Water Abstraction and Household Supply (SG 63/2002). The Regulation sets up the quality requirements that surface fresh water must meet if intended to be used for drinking water abstraction and household supply, as well as to its categorization and the measurement, analysis and sampling conditions.

• Regulation for the prices of the water supply and sewerage services (SG 32/18.04.2006). The regulation determines the methods for regulation of the prices of water supply and sewerage services, the rules of water pricing and amendment of the prices as well as approval of the prices by the regulating body.

• Regulation for the survey, design and exploitation of Sanitary Protection Zones (SG 88 of 27 .10 2000)

2.1.2 Infrastructure status and applicable technologies

Most of the settlements in Bulgaria are connected to water supply systems (84,6% - National Strategy for Development and Management of the Water Sector up to 2015). Thus 98,6% of the population has connection to centralized water supply. Table 14: BG Water Sources

Surface running water 7% (about 80 000 000 m3)

Underground water 48% (about 543 500 000 m3)

Surface still water (dams) 45% (about 517 500 000 m3) Source: National Strategy for Development and Management of the Water Sector up to 2015

The water supply network is old and in many areas there are persisting problems with leakages. According to surveys the average percentage of lost water is very high - between 50-60%. Majority of the pipelines are asbestos cement (73%) followed by steal pipes (14%), reinforced concrete pipes (8%) cast iron pipes (3%) and PVC pipes (2%). Water supply infrastructure includes about 3560 pumping stations and 42 Water Supply Treatment Plants. The treated drinking water is about 42% of the total volume of supplied water.

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There is a high need of investment in improving the water supply network – reconstruction and replacement of pipelines,

construction of new networks and related facilities and infrastructure. Introduction of water saving techniques and

technologies and investment in improvement of water management, including detection and dealing with leakages is also

a high priority.

2.1.3 Specifics in urban and rural areas Urban areas are 100% connected to water supply systems, while the rural areas about 80%. In rural areas the water supplied is not treated. In some areas there are shortages of water in the summer and some settlements suffer from irregular water supply.

2.1.4 Water companies-operational, technical and financial management

There are 49 water companies in Bulgaria, which provide both water supply and sewerage services. 13 water companies are 100% owned by the State, 16 water companies - 51% owned by the State and 49% by the respective municipalities and 20 water companies are fully owned by municipalities. Sofia city and Panagiurishte municipality are served by concessionaires. Twenty nine of the water companies are regionally based, delivering services to a specific district center and several municipalities. The rest of the companies are providing services in a single municipal area. Many of the water companies serve relatively small number of citizens which hampers generation of sufficient revenue to enable investments in rehabilitation of facilities. The prices charged by the water companies are subject to approval by the regulator SCEWR on the basis of the developed business plans. The basic principle for forming the price of the water supply and sewage services is the establishment of price levels that will offer the opportunity for a full coverage of operational costs. Profitability of up to 12% is calculated to the costs. For some companies the percentage of profitability is different for the households and for the legal entities. The price of water supply and sewerage services is determined on the basis of the costs estimated for 1 m

3 of water. They are calculated as a ratio between the

overall costs and the forecasted volume of water to be sold for the respective period. Due to the various parameters used in determining the tariffs, each water supply and sewerage company applies different tariffs for delivering water supply and sewerage services. The waste water fee is combined with the drinking water bill and collected by the water supply and sewerage companies. At the moment, the water price only covers the operational costs while all the investments are subsidized by the State Budget. According to the Strategy for Development of Water Supply and sewerage sector, should offer a price including full cost recovery of operational expenses and partial recovery of capital investments. The Business plans are required by the Water Supply and Sewerage Law. They should cover services, rehabilitation, investment and social programmes as well as technical and economic parts. The technical part of the business plan should contain a programme for achievement of the annual goals with respect to the quality of services including measures to decrease of water losses. The economic part should contain analysis of the demand and of the expected costs related to the provision of the services as well as investment programme with funding sources. The social programme should contain an analysis of the social effect of the proposed price of water services. The municipalities should prepare statements on the proposed business plans prior to their submission to the regulator.

2.2 Water quality

2.2.1 National monitoring system for water quality (observation, operational, investigation)

The National Water Monitoring System (NWMS) consists of the national networks for monitoring of rainfall and surface water (253 monitoring and measurement stations), for groundwater monitoring (212 hydrogeological stations) and seawater monitoring (23 coastal sea stations), and for biological monitoring (1157 stations). A

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total of 111 stations from surface water monitoring network, as well as 73 stations from groundwater monitoring network are included in the European monitoring network (EUROWATERNET) of the European Environmental Agency. MoEW and the subordinate Environment Protection Agency are responsible for operating the national water quality monitoring system. The water monitoring system has been reorganized according to the provisions of the WFD. The 4 RBMD developed water monitoring programmes. The monitoring includes all water body types – running water, still water, coastal water and groundwater. The observational monitoring includes 259 monitoring sites on the surface water (running water, still water, coastal water) in the country. It includes biological, physical, chemical (including priority substances and specific polluters) and hydro-morphological parameters. It is planned that the observational monitoring will be implemented once in the period 2007-2009 and once in the period of the implementation of the first river basin management plan. Operational monitoring covers 263 surface water bodies, which have been classified as being at risk to achieving water quality standards according to annex II of the WFD. The operational monitoring includes also water bodies in which are being discharged priority substances. The parameters monitored include: biological, physical and chemical quality parameters priority substances and specific polluters and hydro-morphological parameters. The waters in the protected areas (surface (providing more that 100 m

3 per day) and groundwater used for

water supply as well as areas protected according to the Birds and Habitat directives) are subject of additional monitoring. The number of the monitoring samples per year is determined according to the number of the population. Water supply sources to population above 30 000 are monitored every month and water bodies supplying water to population less than 10 000 – 4 times per year. Ground water monitoring in Bulgaria has been organized in conformity with European requirements for measuring the chemical and quantity status of ground water (FDW 2000/60/ЕС). There are monitoring networks for observational, operational monitoring and quantitative monitoring. Monitoring plans for monitoring of surface and groundwater have been prepared. There are accredited laboratories which analyze the water samples. The quality of the drinking water is monitored by the MoH through its inspectorates - RIPCPH. The water quality standards are stated in the national legislation - Regulation No. 9 of 16 March 2001 on the Quality of Water Intended for Human Consumption (State Gazette No. 30 of 28 May 2001). As a whole, the water quality in the country is good except in specific regions which are facing problems of a local character. The basic pollutants of the surface water are the domestic water from the urban sewerage system in the big settlements and the industrial waste water which is discharged untreated into the rivers. The basic pollutant of underground water is nitrate originating from agriculture. The national legislation sets strict water quality standards compliance with which often necessitates advanced technological solutions. On the other hand economic incentives arising from resource saving, recycling etc. combined with financial mechanism (charges for water use and fines for excessive pollution) provide powerful motivation for the introduction of environmentally sound technologies. It is a general requirement that industry operators prove their compliance with the environmental legislation and the implementation of Best Available Techniques (BAT) by submitting Compliance Schedule Plans (CSPs). The CSPs are reviewed and approved by the permitting authority (MoEW or EEA) during the permitting procedure. The final deadline for compliance is also specified – it can be up to 31.12.2011 for some installations. The introduction of modern technologies and BAT is an ongoing process and a major filed for research and investment.

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2.2.2 Certification (including potential for private water certification)

Activities of the water operators must comply with the national standards for the sector set by the Bulgarian Institute for Standardization. The Bulgarian Institute for Standardization according to the Law on National Standardization (SG 88, 5 November 2005) implements the national standardization (BDS – Bulgarian State Standard). The provision of water services in Bulgaria according to the current legislation (Water Law, Water Supply and Sewerage Law) is regulated by the SCEWR. No specific certification of the operators is needed. However, the regulator approves the operators’ business plans and prices, charged to the consumers and executes control over the quality of the services provided including water quality. The provision of the services of the Irrigation System Company is regulated by the MAF. Quality management certification ISO 9001:2000 and environment management certification ISO 14001 is not obligatory for the water operators. These certificates however are highly required for the companies that bottle mineral water. In this case also certificates issued by Bulgarian laboratories to the Ministry of Health (RIPCPH) and/or international institutions are desirable. Certification is available through many Bulgarian or foreign companies. All laboratories in Bulgaria state or private (including those implementing analyses on water quality) must be accredited to implement activities. Accreditation of laboratories as well as of the companies that can implement certification and issue certificates is done by the Bulgarian Accreditation Service according to the Law for Accreditation Implemented by the Bulgarian Accreditation Service, in power since 14.01.2006 (SG 100, 13 December 2005). In general certification and accreditation of companies operating in the water sector is not recurred. However, implementing activities in Bulgaria obliges the companies to perform to the national standards. In some tender procedures the contractors my set specific requirements with regard to certification.

2.2.3 Research and Development

Research activities related to water are undertaken by scientific institutes within the Bulgarian Academy of Sciences, e.g. the National Institute of Hydrology and Meteorology, Institute of Water Problems, Institute of Ecology, other scientific organizations and universities. Such activities are part of the regular research programme of the respective scientific institution or result from specific assignments by government agencies, public and private entities or bilateral and international projects. The National Fund “Science Research” supports national priority research. However, the available funds for research are in general insufficient. In addition although many of the research institutions underwent institutional and organizational restructuring, the measures undertaken failed to modernize the research system sufficiently. The old clumsy system with inflated stuff numbers fully dependent of the State research is yet to be replaced by modern, viable, market oriented, sustainable and efficient research institutes implementing high quality research. The institutes suffer from the lack of new young researches and in general continue to be managed in an old fashioned manner which limits the effectiveness of the research and the support these institutions are able to provide to the policy makers and industry. The business in Bulgaria is not yet used to benefit from this type of services and in general provides little or no funds at all for research.

2.3 Waste water treatment in urban and rural areas including sanitation

The level of waste water treatment in the country is relatively low. According to 2001 data about 70,2 of the urban areas were connected to sewerage systems, while only 2,1% of the rural areas had sewerage systems. As to 2001 there were 61 Waste Water Treatment Plants (WWTP) for municipal waste water treatment, of which 11 are only for mechanical treatment and 50 - for mechanical and biological treatment. They served 63

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settlements which in total accounted to 35.7% of the country population. There were no WWTP in some of the big cities as Blagoevgrad, Vidin, Ruse, Haskovo, Yambol. The construction of WWTP become a priority in many government strategies and with the support of EU pre accession funds (ISPA, CBC) and by the Bulgarian government construction of many WWTP has started, some of which were already completed (Blagoevgrad, Ruse, Razlog, Haskovo (in construction)). Municipal wastewater treatment plants require considerable investment for a short period of time therefore the construction of WWTP remains a priority as well as construction and rehabilitation of sewerage systems. About 20% of the constructed sewerage systems need urgent rehabilitation. About 40 of the existing and operational WWTP need reconstruction and modernization. Bulgaria needs to install 369 new WWTPs together with the corresponding new sewer networks to cover the agglomerations in accordance with the Urban Waste Water Treatment Directive Bulgaria needs to build 16.000 km of new sewers to connect 2,4 million people.

2.4 Market innovation and (compliance with) regulation in industries with a high water usage

Industry operators must meet the standards for discharging waste water into the recipient water bodies. The application of Integrated Pollution Prevention and Control (IPPC) Directive requires permitting and compliance with the established pollution discharge levels. Bulgaria has negotiated transition period for implementation of the directive by the end of 2011. The permitting process for the operational installations was completed by end of 2007 with transition period for compliance up to the end of 2011 for some installations. The technical measures needed to achieve compliance include: waste water treatment installations, reconstruction of the collectors and pipe systems, optimization of the technological processes, water usage optimization, installation of facilities for retention of oils and oil products. The individual emission limits for the industry operators are defined using “combined approach”: emission standards and quality objectives for the receiving water bodies. The permits for water body use (including discharging in the water body) are issued by the River Basin Directorates, and the IPPC permits by the MoEW and EPA (RIEW). Additional measure to improve water quality is the permit regime for wastewater discharges (required by the WFD).WWTP operating in sensitive areas must meet stricter requirements for the content of nitrogen and phosphorous in the discharged effluents. As sensitive area has been defined almost entire territory of Bulgaria with exception of Mesta River. Environment Impact Assessment (EIA) is required for new developments. On the basis of the EIA reports decisions are taken for the implementation of the planed activities and measures are prescribed for reduction of the harmful effect on the environment from the developments. A small share of the enterprises in the food processing industry is certified under the quality system ISO 9001. The investments related to environment protection are still rare. There are no enterprises from the food processing industry that have introduced integrated system for managing environment protection related aspects of the business. Investments are required to renovate the wastewater treatment facilities of the enterprises and the cooling equipment in the collection centers. Irrigation is one of the biggest water consumers – up to 30% of the water consumed in the country. Good network of irrigation systems and facilities was constructed in the past. However, with the changes in the agricultural sector and restitution of the land to the former owners the level of the irrigated land dropped significantly. Many facilities have been damaged and are not is use any more. The development of the sector highly depends on the development and changes in the agricultural sector. There is a need for rehabilitation and modernization of the facilities and installation of modern measuring devisees. The market (local and mainly international) provides access to many technologies for reduction of pollution by industry operations to meet the discharging standards and for more efficient water use. For implementation of IPPC Directive the MoEW developed a Programme for Implementation of IPPC Directive (2003) and Strategic Investment Plan. About 600 million BGN (300 million EUR) were the estimated financial resources to be invested by the industry operators to achieve compliance. The application of the BAT

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was supported by the Methodology for Application of the BAT developed by the MoEW. All industry operators must ensure compliance by the end of 2011. Implementation of EU directive for treatment of municipal waste water is supported by the National Programme for Priority construction of WWTP (1999) in settlements above 10 000 PE and by the Programme for implementation of EU directive 91/271/EC (2003). The agreed transition period for implementation of the directive is 31 December 2010 for construction of WWTP in settlements with population above 10 000 PE and 31 December 2014 for construction of WWTP for settlements between 2000 and 10 000 PE.

2.5 River Basin Management

2.5.1 National Management Plans including implementation stages

Four River Basin Management Plans are currently under preparation by the RBMD. They are expected to be ready by the end of 2009 with the first set of measures starting to apply in 2012. Bulgaria has not requested any transition periods for complying with the requirements of the WFD with regards to this aspect. All 4 RBMD developed working programmes for preparation of the River Basin Management Plans which indicated the measures/ actions to be undertaken, deadlines and who will undertake the actions – i.d. whether the action will be implemented by own resources or will be subcontracted to external consultants. These programmes can be found on the web-sites of the respective RBMD. The draft river basin management plans are expected to be ready by the end of 2008 and in 2009 the public consultations and revisions of the plans will be implemented. It is possible consultancy services to be used for revision of the plans. There are funds available for this under the Operational Programme (OP) “Environment”. So far the funding with regard to the preparation of the management plans was provided by the own budget (State budget) or donor projects (mainly bilateral or EU pre accession assistance). The activities planned to be subcontracted (already subcontracted) to external consultants include:

• Determination of the background concentrations of chemical elements in the groundwater

• Development of water usage balances

• Determination of the maximum ecological potential for heavy modified water bodies

• Economic analyses of water uses

• Development of programmes of measures for the reduction of impacts

• Elaboration of an early warning system for flood protection

• Assessment of the economic effectiveness, social affordability and the impact of the developed measures

• Development of methodology for economic analysis of the programme of measures

• Analysis of the investments

2.5.2 Surface waters categories and risk bodies of surface water

According to the WFD typology surface water categories in Bulgaria comprise: rivers, lakes, coastal water, heavily modified water bodies and artificial water bodies. No transitional water bodies have been identified. The requirements of system B from Annex II of the WDF are applied for all surface water from the category “river” and “lake”. The initial risk assessment procedure included the following pressure criteria with respective thresholds per specific pollutants:

• point sources - discharge of untreated municipal waste water, discharge of treated municipal waste water, industrial direct discharge, agricultural point sources

• non-point sources – urban, industrial, agricultural

• water use

• morphological changes

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The surface water bodies have been classified into the following categories:

Table 15: BG Categories of Surface Water Bodies water bodies N River Basin

District not at risk number (percentage)

at risk number (percentage)

possibly at risk number (percentage)

1 Danube 51 (32%) 49 (30%) 61 (38%)

2 Black Sea 26 (16%) 26 (16%) 106 (67%)

3 East Aegean 107 (35%) 54(18%) 145 (47%)

4 West Aegean 79 (63%) 23 (18%) 24 (19%) Source: MoEW, National Report on Implementation of Art. 8 of the WFD, 2007

• Water bodies at risk – without any need of further characterization or additional monitoring data, in evidence that the WFD environmental objectives will not be met;

• Water bodies, possibly at risk – with possibility of not meeting the WFD environmental objectives, but for the insufficiency of data, the final assessment can not be done with enough certainty. For their final assessment additional monitoring data are necessary.

• Water bodies not at risk – which clearly, without necessity of further characterization or monitoring data, indicate meeting the environmental objectives set in the WFD.

For the water bodies at risk measures are expected to be prescribed to decrease the pollution pressure. For the water bodies possible at risk additional monitoring data/research/modeling is needed in order to determine the risk. In case there is a risk for not meeting the objectives measures for decreasing the pollution will be elaborated. According to the assessment of the RBMDs the main needs/measures include the following:

• Construction of WWTP and sewerage systems

• Rehabilitation and upgrading of WWTP

• Treatment of waste water from farms

• Construction/reconstructed of landfills to meet the requirements

• Compliance with the best agricultural practices to reduce pressure from the usage of fertilizers and pesticides.

• New harbor facilities for catching and treatment of oil spills

• Reduction of soil erosion

• Development of new sources for water supply

• Reconstruction of the water supply network and facilities

• Rehabilitation of the irrigation systems and facilities

• Flood protection measures (reconstruction and maintenance of the dykes, cleaning of river beds)

• Development of early warning flood protection systems

• Forestation

2.5.3 Flood and drought prevention and monitoring systems (early warning systems)

Flood prevention is responsibility of the MoEW and as part of overall accidents management and prevention - of the MES which is also supported by municipal administrations. The main goals of the MES include:

• Establishment of a Forecasting and Early Warning System, including Space Monitoring Center;

• Establishment of modern fully equipped information and communication systems in compliance with contemporary EU requirements;

• Provision of the necessary supply component to the special equipment for search and rescue operations;

• Improvement of the National, Regional and Municipality plans for protection of the population;

• Risk assessment and development of mechanisms for critical infrastructure rehabilitation and renovation;

• Establishment of a system of volunteers;

• Development of standards, methodologies, guidelines, instructions and others for every step of the prevention, preparedness, management, reaction and recovery from disasters and accidents aiming at different target groups;

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• Public awareness campaigns and elaboration of a national training program for different target groups.

The National Institute of Metrology and Hydrology (NIMH) supported by its 4 regional branches is responsible for development of hydro-meteorological diagnostics and prognosis including in the case of floods. However, the monitoring system is not equipped with automatic telemetric devises. The NIMH is able to provide reliable short-term and mid-term forecasts based on meteorological data and modeling (DWD и Meteo France) as well as Eumetsat data. Weather forecast and quantitative forecasts are published daily on www.weather.bg and www.hydro.bg. However, unified early warning system for flood prevention is missing. This is currently being developed for some river basins. Bulgaria was safe from severe floods in the recent years until 2005. The floods in the summer of 2005 and afterwards in 2006 opened discussions and triggered actions for flood protection measures and programs. The most urgent measures include cleaning of river beds and rehabilitation of dykes as well as delineation of flood planes and flooded areas, estimation of flood risk and development of early warming systems. Bulgaria also needs to study and assess the existing infrastructure in order to evaluate the gap between the available and the necessary facilities. These actions should be part and based on a National Flood Prevention Strategy which is currently missing. A program concerning the necessary measures in the circumstances of trend of drought was adopted in 1999. It was developed in response to several successive dry years and covers a period up to 2010. It prescribes measures for conservation of water resources and construction of new dams in order to secure sufficient water for domestic water supply and irrigation. At the time of development of the program the financial resources were planned to be provided by the national budget, concessions and by international funding organizations. Some of the measures are still valid and have been included in OP Environment – as improvement of water supply network and reduction of water losses. Finalization of the construction of currently constructed dams and funding for construction of new dams will be provided by the State budget or through loans. Early warning system for flood prevention is missing. This is currently being developed for some river basins as for the East Aegean River Basin where at the end of 2009 the system should cover the complete River Basin. It is equipped with automatic stations and their numbers are increasing. At the end of the year the first version of a fully automatic flood forecasting early warning and dissemination system will be ready for the biggest part of the East Aegean River Basin (in test phase). In terms of human capacity provision of training is needed and appointment of new staff to operate the system and to be in charge for flood forecasting. A lot of consultancy services supported by EU funding or bilateral projects have been provided up to now to the river basin management authorities and to the MoEW for implementation of the WFD and institutional set up. (The RBMD were established in 2002). The RBMD were equipped with the necessary hardware and software (including Geographic Information Systems) for effective delivery of their services. However, due to management inefficiencies as well as the insufficient number of staff the authorities hardly manage to cope with their responsibilities with regard to preparation of the River basin management plans without external support. The local scientific and research institutions are not able to provide sufficient support as they are not proactive. The consultancy services are tendered by means of the national public procurement and the research institutes are not yet fully competitive on the market - lack marketing and tender preparation skills as in the past most of the assignments were planned and provided directly by the State budget.

2.6 Coastal management and protection

2.6.1 Erosion protection

More than 60% of the country is affected in various degrees by erosion processes. 11.8% of the total territory is seriously affected by erosion. In the costal area two water bodies have been assessed at being at risk due to erosion processes.

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65% of the agricultural lands are at risk of water erosion and 24% are at risk of wind erosion. However the risk of irrigation erosion is currently low as this process takes place commonly in areas under irrigation with slopes above 3 degrees. The majority of these lands have not been irrigated since 1990s. The highest risk of irrigation erosion is where gravitational irrigation is used in furrows. Forests affected by water erosion cover 292 000 ha. The technical state of the majority of the constructed erosion protection facilities is bad. The data shows a permanent trend of soil structure degradation in arable lands. The support to activities, related to the use of agricultural lands in less favored areas, and the adherence to the good agriculture and environmental conditions in these regions will reduce the abandoning of land there, and will lead to a decrease in the process of erosion. These measures are expected to be supported by as part of the implementation of the National Plan for Rural Development 2007-2013. Landslides following flooding cause great damage to infrastructure in certain regions also in the North part of the Black Sea cost. In the period 2000-2005 1 334 landslides were registered in Bulgaria.

2.6.2 Integrated management of coastal areas

The Bulgarian Black Sea costal area experience high pressure form human activities – tourism, fishery and harbor activities. Preservation of the water resources to a great extent depends on the integrated management of all activities which affect waters. The speedy development of tourism resulted in constriction of new hotels, residential areas and tourism facilities. These exert pressure on the water quantity and quality. In same areas the development does not correspond to the available water resources and there is insufficient water supply. In the groundwater of the North Black sea costal area salt water intrusion was observed as result of overexploitation of groundwater recourses. The same applies to the waste water treatment. The available facilities, where existing, can not accommodate the new waste water volumes and there is a need of construction of new WWTP and sewerage systems. Many settlements along the cost still discharge untreated water into the sea. It was assessed that by the industrial fishing about 408 km

2 costal area are affected (Report on the major

problems in water management in the Black Sea Basin, December 2007). Other problems in the costal area are related to eutrophication of the water, landslides, floods, oil spills (at harbors) and erosion. The unregulated development in the last years led to the adoption of a Law on Black Sea Costal Area Development (SG 67, 29 July 2008) which regulates the scope and nature of activities that can and can not be implemented in the two zones defined along the costal area.

2.7 Ground water / soil pollution

Inventory of risk bodies of groundwater Major polluter of groundwater is agriculture. The agricultural census in 2003 indicated that only 528 holdings have safe manure-pile sites and 485 000 have only primitive dunghills; this calls for special measures to help the farmers in establishing the manure storage capacities. Nitrogen pollution of groundwater (mainly along the Danube River and in the Maritza river plain, but also in some spots in the Black Sea Basin) is predominantly a result of intensive fertilizing in the past. Nitrate vulnerable zones have been identified in Order No. RD-795/10.08.2004 of the Minister of Environment and Waters; they cover entirely or partially the territories of 96 municipalities, or 53% of the territory of the country. This is 54.8% of the agricultural land. With the political and economic changes in 1990 the agricultural practices have changed. Currently at country level the gross nutrient balance is negative for the nitrogen (-89.5 kg/ha) and very negative for Potassium and Phosphorus. As a result of unbalanced use of mineral fertilizers in some areas the soil structure is damaged.

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However despite the negative balance for the country there are spots with excess application of fertilizers and manure. These require attention of the responsible authorities (the services to the MAF) for application of the best agricultural practices and reduction of the pressure on water resources from agriculture. There are about 35,500 ha of arable land affected by salinization process in Bulgaria. The major part of these are fields that are presently not cultivated due to decreased soil fertility. The agricultural lands tending to acidification are 4 300 000 ha. The main reason for the processes of degradation is the low technological cropping patterns – unbalanced use of fertilizers and low quantity of organic and mineral fertilizers, reduced number of soil cultivations, inefficient plant protection practices, growing of crops dependant on soil humidity without irrigation, etc. The overgrazing and trampling down of grasslands also leads to soil erosion and the loss of soil fertility. For characterization of groundwater with regards to the significant pressures available data for major point and diffuse (non-point) source and for significant water abstraction from groundwater bodies has been used. In the groundwater of the North Black Sea costal area salt water intrusion was observed as result of overexploitation of groundwater recourses. Groundwater bodies have been classified into the following categories:

Table 16: BG-Ground Water Bodies

water bodies N River Basin District at risk possibly at

risk not at risk possibly not at

risk

1 Danube 21 (44%) 0 (0%) 25 (52%) 2 (4%)

2 Black Sea 3 (7%) 7 (16%) 17 (40%) 16 (37%)

3 East Aegean 5 (10%) 2 (4%) 11 (23%) 30 (63%)

4 West Aegean 0 (0%) 1 (3%) 29 (74%) 9 (23%) Source: MoEW, National Report on Implementation of Art. 8 of the WFD, 2007

• Water bodies at risk – identified without doubt that the bodies are at risk;

• Water bodies, possibly at risk – with great probability not to meet WFD objectives, but due to insufficient data availability, reliable enough final assessment can not be made. Additional monitoring data are needed for their final assessment.

• Water bodies, not at risk – which quite clearly, without need of further characterization or additional monitoring data indicate ability to meet WFD objectives.

• Water bodies, possibly not at risk – the present data shows that the water bodies are not at risk, but additional monitoring is needed

For the water bodies at risk measures are expected to be prescribed to decrease the pollution pressure. For the water bodies possibly at risk and possibly not at risk additional monitoring data/research/modelling is needed in order to determine the risk. In case there is a risk for not meeting the objectives measures for decreeing the pollution will be elaborated. According to the assessment of the RBMDs the main needs/measures include the following:

• Treatment of waste water from farms

• Construction/reconstructed of landfills to meet the requirements

• Compliance with the best agricultural practices to reduce pressure from the usage of fertilizers and pesticides.

Prevention regulations & future strategies The first Bulgarian Programme for restricting and decreasing the pollution by nitrates from agricultural sources in vulnerable zones (the so called in the Nitrates Directive ‘Action Programme’) was approved in October 2006. The Programme will be implemented during the next 4 years. It includes measures for agricultural practices and application and storage of manure and fertilizers which will prevent pollution of soil and water with nitrates.

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The Code of Good Agricultural Practices was adopted in August 2005. The Code provides instructions for the appropriate application of manure and mineral fertilizers (especially on sloping terrains) and their appropriate storage in order to reduce the possibility for contamination of surface and underground waters. The implementation of good agricultural practices is compulsory for the farmers’ holdings, situated in protected sanitary zones for drinking water and in the zones designated as vulnerable zones to nitrate pollution from agriculture. The same obligation exists for farmers, operating near sources of mineral water. For the farmers within the vulnerable zones, the Code will become obligatory through the implementation of the Programme for restricting and decreasing the pollution by nitrates from agricultural sources in vulnerable zones. Rehabilitation measures & implementation There are no specific measures planned for rehabilitation of groundwater quality. With regard to the artificial groundwater recharge in Bulgaria, certain projects were realized in the past, but so far no artificial recharge has been accomplished. There are also no specific policies/measures planned for this. Integrated Water Resources Management Integrated water management is a policy objective and has been outlined in many policy documents and in the national legislation as fundamental principal to be applied in water management. This is expected to be implemented trough the leadership of the MoEW and in cooperation with other governmental bodies, agencies, NGOs and the general public.

Part of the integrated water management is also the trans-boundary integrated water management for which Bulgaria implemented joint projects with Greece (Mesta River) and Romania (Dobrudja groundwater). Bulgaria (Association "Bulgaria Water Partnership) is member of Global Water Partnership Central and Eastern Europe (CEE).

So far a lot of projects have been implemented in the area of integrated water management. The theory and concept is in general well known among the stakeholders. The main needs are related to institutional strengthening and improvement of the coordination between the various institutions, development of a common databases which to be easily accessible by all interested parties and development of efficient monitoring systems. Physical aspects The establishment of the 4 RBMD provides the physical basis for management of all water resources in the respective basins in an intergraded manner. Environmental aspects Integrated water management is part of the overall environmental management and in this respect it is related to pollution decrease/remediation, ecosystem management, biodiversity preservation. This wider aspect of water management provides opportunities for projects (constancy, infrastructure, investment) in the above areas as far as these are related preservation of water quality which would affect environment. Social, economic and institutional aspects The provisions of the FWD transposed into the national legislation provide basis for involvement of all stakeholders in the water resources management. To the RDBM there are consultative bodies composed by representative of the stakeholders in the river basin. This should ensure that their social and economic interests are preserved. The preservation of social interests/rights and application of economic principles in water management is stipulated in the legislation (Water law). It is stated that the water resources are common benefit and every citizen has a right to water and water supply and water services. It is also stipulated that the economic mechanism will be applied in water management in order to ensure sustainability and resource preservation. The main economic principles that should apply are – polluter pays and charges for water services including for the resource and protection of the environment. The roles of the various institutions in the management of the water resources are well established. The role of the scientific research as support in the water management and integrated water management is also acknowledged. A weak point is yet insufficiently developed cooperation mechanisms.

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2.8 Major national and international companies active in the water sector

Most of the biggest international companies active in the entered the Bulgarian market mainly through the opportunities provided by EU funded pre accession programmes Phare and ISPA. Some of them were more successful then others and some as Louis Berger, Biwater, PM established offices in Bulgaria with prospects for future work. Others as Halcrow had a good start but no follow up development. The table below list the biggest international companies that have been active on the market in the last years. Many of Bulgarian companies are successors of the biggest State companies in the water sector as Hydrostroy (construction of dams, hydropower stations), Vodokanal Proekt (water supply and sewerage systems), Agrovodinvest (investments in the irrigation and drainage systems), Vodnio Stroitelstvo (overall water projects). In the resent years they have been in the process of restructuring and privatization. Some managed to get reorganized quickly and less painfully and the others are still undergoing this process. In addition many of the staff have left and work as free-lance consultants for foreign companies or have established their own companies. Some of the most successful newly established private companies are also listed in the table.

Bulgarian International

Agrovodinvest - construction of ware

supply and irrigation systems

Arcadis – (www.arcadis-us.com) services for

waste water treatment projects; drainage and sewerage; industrial waste water; surface and ground water supply; watershed management

Aquapartner (http://www.aquapartner.com) - environment impact assessment / EIA / · water supply and sewerage facilities design and water treatment

Bceom (http://www.bceom.fr) - water planning and management, flood control, management and prevention, irrigation and rural development, waste management, protecting natural resources and climatic change, energy management and developing renewable energies

Ecoproekt (http://www.ecoproject-bg.com/index3.php?cat=11) – waste water treatment

Biwater (www.biwater.co.uk) - engineering & environmental Analysis; optimization of investment and operations; water and waste water treatment; pressure control; flow control

Elnet www.elnetbg.com wastewater

treatment plants for industry, farming, residential

Cowi (http://www.cowi.com) – water quality

monitoring, costal engineering

EnvoTex EOOD (http://envotech.comdc.net) – planning, design, and building of drinkable-water purification systems and wastewater treatment plants

DHI (www.dhigroup.com) urban flood management, surface water quality, environmental impact assessment, integrated water resource management

Eurobion (www.eurobion.com) waste water treatment

Euroconsultants(www.euroconsultants.gr) Greek company active in management consultancy,national/sectoral/regiona/local/cross-border polices, feasibility studies, project management

Hydrogeokomplekt (http://www.hydrogeocomplect.com/) - water supply, irrigation

Grontmij / Carl Bro (http://www.grontmij-carlbro.com) provides consultancy services within all significant areas of water resources, supply technology, wastewater and the aquatic environment

Hydromontaj - pump purifying stations and dam facilities, irrigating, industrial and drinking water facilities, steel constructions

Halcrow (http://www.halcrow.com/) – water management and planning, flood management, water utilities, dams hydropower and irrigation

Hydrostroy (www.hydrostroy.com) - Construction of aquaculture sites, water mains and sewerage systems; engineering

Intergeo Bulgaria www.intergeo-consulting.com, Austrian based, specialized in investigation and remediation technologies and consultancy for soil and groundwater contaminations

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Lemna Ecoinvest Bulgaria - http://www.lemna-ecoinvest.com/ - EIA, waste water treatment

KEC (www.e-kirchner.de) – water management, water supply system

Presta Engineering (www.presta-bg.com) waste water treatment

LDK Consultants (http://www.ldk.gr) - River Basin Management Plan, Water Quality Assessment, Pollution Assessment and Control, Water Demand Management, water models (hydraulics, groundwater, water quality), Drought Management, Water treatment and supply, Desalination technology

Start Engineering (www.starteng.com) - implementation of control microprocessor systems in thermal power plants and water power plants as complete engineering activities

Louis Berger http://louisberger.com/ – waste water treatment, engineering

Turbo engineering (www.vodnipompi.com) - design, supply and construction of drainage, sewage water pumps

MWH (http://www.mwhglobal.com/) -

wastewater treatment plants, soil and groundwater remediation systems, environmental impact reports, wetlands, hydrogeologic evaluations

Vodokanal proekt (www.vkp-ms.com) -

hydro-geological and water services investigations and balances of the water consumption; engineering – geological and hydro-geological reports, feasibility studies, project designs and analyses in the field of water supply, sewerage, water treatment, hydro-technical structures, project designs and analyses in the field of energy efficiency of the water sector, geo-protection

Ramboll (http://www.ramboll.com) – water

resources management, environmental aspects

Vodno Stroitelstvo – construction of irrigation and draining systems, corrections of rivers, dams, dykes, irrigative canals, water- supplying and canalization systems, pumping stations, purifying stations, residential building, banks etc

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3 Overview of funding available for the water sector

3.1 National Funds

The co-financing of the EU funds through the State Budget shall be minimum 20% of the total eligible expenditures. Main funding sources include the state budget, municipal budgets, companies’ own resources. The Enterprise for Management of Environmental Protection Activities (EMEPA) to the MoEW provides the national funding to priority environmental projects.

3.2 Pre-accession European Funds

The European Union through its ISPA Program provided a considerable share of investments in the water sector. However, while many Member States have experienced difficulties with the timely implementation of the Trans-European Network and environment infrastructure investments, Bulgaria is particularly slow. To date only 18% (€156 million of the available funding €879 million) has been absorbed for these projects, which were started under the ISPA pre-accession instrument but are now being finalized under the Cohesion Fund rules. In December 2007 the Commission asked the national authorities to present an Action Plan aimed at speeding up implementation of projects identified as problematic. 58 mil EUR were allocated for Sofia’s water supply and sewage system, but the funding is in danger of being lost due to delays. 144 mil EUR in road infrastructure ISPA funding are temporarily blocked, but are said to be made available again in November 2008.The deadline for the absorption of ISPA funds is 2010. A list of ISPA projects implemented in Bulgaria is provided in Annex 8. Investments and technical assistance in the water sector was also provided trough the Phare program, including Cross Border Cooperation and SAPARD – for the rural areas. The PHARE and Transition Facility programs support Bulgaria to complete institutional reforms and to prepare for the absorption of much larger amounts of assistance under the Structural Funds. The total amount allocated from 2004 to 2007 and remaining under implementation in Bulgaria under the PHARE and Transition Facility programs is around 650 mil EUR. The final deadline for the contracting of PHARE funds is November 2008 and for the Transition Facility is December 2009. The funds are managed by the Bulgarian authorities under the extended decentralized implementation system by four implementing agencies, which were accredited by the European Commission in June 2007. Following the accession to the EU on 1 January 2007 the pre-accession assistance is phasing out. The EU assistance in the coming years will be provided through the structural funds. An overview of the operational program through which funding will be provided in the water sector is presented below. In the summer of 2008 the payments under SAPARD program were suspended following the terminated accreditation of the SAPARD Agency by the EC due to allegations in corruption and mismanagement. Accreditations of two PHARE agencies (in the Ministry of Regional Development and Public Works and in the Ministry of Finance – Central Contracts Financing and Contracting Unit) were also revoked. Measures have been undertaken and the Bulgarian Government is hoping on re-gaining the accreditation. Meanwhile in mid October the SAPARD Agency re-started payments using national funds. The Government stated that the payments under PHARE will also continue with budget funds until the problem with the accreditation is solved.

3.3 Post-accession European Funds

OP “Environment 2007-2013”

The OP Environment will provide funding to the water related projects through 2 axes:

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Axis 1 – Improvement and development of water and waste water infrastructure in settlements over 2000 PE. For this priority are allocated 71.3% of the total financial resources of the OP. The priority shall be funded by the Cohesion Fund. The priority axis aims to provide funding for ensuring compliance with Council Directive 91/271/EEC on urban waste water treatment by December 31, 2010 for all agglomerations with a PE above 10 000 and by 31 December 2014 for agglomerations with PE between 2 000 and 10 000. This requires extension, reconstruction and modernization, as well as construction of new sewerage systems including WWTPs in the settlements. This axis will also provide funding for water related projects in settlements below 2 000 PE which are located within urban agglomeration areas. This is to supplement the Rural Development Programme, which will finance water and wastewater infrastructure projects only in rural municipalities below 2000 PE. Furthermore, the present priority axis will support the implementation of the basin water management approach, in view of preserving and improving the water environment in the country, as well as sustainable water use and protection measures in the cases of natural disasters. Integrated river basin management programmes, including the development of the management plans foreseen under the WFD, will also be eligible for financial assistance. Examples of measures to be supported under this axis: 1. Construction/reconstruction/modernization of wastewater treatment plants including the introduction of tertiary treatment, where necessary, for agglomerations of settlement with more than 10000 PE, and construction/extension/reconstruction/ of sewage networks within the same agglomerations. 2. Construction/reconstruction/modernization of wastewater treatment plants, where necessary, for agglomerations of settlement with PE between 2000 and 10000 and construction/extension/reconstruction/ of sewage networks within the same agglomerations. 3. Construction/reconstruction/modernization of wastewater treatment plants, where necessary, for settlements with PE below 2000 located within urban agglomeration areas and construction/extension/reconstruction/ of sewage networks within the same settlements. 4. Construction/reconstruction/extension of water supply networks, new water storage tanks, main water supply pipes connecting the water supply networks with the water sources for ensuring provision of required water quantity and/or quality, pumping stations, as well as construction/reconstruction/modernization of drinking water treatment plants, as well as the necessary rehabilitation activities aiming at minimization of the water supply and storage losses. 5. Activities, related to supply of equipment for the detection and measurement of leakages, as well as to the provision of the facilities for sludge treatment from urban waste water treatment plants. These will be supported only within the framework of projects for new and/or extension, reconstruction and modernization of existing sewerage systems, including urban WWTPs. 6. Development and updating of river basins management plans also including prevention activities for protection against natural disasters. Also introduction of contemporary information systems aiming at real time management of the water plants in the country. 7. Development of investment projects for subsequent financing within priority 1 of OP “Environment 2007 – 2013”. An indicative list with major projects to be funded under the axis have been developed – this includes integrated water management projects for Vratza, Gabrovo, Dobrich, Vidin, Pernik, Kardjali, Yanbol, Plovdiv, Asenovgrad, Gotze delchev and Bansko. Priority Axis 4 – Technical Assistance. Allocated 2,5% of the total financial resources of the OP. The priority shall be funded by the European Regional Development Fund. Support will be provided for the programme management, implementation, monitoring, control, and evaluation as well as for publicity measures, programme promotion and exchange of experience. This priority will support the realization of the activities, as well as all studies, considered by the Managing Authority as necessary for the successful Programme implementation. This priority axis will also support the strengthening of the existing capacity in the country, as well as the existing capacity of the structures involved in the general management system of the OP and the municipalities as main beneficiaries and other beneficiaries.

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Examples of measures to be supported under this axis: (1) Activities to support for the OP implementation:

• Assessment (appraisal) of submitted projects and their selection/prioritization (including organization of the sessions of the Project Selection and Coordination Committee);

• Organization and holding the meetings of the OP Monitoring Committee (and of the working groups/sub-committees within the Monitoring Committee);

• Collecting and analyzing data for the OP implementation and monitoring;

• Financing of the needed human resources, involved exclusively in the implementation of strictly defined tasks for OP management, implementation, monitoring, evaluation, publicity, information, control and audit (in accordance with the national rules developed);

• Carrying out OP audits and controls and other relevant expenditure (i.e. expenditure, related to on-the-spot checks of operations implemented in the OP);

• Providing the necessary equipment for the OP implementation and management;

• Preparing, organizing and carrying out trainings for strengthening the capacity of the Managing Authority, Intermediate Body, Internal Audit Directorate, Monitoring Committee (and its sub-committees) and Project Selection and Coordination Committee within the OP;

• Implementing studies, experts’ reports, statistics, tests and evaluations, including those of a general nature, concerning the operation of the OP, as well hiring external expertise for improvement of the OP implementation system and for preparation of the programming documents for the next programming period.

• Support for the implementation of future projects (especially those by which infrastructure is envisaged) including: (1) necessary studies for assessing the technical and managerial needs with respect to the assets to be constructed as part of the respective priority, (2) identifying the necessary training needs and the costs assigned to them and (3) providing training to the beneficiaries of the respective priority in order to strengthening their capacity in projects preparation, submission, tendering, contracting and sound implementation and management of the approved projects as well as further proper operation and maintenance of the delivered assets.

2) Support for publicity and promotion of the OP:

• Preparation, organization and implementation of the OP communication plan, including the envisaged OP publicity and information and dissemination measures; development and maintenance of OP web-page, informing potential beneficiaries about the available assistance under the programme and the results of its implementation; setting up of an information office (center); hiring of needed human resources for information and publicity activities;

• Preparation, translation and dissemination of the official programming documents related to OP overall management and implementation (e.g. the approved OP, Programme Complement, guidelines/manuals/explanatory notes, etc, leaflets and other information packages) to potential beneficiaries and/or the public;

(3) Development of future projects for subsequent financing within priority 4 of OP “Environment 2007-2013”. Table 17: BG Overall Financing Sources OP Environment

Priority Axis Financing from EU

National Public Co-financing

Total funding Rate of EU Funds contribution

Priority axis 1: Improvement and development of water and wastewater infrastructure in settlements with over 2000 PE and in settlements below 2000 PE within urban agglomeration areas

1 027 366 273 256 841 568 1 284 207 841 80%

Priority axis 4: Technical Assistance

39 515 329 6 973 293 46 488 622 85%

Source: MoEW

OP “Regional Development” Axis 1. “Sustainable and integrated urban development” under Operation 1.4. “Improvement of Physical environment and risk prevention” (238 589 939 EUR) will be financing activities and infrastructure aiming at

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risk prevention and more specifically those aiming at flood prevention and fighting with the landslides such as establishment and reinforcement of infrastructure for prevention against floods and landslides, ( i.e. dikes, barrages and other supportive facilities); machinery for maintaining the flood defense lines, machinery for dikes and river-beds prevention of harmful vegetation; small infrastructure measures combating banks’ erosion, creating small reservoirs for water retention, weirs, etc.; setting-up and introduction of hydraulic structures for reducing or eliminating floods and its consequences; rehabilitation and construction of drainage facilities and infrastructures. With regard to water supply and sewerage sector the OP “Regional development” will finance, where necessary, only components related to construction, reconstruction and rehabilitation of water supply and sewage connections and sections, connecting the main networks to separate sites of economic and social infrastructure, as well as flood prevention measures eligible for intervention and falling within the scope of the priorities and operations of OP “Regional Development” – Priority axes 3 Sustainable tourism development and 4 Local Development and Cooperation. The Rural Development Programme also stipulates activities for improvement of the water sector. The following will be financed in the framework of this Programme:

• Construction/reconstruction/rehabilitation of water supply and sewerage infrastructure in settlements, where the PE is below 2000 EP only in rural areas (in 231 rural municipalities) - Axis 3

• Rehabilitation and construction of drainage installations and small infrastructure for flood protection and banks erosion on the territory of the agricultural farm – Axis 1

• Purchase/acquisition, construction or improvement of buildings and other immovable property used for agricultural production on the farm level, including that used for environmental protection (for example manure and septic pits, biomass storehouses, immovable property for sewage/slurry treatment, silage storehouses, etc) - Axis 1

• Investments in on-farm irrigation facilities and equipment for rehabilitation/upgrading of existing network including new pipelines, drop-systems, sprinkling installations, small pump stations, water-saving techniques etc. - Axis 1.

The above measures will be supported under

• Axis 1 “Improving the competitiveness of the agricultural and forestry sector”, Measure 121 “Modernization of agricultural holdings” (1 040 566 938 EUR in total of which 572 311 816 EUR public funding and 468 255 122 private contribution) and

• Axis 3 “Quality of life in rural areas and diversification of the rural economy”, Measure 322 “Village renewal and development” (208 445 838 EUR in total of which 166 756 670 EUR public funding and 41 689 168 private contribution)

Territorial Cooperation programmes (the Transnational Cooperation Programme “South-East European

Space” and the Interregional Cooperation Programme “INTERREG IV C”) and the interventions to be financed by the cross-border programmes Bulgaria-Romania, Bulgaria-Greece, Bulgaria-Serbia, Bulgaria-FYROM and Bulgaria-Turkey. JASPERS20 Initiative - it provides an additional financial and professional support in view of quality

preparation of projects in the environmental sector to be further financed by the EU Structural funds. 3.4. Development of alternative financing schemes in the water sector (including PPP) International financing institutions The EBRD is one of the largest investors in Bulgaria. The Bank is focusing investment efforts in projects which support municipal infrastructure, public and private sector development in energy and small and medium-sized enterprise (SME) development. A list of relevant projects in the water sector is provided in the table bellow:

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Table 18: Main EBRD financed projects in water sector

Project Title Beneficiary Objective Value Date disclosed

Bulgarian FLAG Infrastructure Project

Bulgarian Fund for Local Authorities and Governments (“FLAG”).

Support to the Government for establishing a funding vehicle to facilitate the identification, development and implementation of local nfrastructure projects. Projects to be supported include local water utilities, waste management, municipal building and local road rehabilitation.

EBRD loan 35 million with an option to increase with another 35; total value of the project 100 million

2007

Plovdiv Water Investment Project

Plovdiv Regional Water Company

rehabilitate and up-grade the water supply infrastructure for reduction of water losses and other operating costs, and improving the quality and reliability of provided service.

EBRD loan EUR 9.1 million Other sources: EBRD TC EUR 1.0 million Donor grant EUR 0.3 million

2007

Vez Svoghe mini hydro project

Vez Svoghe Ltd, supported by companies within the Petrolvilla & Bortolotti S.p.A. group.

the construction of nine small hydro power plants (combined installed capacity of 25.7 MW) along a 33 km stretch of the middle section of the river Iskar.

EBRD loan EUR 54 million

2007

Stara Zagora Water Investment Project

Stara Zagora Water Company

rehabilitate the water supply infrastructure in the city to remove the rationing of water, improve the Company’s financial and operational performance by providing technical cooperation funds for the development of financial and operational performance improvement plan for the Company.

EBRD loan EUR 9.0 million Other sources: EBRD TC EUR 1.3 million Donor grant EUR 0.3 million

2007

Rousse Water Investment Project

Rousse Water Company

upgrade and expand water and wastewater infrastructure of the Rousse Regional Water Company and improves its financial and operational performance

EBRD loan EUR 8.0 million Co-finance: ISPA Grant EUR 35.1 million EBRD TC Donor EUR 0.7 million Other sources EUR 3.7 million

2005

Burgas Water Company

Burgas Water Company

upgrade and expand Burgas regional water company’s water and wastewater infrastructure improve the financial and operational performance of the company and address the legal and regulatory reform needed to promote investment into the sector.

EBRD loan EUR 11.0 million Co-finance: ISPA Grant EUR 20.3million Other sources EUR 0.9 million

2004

Sofia Water System Concession Project

Sofijska Voda AD financing of priority investments in Sofia’s water and waste-water system

EBRD loan 35million

2000

Source: EBRD

Since 1990, the EIB's lending in Bulgaria has totalled around EUR 1.24 billion for financing investment projects in connection with meeting the EU accession criteria. On October 10, 2006 the Government of Republic of Bulgaria and the EIB signed a Memorandum of Understanding for the Development and Financing of Infrastructure. According to the memorandum the EIB would provide (through individual loans or through global loans) 500 – 700 million euro annually for the period 2007 - 2013 for supporting the Bulgarian

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investment plans in the area of transport and basic infrastructure. Through the existing credit products EIB could provide financial resources for co- financing SF/CF projects in the frame of the present OPs. The contribution of the EIB could be maximum 50% of the total investment costs. In 2006 the state has approved the state guarantees for EIB financing 3 integrated water projects related to the improvement of the water cycle in the cities of Sliven, Vratza and Gabrovo. These are expected to be considered for financing under priority 1 of OP “Environment 2007-2013”. EIB is ready to consider its participation in PPP projects, as well as to support the Bulgarian government in the elaboration of future PPP projects.

The World Bank (WB) has worked to assist Bulgaria in developing the economy and improving the business environment since it joined the international financial institution in 1990. The Bank’s early support focused on facilitating Bulgaria’s transition from a highly centralized socialist state to a market economy with a stable macroeconomic framework. From 1998, the focus shifted to structural and institutional reforms, which, along with reforms driven by the EU accession process and the IMF, formed the basis for Bulgaria’s subsequent strong growth record.

In the water sector, WB funded 2 main projects, which are now closed:

Table 19: BG World Bank Projects in the Water Sector

Project Value of

Project (EUR) Objectives

Environment and Privatization Support Adjustment Loan

33.4 mil

- support the comprehensive reform of Bulgaria's environmental policies

- help incorporate environmental issues into the privatization

- accelerate the implementation, of the EU Directive on Integrated Pollution Prevention and Control

- harmonize Bulgarian environmental legislation and permit process with EU requirements.

Water Companies Restructuring and Modernization Project

22.8 mil

- increase the corporate autonomy and commercial orientation of the regional water and sewerage companies - improve health and environmental conditions in urban areas and conserve water resources

- transparent procurement procedures, efficient contract

- priority water and sewerage investments efficiency.

Source: World Bank

There is one project under development with a water sector component, the Municipal Infrastructure Development Project. This project includes funding for investments in water infrastructure in urban areas. The total value of the project is estimated at 106 mil EUR.

Alternative financing schemes (PPP) Public Private Partnership (PPP) in Bulgaria is regulated by the following legislation:

• Law on Concessions

• Public Procurement Law

• Contract and Obligations act

• Trade Law

• Territorial Development Act

• Municipal Property Act

• Municipal Debt Act

• Relevant sector legislation

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There is no specific legislation PPP legislation. A draft regulation on PPP for municipalities was elaborated in March 2008. There is a sector PPP established in the MF (EU Funds Management Directorate) which acts as a national centre for expertise and information about PPP including elaboration of the general strategic documents in PPP; methodological guidelines for preparation of projects funded by PPP schemes; analyses and supports the implementation of the EU horizontal policies related to financial schemes, guarantee funds and risk investments. It has developed A Practical Guide for PPP in infrastructure development, which is expected to be revised and amended. The PPP is yet a new form of cooperation between the business and the public sector in Bulgaria. The PPP forms possible to be applied are as follows: concessions, joint ventures, outsoaring and others - as provision of funding, design, construction and exploitation. So far there are 2 concessions in water supply and sewerage services in Bulgaria – for Sofia city and Panagurishte. The Sofia water supply and sewerage concession contract was the first of that type and was signed in 2000 (25 years concession contract). The concession contract for water supply and sewerage in Panagurishte was signed in 2004 and is for 35 years. Concession is a popular form for management and exploitation of small dams (usually municipal property). The dams are given to concessionaires – private companies for management and exploitation (tourism, fishing). Concession is also used for mineral waters (bottling, SPA activities). There is a National Concession Register - http://www.nkr.government.bg/app to the Council of Ministers. According the MRDPW there are PPP projects in process of preparation and likely to be implemented in the water sector for the following municipalities – Plovdiv, Stara Zagora, Burgas, Varna, Dobrcich and Pleven. The main obstacles for successful realization of PPP in Bulgaria in water sector currently are:

• Not fully consistent legislative base with lack of clear rules and procedures in some aspects

• Not fully regulated infrastructure ownership of the facilities in the water sector as well as the risk of ownership change

• Insufficient experience and capacity of the public administration in dealing with PPP

• Lack of experience of the local business in PPP

101

4 Tendering Procedures The procurement is implemented according to the provisions of the national legislation – Public Procurement Law (PPL) and the secondary legislation. The PPL contain provisions, that determine those categories of works, supplies and services obligatory for public procurement, types of procedures and conditions for the selection of procedure for awarding a certain public contract, methods for determining the value of the contract for public procurement, criteria for assessment of the offers (the lowest price or most economically favorable offer) and the specific circumstances under which the candidates should be eliminated from the participation in the notified procedure. An amendment of the low is expected to alleviate some administrative burdens as the numerous declarations by all company managers that the company is not bankrupted as so on. The Public Procurement Agency to the Minister of Economy and Energy facilitates implementation of the PPL. It issues methodological instructions, elaborates standard forms, collects and summarizes the existent practice and monitors the public procurement system, coordinates training activities on the public procurement legislation, supports the process of e-procurement and promotes best practices. The Agency is also responsible for the establishment and maintenance of a Public procurement register (www.aop.bg) and for the submission of information to the European Commission. All public procurement calls should be announced in the electronic register. With the new electronic register it is expected that some of the company documents will not be requested (as the document showing the current status and the authorized signatories). Difficulties for the foreign companies appeared also because generally all documentation is in Bulgarian language. The Contracting Authorities sometime include subjective selection criteria – depending on the evaluation commission or not measurable. In such cases the bidders are entitled to complain to the Commission for Protection of Competition. The calls for proposals always mention from where the tender documentation can be obtained. The tender documentation usually can be found in electronic format at the web-sites of the respective OP. The www.eufunds.bg portal provides information on all EU funded programmes. Information can be found on the OPs strategic documents, call for proposals, latest news. The information is in Bulgarian and English. More detailed information on the OP can be found on their respective websites - OP Environment (http://www.moew.government.bg/) and Regional Development (http://www.bgregio.eu/). With respect to the management of the OP Environment and OP Regional Development the table below provides information on the key institutions. Table 20: BG Key Institutions OP Environment and OP Regional Development

Institutions OP Environment OP Regional Development

Managing Authority Directorate “Cohesion Policy for Environment” within the MoEW

Directorate General “Programming of Regional Development” within the MRDPW central and regional departments*

Intermediate bodies Directorate “EU Funds for Environment” within the MoEW

None

Certifying Authority “National Fund” Directorate within the Ministry of Finance

Audit Authority “Audit of EU Funds” Directorate within the Ministry of Finance

Internal Audit Internal Audit Directorate within the MoEW

Internal Audit Unit Within the MRDPW

Compliance Assessment Body

“Audit of EU Funds” Directorate within the Ministry of Finance

Source: Ecorys South East Europe

102

The Managing Authority for the OP regional development has the following departments at Central and regional level: Central office

• General Director, DG “Programming of Regional Development”

• Department “Programming and Monitoring”

• Department “Implementation of Programme Priorities”

• Unit “Project Preparation Capacity and Technical Assistance”

• Unit “Evaluation”

• Unit “Organizational Development, Information and Publicity”

• Department “Financial Management and Control”

• Department “Legislation, Risk Assessment and Irregularities” Regional departments

• Department "North-west planning region” (Vidin)

• Department "North-central planning region” (Rousse)

• Department "North-east planning region” (Varna)

• Department "South-west planning region” (Sofia)

• Department "South-central planning region” (Plovdiv)

• Department "South-east planning region” (Bourgas) With regard to the Rural Development Programme the key institutions are the following:

• Managing Authority - Rural Development Directorate within the Ministry of Agriculture and Food

• Accredited Paying Agency – State Fund Agriculture

• Certifying Authority - Grant Thornton Ltd. – Bulgaria (representative of Grant Thornton International)

103

D Joint Swot Analysis of the Sector in Romania and Bulgaria

S T

R E

N G

T H

S

In Romania and Bulgaria ���� almost completed harmonization of

environmental legislation with the EU acquis; ���� national strategies and implementation plans of

the relevant Directives for each environmental sector are in place;

���� financial sources for implementation of the strategic measures identified;

���� basic organizational structures for environmental protection field are in place;

���� increased awareness at decision making level for the need to apply environmental protection policies and action plans

���� good technical background at local level.

Additional in Bulgaria o relatively sufficient water resources to

meet the demand for water including high number of mineral water sources;

o major part of the runoff is regulated and about 98% of the population is connected to water supply systems;

o well developed irrigation systems and facilities in the past;

o existing flood protection facilities, water reservoirs, water supply and sewerage infrastructure.

W E

A K

N E

S S

E S

In Romania and Bulgaria ���� cost and labor deficit increasing (including

expertise gaps at institutional level due to lack of financial motivation for attracting good quality specialists)

���� extreme weather manifestations: heavy damaging spring floods/ severe drought periods;

���� relatively low level of investments in all environmental sectors, after 1990, compared to the required investments for complying with European standards;

���� low implementation capacity including the lack of inter-sectorial communication and coordination.

Additional in Romania

◊◊◊◊ inadequate water treatment, sewerage network and low access to centralized water and wastewater systems, low quality of drinking water supplied to population in many areas;

◊◊◊◊ regionalization of public services in progress and not fully functional

◊◊◊◊ inefficient water management structures in smaller towns and large numbers of small municipalities not covered by performing water companies.

O P

P O

R T

U N

I T

I E

S

In Romania and Bulgaria � transition periods set for each subsector with

clear targets and well defined deadlines; � institutional support for definition of measures

as part of the river basin management plans and integrated water management;

� rehabilitation and new build projects in water supply, sewerage and waste water treatment (consultancy, engineering and equipment);

� rehabilitation and new build of flood protection and irrigation facilities (consultancy, engineering and equipment);

� consultancy services for economic analyses of water use and cost benefit analyses;

� private-public partnership � crossborder programs

Additional in Romania

◊◊◊◊ Integrated water resources management

Additional in Bulgaria o development of flood protection/ flood

management strategies including development of early warning systems.

T H

R E

A T

S

In Romania and Bulgaria � low absorption of EU funds due to difficult project

preparation and management as well as expensive co-financing and high bureaucracy (including access to tendering);

� delay in implementation of some of the planned measures due to lack of financial resources at industry operators level;

� lack of expertise in identification and selection of appropriate quality and technical standards for investments in the water sector;

� insufficient institutional capacity to initiate and manage projects/measures in efficient way.

Additional in Bulgaria o over-cautious procedures for contract

awarding and management based on past corruption allegations for SAPARD and PHARE contracting authorities.

104

Annex 1 Romania- National Legislation Transposing Eu Directives In The Water Sector

Directive/National measures

Transposition/Implementation (T/I)

Directive 2000/60/EC establishing a framework for Community action in the field of water policy, amended by Directive 2008/32/EC – totally transposed EGO no. 12/2007 (OJ no. 153/02.03.2007) amending and completing certain normative acts which are transposing the communitarian aquis in the environmental protection sector, adopted by Law no. 161/2007 (OJ

no. 395/12.06.2007)

T

Law no. 112/2006 (OJ no. 413/12.05.2006) amending and completing Law no. 107/1996 T Law no. 310/2004 (OJ no. 584/30.06.2004) amending Law no 107/1996 (OJ no. 244/08.10.1996) T Law no. 107/1996 (OJ no. 244/08.10.1996) (Water Law) T MO no. 913/2001 (not published) approving the framework content of Water Management Plan on hydro-graphic basins

I

GD no. 472/2000 (OJ no. 272/15.06.2000) regarding some measurements for environmental water quality I MO no. 1125/2002 (not published) for the approval of the Committee for the Co-ordination and the Monitoring of the implementation of Directive 2000/60/EC and other directives in the field of water

I

MO no. 1146/.2002 (OJ no. 197/27.03.2002) on the approval of Norms concerning the Reference objectives for the classification of surface water

I

MO no. 662/2006 (OJ no. 661/1.08.2006) on the approval of Procedures and competencies for issuing

the water management permits and licenses

I

MO no. 1.258/2006 (OJ no. 17/10.01.2007) on the approval of the Methodology and technical instructions for the elaboration of the guidelines/schemes

I

MO no. 661/2006 (OJ no. 658/31.07.2006) on the approval of Normative contain of the technical documentation for issuing the water management permits and licenses, which repeals MO no. 277/1997

I

Directive 91/271/EEC concerning urban waste-water treatment, amended by Directive 98/15/EC and Regulation (EC) No. 1882/2003 – totally transposed

GD no. 352/2005 (OJ no. 398/11.05.2005) amending GD no. 188/2002 (OJ no.187/20.03.2002) for the

approval of norms concerning the conditions of discharging the wastewater into the aquatic environment

T

MO no. 662/2006 (OJ no. 661/1.08.2006) on the approval of Procedures and competencies for issuing

the water management permits and licenses T

GD no. 210/2007 (OJ no. 187/19.03.2007) for the amendment of certain normative acts which are

transposing the communitarian aquis in the environmental protection sector T

MO no. 344/2004 (OJ no. 959/19.10.2004) on the approval of technique norms regarding environmental

protection and especially of soils, when the sludge treatments are used in agriculture T

MO no. 661/2006 (OJ no. 658/31.07.2006) on approval of the Normative contain of the technical documentation

105

for issuing the water management permits and licenses, which repeals MO no. 277/1997

Directive 2006/11/EC on pollution caused by certain dangerous substances discharged into the aquatic environment of the Community – totally transposed GD no. 351/2005 (OJ no. 428/20.05.2005) on the approval of the programme of gradually reducing discharges,

emissions and wastages of priority dangerous substances T

GD no. 783/2006 (OJ no. 562/29.06.2006) amending and completing the annex of GD no. 351/2005 (OJ no. 428/20.05.2005) on the approval of the Program for gradually reducing discharges, emissions and wastages of priority dangerous substances

T

GD no. 210/2007 (OJ no. 187/19.03.2007) for the amendment of certain normative acts which are

transposing the communitarian aquis in the environmental protection sector

T

Law no. 112/2006 (OJ no. 413/12.05.2006) amending and completing Law no. 107/1996 (OJ no.

244/08.10.1996) T

EGO no. 12/2007 (OJ no. 153/02.03.2007) for the amendment of certain normative acts which are transposing the communitarian aquis in the environmental protection sector, adopted by Law no. 161/2007 (OJ no. 395/12.06.2007)

T

EGO no. 152/2005 (OJ no. 1078/30.11.2005) on prevention and pollution integrated control T MO no. 245/2005 (OJ no. 565/01.07.2005) for the approval of the Methodology for risk assessment of dangerous substances from Lists I and II and of priority/priority dangerous substances into aquatic environment by mathematic modeling and of the assessment methodology of dangerous substances impact from Lists I and II and of priority/priority dangerous substances into aquatic environment by eco-toxic tests – green algae, daphnia, fishes

I

MO no. 501/2003 (OJ no. 591/20.08.2003) on the approval of Regulation for the elaboration of the initial inventory of pollution sources for aquatic environment and ground waters

I

MO no. 1177/2002 (not published) on the approval of integrated risk assessment methodology in trans-boundary context

I

MO MWEP/MHF no. 1406//191/2003 (OJ no. 213/01.04.2003) for the approval of the fast assessment

methodology of the environment risk and human health I

MO no. 44/2004 (OJ no. 154/23.02.2004) on the approval of the Regulation of water quality monitoring for priority/dangerous priority substances

I

MO no. 479/2006 (OJ no. 619/18.07.2006) on the approval of the Methodology and Questionnaire for reporting of water quality data

I

MO no. 661/2006 (OJ no. 658/31.07.2006) on the approval of Normative contain of the technical documentation for issuing the water management permits and licenses, which repeals MO no. 277/1997

I

MO no. 662/2006 (OJ no. 661/1.08.2006) on the approval of Procedures and competencies for issuing the water management permits and licenses, which repealed OM no. 1141/2002

I

1. Directive 86/280/EEC on limit values and quality objectives for discharges of certain dangerous substances included in List I of the Annex to

106

Directive 76/464/EEC 2. Directive 88/347/EEC amending Annex II to Directive 86/280/EEC on limit values and quality objectives for discharges of certain dangerous

substances included in List I of the Annex to Directive 76/464/EEC 3. Directive 90/415/EEC amending Annex II to Directive 86/280/EEC on limit values and quality objectives for discharges of certain dangerous

substances included in list I of the Annex to Directive 76/464/EEC 4. Directive 82/176/EEC on limit values and quality objectives for mercury discharges by the chlor-alkali electrolysis industry, amended by

Directive 91/692/EEC 5. Directive 83/513/EEC on limit values and quality objectives for cadmium discharges, amended by Directive 91/692/EEC 6. Directive 84/156/EEC on limit values and quality objectives for mercury discharges by sectors other than the chlor-alkali electrolysis industry,

amended by Directive 91/692/EEC 7. Directive 84/491/EEC on limit values and quality objectives for discharges of hexachlorocyclohexane, amended by Directive 91/692/EEC –

totally transposed GD no. 351/2005 (OJ no. 428/20.05.2005) on the approval of the Programme for gradually reducing discharges, emissions and wastages of priority dangerous substances

T

GD no. 783/2006 (OJ no. 562/29.06.2006) amending and completing the annex of GD no. 351/2005 (OJ no. 428/20.05.2005) on the approval of the Program for gradually reducing discharges, emissions and wastages of priority dangerous substances

T

GD no. 210/2007 (OJ no. 187/19.03.2007) for the amendment of certain normative acts which

are transposing the communitarian aquis in the environmental protection sector

T

MO no. 31/2006 (OJ no. 234 bis/15.03.2006) on approval of the Manual for modernizing and

development of the Romanian Waters Integrated Monitoring System (SMIAR), which repeals MO no. 35/2003.

T/I

EGO no. 152/2005 (OJ no. 1078/30.11.2005) regarding the pollution prevention and integrated control T MO no. 661/2006 (OJ no. 658/31.07.2006) on the approval of Normative contain of the technical documentation for issuing the water management permits and licenses, which repeals MO no. 277/1997

MO no. 662/2006 (OJ no. 661/1.08.2006) on the approval of Procedures and competencies for issuing the water management permits and licenses, which repealed OM no. 1141/2002.

Directive 2006/44/EC on the quality of fresh waters needing protection or improvement in order to support fish life (codified version) – totally transposed GD no. 202/2002 (OJ no. 196/22.03.2002) approving the technical norms for the quality of surface waters needing protection or improvement in order to support fish life

T

GD no. 563/2006 (OJ no. 406/10.05.2006) amending GD no. 202/2002 (OJ no. 196/22.03.2002) approving the technical norms for the quality of surface waters needing protection or improvement in order to support fish life

T

GD no. 210/2007 (OJ no. 187/19.03.2007) for the amendment of certain normative acts which

are transposing the communitarian aquis in the environmental protection sector

T

Directive 2006/113/EC on the quality required of shellfish waters (codified version) – totally transposed GD no. 201/2002 (OJ no. 196/22.03.2002) approving the technical Norms regarding the quality of shellfish waters

T

GD no. 467/2006 (OJ no. 349/18.04.2006) amending GD no. 201/2002 (OJ no. 196/22.03.2002) approving the technical Norms regarding the quality of shellfish waters

T

107

GD no. 210/2007 (OJ no. 187/19.03.2007) for the amendment of certain normative acts which

are transposing the communitarian aquis in the environmental protection sector.

T

GD no. 859/2007 (OJ no. 535/07.08.2007) for amending and completing certain normative acts which are finalizing the transposition of the communitarian aquis in the environmental protection sector.

T

Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural sources, amended by Regulation (EC) No. 1882/2003 – totally transposed GD no. 1360/2005 (OJ no. 1061/28.03.2005) for the amendment and completion of GD no. 964/2000

(OJ no. 526/25.10.2000) on the approval of the Action Plan for water protection against nitrates pollution from agricultural sources

T

GD no. 210/2007 (OJ no. 187/19.03.2007) for the amendment of certain normative acts which

are transposing the communitarian aquis in the environmental protection sector

T

MO no. 1387/2006 (OJ no. 91/05.02.2007) on the approval of the Procedure for public

participation to the elaboration, amendment and revision of Action Plans for vulnerable areas by pollution caused with nitrates from agricultural sources

I

MO no. 1072/2003 (OJ no. 71/28.01.2004) on the approval of the organization of the National

Integrated Monitoring, Supervision and Decision Support System reducing nitrate pollution from agricultural sources in surface waters and ground waters and for approving the Surveillance and Appropriate Control Programme, as well as the procedures and instructions for the assessment of monitoring data of the pollutants form surface waters and groundwater

I

MO MWEP/MAFRD no. 452/105.951/2001 (OJ no. 296/06.06.2001) approving the Regulation

regarding the organization and functioning of the Commission and Support Group for the implementation of the action Plan for water protection against nitrates pollution from agriculture sources

I

MO no. 918/2002 (Not published) for issuing the Good agricultural practices code I

MO MEWM/MAFRD no. 241/196/2005 (OJ no. 508/15.06.2005) for the approval of the list of localities

on counties where sources of nitrates from agricultural activities exist and of the list of localities from river basins/areas where sources of nitrates from agricultural activities exist (vulnerable areas and potentially vulnerable)

I

MO MEWM/MAFRD no. 242/197/2005 (OJ no. 471/03.06.2005) for the approval of setting up the

National System of Soil Integrated Management, of surveillance, control and decision for the reduction of the pollutants from agricultural sources and of management of the organic waste from animal breeding in vulnerable or susceptible of vulnerability at nitrate pollution and for the approval of the Program of organization of this System

I

MO MEWM/MAFRD no. 296/216/2005 (OJ no. 529/22.06.2005) for the approval of the Technical

Framework Action Plan for the elaboration of the Action Programs within the areas vulnerable against nitrates pollution from agriculture sources

I

MO MEWM/MAFRD no. 1182/1270/2005 (OJ no. 224/13.03.2006) on the approval of Good

Agricultural Practice for water protection against nitrates pollution from agricultural sources

I

108

MO no. 740/2001 (Not published) for the approval of the nominal component parts of the Commission for applying the Action Plan concerning the protection of waters against pollution caused by nitrates from agricultural sources

I

Directive 2006/7/EC concerning the management of bathing water quality and repealing Directive 76/160/EEC – totally transposed GD no. 546/2008 (OJ no. 404/29.05.2008) concerning the management of bathing water quality T

GD no. 459/2002 (OJ no. 350/ 27.05.2002) for the approval of quality norms for bathing waters T/I

GD no. 88/2004 (OJ no. 133/13.02.2004 approving the Norms for surveillance, sanitary inspection and control of the natural areas for bathing

I

Directive 98/83/EC on the quality of water intended for human consumption, amended by Regulation (EC) No. 1882/2003 – totally transposed

Law no. 311/2004 (OJ no. 582/30.06.2004) for amending Law no. 458/2002 (MO nr. 552/29.07.2002)

on the quality of drinking water

T

GD no. 974/2004 (OJ no. 669/26.07.2004) approving the Norms for surveillance, sanitary inspection

and monitoring of drinking water quality and the Sanitary Authorization Procedure for drinking water use and supply

T

MO no. 341/2007 (OJ no. 149/01.03.2007) for approving hygiene norms and notification procedure of

bottled drinking waters, other than natural mineral or spring waters, commercialized as drinking water

T

MO no. 1193/1996 (not published) on Sanitary Surveillance Norms for drinking water supply public systems

I

MO no. 536/1997 (OJ no. 140/3.07.1997) approving the hygiene Norms and Recommendations on

human environment

I

GD no. 930/2005 (OJ no. 800/02.09.2005) on the approval of special Norms on the type and the size

of protected sanitary and hydro-geological areas

I

MO no. 764/2005 (OJ no. 729/11.08.2005) for approving the Ministry of Health registration procedure

of laboratories which implement the monitoring of drinking water quality within official control of drinking water

T

Directive 75/440/EEC concerning the quality required of surface water intended for the abstraction of drinking water in the Member States, amended by Directives 79/869/EEC and 91/692/EEC – totally transposed (repealed by Directive 2000/60/EC)

GD no. 100/2002 (OJ no. 130/19.02.2002) approving the Quality Norms for the surface waters

intended for drinking water abstraction and the Norms regarding the methods of measurement, the frequency of sampling and analysis of surface waters intended for the drinking water abstraction

T

GD no. 567/2006 (OJ no. 417/15.05.2006) for amending surface waters quality norms for the drinkable

NTPA – 013, approved by GD no. 100/2002 (OJ no. 130/19.02.2002)

T

GD no. 210/2007 (OJ no. 187/19.03.2007) for the amendment of certain normative acts which

are transposing the communitarian aquis in the environmental protection sector.

T

GD no. 662/2005 (OJ no. 616/15.07.2005) for the approval of Quality Norms that have to be fulfilled by

the surface waters used for human consumption and the Normative regarding measurement methods

I

109

and the frequency of sample drawing and analyze of surface waters intended for drinking water (which

amends GD no. 100/2002 (OJ no. 130/19.02.2002)

MO no. 161/2006 (OJ no. 511/13.06.2006) on approval of the Norms for surface water quality

assessment in order to asses the ecological status of water bodies

I

MO no. 377/2001 (Not published) concerning the approval of the reference objectives for the quality of surface waters

I

Directive 79/869/EEC concerning the methods of measurement and frequencies of sampling and analysis of surface water intended for the abstraction of drinking water in the Member States, amended by Directives 81/855/EEC, 91/692/EEC and Regulation (EC) No. 807/2003– totally transposed (repealed by Directive 2000/60/EC)

GD no. 100/2002 (OJ no. 130/19.02.2002) approving the Quality Norms for the surface waters

intended for the abstraction of drinking water and the Norms regarding the methods of measurement, the frequency of sampling and analysis of surface waters intended for the drinking water abstraction

T

GD no. 662/2005 (OJ no. 616/15.07.2005) for the approval of Quality Norms that have to be fulfilled by

the surface waters used for human consumption and the Normative regarding measurement methods and the frequency of sample drawing and analyze of surface waters intended for drinking water (which amends GD no. 100/2002)

T

GD no. 567/2006 (OJ no. 417/15.05.2006) for amending surface waters quality norms for the drinkable

NTPA – 013, approved by GD no. 100/2002 (OJ no. 130/19.02.2002)

T

GD no. 210/2007 (OJ no. 187/19.03.2007) for the amendment of certain normative acts which

are transposing the communitarian aquis for the environmental protection sector

T

Directive 80/68/EEC on the protection of groundwater against pollution caused by certain dangerous substances, amended by Directive 91/692/EC – totally transposed (repealed by Directive 2006/118/EC)

GD no. 783/2006 (OJ no. 562/29.06.2006) on amending the annex of GD no. 351/2005 (MO nr.

428/20.05.2005) on the approval of a Program for gradually reducing of discharges, emissions and wastages caused by priority dangerous substances

T

GD no. 210/2007 (OJ no. 187/19.03.2007) for the amendment of certain normative acts which

are transposing the communitarian aquis for the environmental protection sector

T

Law no. 107/1996 (OJ no. 244/08.10.1996) (Water Law) T

MO no. 31/2006 (OJ no. 234/15.03.2006) on the approval of the Manual for modernizing and development of the Romanian Waters Integrated Monitoring System (SMIAR) (which repeals MO no. 35/2003)

I

MO no. 1049/2002 (Not published) for the approval of the measure plan for the elimination and reduction of the pollution risk to groundwater

I

Directive 2006/118/EC on the protection of groundwater against pollution and deterioration (repealing Directive 80/68/EEC)

Directive 2007/60/EC on the assessment and management of flood risks

Directive 2008/56/EC establishing a framework for community action in the field of marine environmental policy (Marine Strategy Framework Directive)

110

Annex 2 RO ISPA Projects Water Sector

ISPA Measure

Contract Contractor Contract

value (EUR) Deadline

Delay (months)

Constructing a Waste Water Purification Station (WWPS)

JV SISTEM YAPI – EMIT ERCOLE

25,996,214.13 01.08.2010 -

Rehabilitating and expanding the sewer network

JV HIDROCONSTRUCTIA – RABMER – ALPINE

25,892,491.06 08.10.2008 -

2000/RO/16/P/PE/002

Craiova

Rehabilitating the drinking water distribution network

JV HIDROCONSTRUCTIA SA – STRABAG

19,744,881.40 30.04.2010 -

Rehabilitating the Constanta Nord WWPS

JV PASSAVANT ROEDIGER –

THEMELIODOMI 28,585,640.00 11.12.2005 31

Sea evacuation for the Constanta Nord and Eforie Sud WWPS

ATHENA 18,859,446.09 18.12.2006 18

Pumping stations, sewer network and evacuators for Constanta Sud

VA TECH WABAG 17,463,041.41 01.03.2006 0

2000/RO/16/P/PE/003

Constanta

Rehabilitating the Eforie Sud WWPS

PASSAVANT ROEDIGER – THEMELIODOMI

10,795,850.00 23.04.2007 14

Rehabilitating the WWPS PWT WASSER – UND ABWASSERTECHNIK

27,766,980.00 18.10.2008 - 2000/RO/16/P/PE/004

Timisoara Rehabilitating and expanding the Timisoara sewer system

LUDWIG PFEIFFER 9,689,362.00 05.01.2009 -

Rehabilitating the Pascani WWPS and sewer network

ALPINE MAYREDER – TAHAL ROMANIA

9,933,680

Cancelled 2008

To be re-auctioned

Rehabilitating the Motca water supply system

TMUCB - TERMROM 7,413,918.00 10.03.2009 -

2000/RO/16/P/PE/005

Pascani

Rehabilitating the Pascani WWPS

DYTRAS 13,966,512.86 30.06.2010 -

Rehabilitating the WWPS STRABAG

UMWELTANLAGES 24,095,768.00 30.10.2009 -

Building the Chirita treatment station

VA TECH 8,376,357.05 01.10.2007 0

2000/RO/16/P/PE/006

Iasi

Modernizing 3 pumping stations

VA TECH 4,105,261.05 28.03.2006 0

111

Rehabilitating Collector Channel I

HIDROCONSTRUCTIA 9,957,020.64 12.01.2007 0

Efficient distribution of water capacity

TAHAL CONS ENG - PETROCONST

2,928,776.00 07.12.2006 0

Rehabilitating the Tarlung drinking water treatment station

AQUA ENGINEERING 15,790,689.15 27.12.2008 -

2000/RO/16/P/PE/007

Brasov

Efficient distribution of extra water capacity from the Tarlung station and rehabilitating the supply network in the Triaj network

KEVIEP – TAHAL 15,698,415.87 15.11.2008 -

Rehabilitating and expanding the water supply and sewer networks in Cluj Napoca – stage I

SADE 34,085,709.00

Contract cancelled

2005

Re-auctioned

Rehabilitating and expanding the water supply and sewer network in Cluj Napoca – stages II & III

LUDWIG PFEIFFER 25,858,481.53 21.12.2009 -

2000/RO/16/P/PE/008

Cluj

Improving the Tarnita and Gilau water stations

STRABAG - HIDROCONSTRUCTIA

10,124,551.00 17.03.2009 -

2000/RO/16/P/PE/009

Valea Jiului

Rehabilitating the WWPS TECH WABAG 7,321,955.33

Contract cancelled

2007

To be re-auctioned

Emergency contract for the main collector in Rosiori

TUNELE BRASOV 1,344.022.33 04.08.2004 0

Expanding the sewer system and finalizing the main collector in Rosiori

ATHENA 22,424,678.20 07.07.08 ? 2000/RO/16/

P/PE/010

Braila

WWPS Construction TERMOMECANICA 19,484,292.57

Contract canceled

2007

To be re-auctioned

2000/RO/16/P/PE/011

Arad

Rehabilitating the Arad WWPS

BAMAG - TAHAL 13,131,857.74 26.02.2008 4

Rehabilitating the WWPS GINZLER 12,145,169.45 14.02.2009 - 2001/RO/16/

P/PE/012 Rehabilitating and expanding SCA MO TER 2,689,984.38 16.10.2006 0

112

Focsani the sewer network

Rehabilitating the WWPS PWT WASSER – UND ABWASSERTECHNIK

11,062,200.00 27.11.2007 7 2001/RO/16/P/PE/013

Oradea Expanding and rehabilitating the sewer network

KEVIEP 7,799,445.00 15.07.2008 ?

Rehabilitating the drinking water treatment station

DYTRAS 11,157,665.58 20.06.2008 ?

Expanding the sewer network and improving rainfall management

SWIETELSKY EPITO 5,358,000.00 03.10.2008 -

2001/RO/16/P/PE/015

Targu Mures

Rehabilitating the WWPS SPAANS BABCOCK -

ALEWJINSE 8,473,070.00 30.09.2008 -

Rehabilitating the WWPS PWT WASSER – UND ABWASSERTECHNIK

11,171,090

Contract cancelled

2008

Legal dispute

Rehabilitating the sewer network

HIDROCONSTRUCTIA 3,157,749.51 25.04.2009 -

Constructing a new drinking water treatment station

BIWATER 7,416,909.43 14.10.2009 -

2002/RO/16/P/PE/018

Bacau

Main untreated water connection

STRABAG 24,317,728.53

18 months since works begin

-

Rehabilitating the untreated water supply system

KEVIEP 5,100,000.00 29.04.2008 2

Rehabilitating the Martinesti drinking water treatment station

AQUA ENGINEERING 6,163,724.10 14.04.2007 14

Rehabilitating the WWPS SISTEM YAPI 12,448,424.78 28.06.2008 0

2002/RO/16/P/PE/019

Satu Mare

Rehabilitating the sewer system and pumping stations

MOTA ENGIL - VAKOND 8,070,460.98 30.06.2008 0

113

HIDROCONSTRUCTIA 14,756,727.34 26.08.2009 - Rehabilitating, expanding and modernizing the drinking water supply and sewer network

Rehabilitating and expanding the WWPS and rehabilitating the sewer network

OTV FRANCE 10,175,995.00 30.08.2008 ?

Rehabilitating the WWPS SYSTEM YAPI 9,390,140.27 14.04.2008 0

Rehabilitating and expanding the sewer network and monitoring the water distribution network

SYSTEM YAPI 13,668,205.83 14.01.2010 - 2002/RO/16/

P/PE/022

Sibiu

Rehabilitating the Dumbrava water treatment station

AQUA ENGINEERING 8,725,146.00 10.08.2008 0

Rehabilitating the WWPS BIWATER 9,672,460.00 06.06.2008 1

Rehabilitating and expanding the sewer network

STRABAG 8,004,180.20

Contract cancelled

2008

To be re-auctioned

2002/RO/16/P/PE/023

Piatra Neamt

Rehabilitating, expanding and modernizing the drinking water distribution network

STRABAG 6,399,761.47

Contract cancelled

2008

To be re-auctioned

Rehabilitating the Budeasa drinking water treatment station

LACKEBY PURAC DIVISION

8,181,737.86 12.10.2008 -

Rehabilitating and expanding the drinking water and sewer network

SOARES DA COSTA 21,377,656.00 19.06.2010 -

2002/RO/16/P/PE/026

Pitesti

Rehabilitating the WWPS CONSTRUCTIONI DONDI 19,217,169.00 22.052009 -

2003/RO/16/P/PE/025

Bistrita

Rehabilitating and expanding the drinking water and sewer network in Bistrita and the surrounding area

HIDROCONSTRUCTIA 24,795,412.47 24.11.2009 -

2004/RO/16/P/PE/004

Bucharest

WWPS rehabilitation: Phase I AKTOR – ATHENA 83,533,625.00 11.01.2009 -

114

Rehabilitating the drinking water treatment station

OTV FRANCE 9,466,270.00 24.02.2009 -

Rehabilitating and expanding the drinking water and sewer network

HIDROCONSTRUCTIA 16,415,607.67 29.05.2009 -

2004/RO/16/P/PE/004 Baia Mare

Rehabilitating the WWPS OTV FRANCE 12,756,047.00 21.02.2010 -

Rehabilitating the WWPS DYTRAS 10,556,000.02 10.10.2009 - 2004/RO/16/P/PE/001

Botosani Rehabilitating the drinking water treatment stations

PASSAVANT ROEDIGER 10,626,957.19 24.03.2010 -

Rehabilitating and expanding the water and sewer network

ETS 21,447,678.89 12.12.2009 -

Rehabilitating the WWPS ALPINE MAYREDER –

TAHAL ROMANIA 7,017,786.30

Contract cancelled

2008

To be re-auctioned

2004/RO/16/P/PE/008

Drobeta

Rehabilitating the drinking water treatment station

YIT 6,288,016.00 12.08.2009 -

2004/RO/16/P/PE/002

Ramnicu Valcea

Rehabilitating the WWPS PASSAVANT ROEDIGER 10,823,837.76 06.04.2009 -

Rehabilitating the water and sewer network

SOARES DA COSTA – MONTEADRIANO – VEGA

‘93 42,263,883.36 10.06.2010 -

Building a WWPS (primary treatment)

SISTEM YAPI 20,131,989.50 20.01.2010 -

2004/RO/16/P/PE/005

Galati

Rehabilitating a drinking water treatment station and pumping stations

SISTEM YAPI 9,119,117.23 02.03.2010 -

115

Improving the water distribution system and the sewer system in Deva and Hunedoara

HIDROCONSTRUCTIA 26,414,493.09 21.06.2010 -

Rehabilitating the drinking water treatment stations, reservoirs and pumping stations in Deva and Hunedoara

AQUA ENGINEERING 8,202,687.00 24.09.2010 -

2005/RO/16/P/PE/002

Deva-Hunedoara

Constructing a WWPS SISTEM YAPI 20,393,256.54 14.09.2010 -

Water supply system facilities TMUCB – ERG TERMROM 14,890,573.13 29.07.2010 -

Rehabilitating the sewer network

LUDWIG PFEIFFER HOCH – UND TIEFBAU

20,966,365.51 17.06.2010 -

2005/RO/16/P/PE/004

Suceava

Rehabilitating the WWPS DYTRAS 13,669,101.94 11.08.2010 -

116

Annex 3 Romania-National and European Funds Available for the Water Sector

Source of Funding

Management Authority

Priority Axis Measure Eligible projects Eligible beneficiaries Available

funds (EUR) Call for projects

NATIONAL FUNDS

National Rural Development

Fund (EAFRD

3)

MARD4

Axis 3 – “The quality of life in rural areas and the diversification of the rural economy”

Measure 2 – “Measure to improve the quality of life in rural areas”

- water infrastructure (collection, treatment stations, water supply) - waste water network (sewage, waste water cleaning stations)

- rural settlements of less than 10,000 inhabitants - communes - local authorities - intercommunity development associations - NGOs

1,579,217,870 03.11.2008 – 15.12.2008

Environmental Fund

(environmental tax)

MESD5

through AFM6

n/a n/a

- protection of water sources - treatment and purification stations

- private economic agents - public authorities

5.5 billion (2008)

Up to 28.11.2008

Supplying villages with

water, according to GD 577/1997 (state budget)

MDPWH7 n/a n/a

- water infrastructure

- local councils 935 million Ongoing

Government program of supplying

villages with water, approved

through GD 687/1997

(state budget)

MDPWH n/a n/a - water infrastructure

- county councils - local councils

46.4 million still available

out of a total of 300 million

Ongoing

3 European Agricultural Fund for Rural Development)

4 Ministry of Agriculture and Rural Development

5 Ministry of Environment and Sustainable Development

6 Environmental Fund Association

7 Ministry of Development Public Works and Housing

117

Annex 4 Romania Upcoming Project Ideas in the Water Sector

Management Authority

Project County/

River basin

Value of Project (million EUR)

Remarks

Teleorman 122 Under EC8 approval

Giurgiu 72 Approved EC

Calarasi 100 Approved EC

Tulcea 100 Approved EC

Brasov n/a9 Under preparation

Cluj 80 Approved EC Sibiu 90 Approved EC

Gorj 90 Under EC approval

Cluj-Salaj 197 Approved EC

Olt 73 Under EC approval

Bistrita n/a Under preparation

Suceava n/a Under preparation

Modernizing the water/waste water infrastructure

Caras Severin n/a Under preparation

Covasna n/a Under preparation

Harghita n/a Under preparation

Dambovita n/a Under preparation

Iasi n/a Under preparation

Timis n/a Under preparation

Alba n/a Under preparation

Prahova n/a Under preparation

Mures n/a Under preparation

Satu-Mare n/a Under preparation

Neamt n/a Under preparation Valcea n/a Under preparation

Buzau n/a Under preparation

Bacau n/a Under preparation

Hunedoara n/a Under preparation

Extending and modernizing the water supply and sewage network

Brasov n/a Under preparation

Arad n/a Under preparation

Bistrita n/a Under preparation

Dolj n/a Under preparation

Galati n/a Under preparation

Ialomita n/a Under preparation

Ilfov n/a Under preparation

Mehedinti n/a Under preparation

Vrancea n/a Under preparation

Constanta n/a Under preparation

Braila n/a Under preparation

Sibiu n/a Under preparation

MESD (SOP ENV)

Rehabilitating the water supply and sewage network

Bihor n/a Under preparation

Prut 5 Tender open

Arges Vedea 5 Submitted for financing

Dobrogea Litoral n/a Under preparation

Plans for prevention, protection and reduction of flood effects

Ialomita n/a Under preparation

River regularizations, construction and rehabilitation of dykes, preservation of natural conditions

Various n/a On going based on

availability of financing

Ground water monitoring

Various n/a On going based on

availability of financing

MESD (NAAR)

Monitoring of water discharges Various n/a On going based on

8 European Commission

9 Not available

118

and pollution prevention availability of financing

Dolj 2 Selected for financing

Hunedoara 12. Selected for financing Centralized water supply and waste water treatment

Valcea 35.1 Selected for financing Satu Mare 119.2 Selected for financing

Mehedinti 4.2 Selected for financing Hunedoara 6 Selected for financing

Valcea 15.7 Selected for financing Teleorman 21 Selected for financing

Bihor 23.4 Selected for financing

Iasi 28.2 Selected for financing Suceava 30.5 Selected for financing

Vaslui 36.5 Selected for financing Tulcea 44.5 Selected for financing

Sibiu 50 Selected for financing

Dolj 62.5 Selected for financing Alba 82.5 Selected for financing

Dambovita 95 Selected for financing

Drinking water supply, sewage system and purification station

Cluj 103 Selected for financing

Tulcea 18.2 Selected for financing

Hunedoara 70 Selected for financing Constanta 42 Selected for financing

Sibiu 55 Selected for financing Mures 57.4 Selected for financing

Dambovita 154 Selected for financing Olt 70 Selected for financing

Valcea 149 Selected for financing

Buzau 74.5 l Selected for financing Maramures 80 Selected for financing

Cluj 85 Selected for financing

MARD

(water infrastructure

projects funded as

integrated part of wider rural infrastructure

projects)

Centralized sewage system

Iasi 87.7 Selected for financing ROP – Axis 1 “Support to the sustainable development of towns – urban growth poles” Water projects under this axis will eligible only integrated in wider urban infrastructure projects, and not funded individually. First call for projects open, project proposals can be submitted December 2, 2008-March 30, 2009

Supplying villages with water, according to GD 577/1997 Ongoing program. Upcoming projects and future opportunities depend on the yearly budget and available government funding. Individual tenders for projects are published on www.e-licitatie.ro Government program of supplying villages with water, approved through GD 687/1997 Ongoing program. Upcoming projects and future opportunities depend on the yearly budget and available government funding. Individual tenders for projects are published on www.e-licitatie.ro

MDPWH

Integrated system for the rehabilitation of water supply and sewerage systems, of drinking water treatment stations, of waste water purification stations in communities with under 50,000 inhabitants Ongoing program. Upcoming projects and future opportunities depend on the yearly budget and available government funding. Individual tenders for projects are published on www.e-licitatie.ro

MIRA

Capacity building projects in case of emergency situations including flooding, addressed to local authorities aiming to the development of integrated strategies (financing under Sector Operational Program Capacity Building). No calls for projects open at this stage

119

Annex 5 Key contact Romania

Royal Netherlands Embassy in Romania Aleea Alexandru nr. 20, sector 1, Bucharest, Romania T: +40 21 208 60 30 +40 21 231 56 57 F: +40 21 231 63 73 bkr-ea@minbuza.nl (economic department) www.olanda.ro

European Commission Delegation in Romania Str. Jules Michelet nr. 18-20, sector 1, Bucharest, Romania T: +40 21 203 54 00 F: +40 21 212 88 08 delegation-romania@ec.europa.eu www.infoeuropa.ro

Romanian Presidency Cotroceni Palace, Bd. Geniului nr. 1, Bucharest, Romania T: +40 21 410 05 81 F: +40 21 410 38 58 www.presidency.ro

Government of Romania 1 Victoriei Square, Bucharest, Romania T: +40 21 314 34 00 T: +40 21 230 36 60 www.guv.ro

National Bank of Romania 25 Lipscani Str. Sector 3, Bucharest T: +40 21 312 43 75 F: +40 21 314 97 52 bnr@bnro.ro www.bnro.ro

Ministries

Ministry of Environment and Sustainable Development (MESD) 12 Libertatii Bld., 5

th District, Bucharest

T: 0040 21 3160215 F: 0040 21 3163874 srp@mmediu.ro www.mmediu.ro

Managing Authority for the Sector Operational Program (part of MEW) 59-61 Justitiei St., 4th District, Bucharest T : 021 301 83 49 F : 021 316 07 78 malina.frateanu@mmediu.ro victor.ionescu@mmediu.ro www.mmediu.ro

Ministry of Agriculture and Rural Development (MARD) 24 Carol I Bld., 3

rd District, OP 37, 020921,

Bucharest T: 0040 21 3072424 F: 0040 21 3078685 relatiipublice@madr.ro www.madr.ro

Managing Authority for the National Rural Development Program (part of MARD) 24 Carol I Bld., 3

rd District, OP 37, 020921,

Bucharest T: 0040 21 3072424 F: 0040 21 3078685 feadr@madr.ro www.madr.ro

Ministry of Development, Public Works and Housing (MDPWH)

17 Apolodor St., North Wing, 5th District,

Bucharest

T: 0040 37 2111502

F: 0040 37 2111600

laszlo.borbely@mdlpl.ro

www.mdlpl.ro

Managing Authority for the Regional Operational Program (part of MDPWH) 17 Apolodor St., 5

th District, Bucharest

T: 0040 37 2111409 F: 0040 37 2111409 info@mdlpl.ro www.mdlpl.ro

Ministry of Interior and Administrative Managing Authority for the Sector

120

Reform (MIRA) 1A Revolutiei Square, 1

st District, Bucharest

T: 0040 21 3037080 F: 0040 21 3103072 dcrp@mira.gov.ro www.mira.gov.ro

Operational Program Capacity Building (part of (MIAR)

1A Revolutiei Square, 1st District, Bucharest

T: 0040 21 3104060 F: 0040 21 3104061 amdca@mira.gov.ro www.mira.gov.ro

Ministry of Public Health (MPH) 1-3 Cristian Popisteanu St., 1

st District, 010024

Bucharest T: 0040 21 3072524 F: 0040 21 3072675 dirrp@ms.ro www.ms.ro

Ministry of Economy and Finance 17 Apolodor St., 5

th District, Bucharest

T: 0040 21 3199743 F: 0040 21 3121630 cabinet.ministru@mfinante.ro www.mfinante.ro

Other relevant institutions

National Administration “Apele Romane” (NAAR)

6 Edgar Quinet St., 1st District, Bucharest

T: 0040 21 3110396 F: 0040 21 3122174 dispecer@rowater.ro www.rowater.ro

National Meteorological Administration 97 Bucuresti-Ploiesti Drive, Sector 1, 013686 Bucharest T: 0040 21 3183240 F: 0040 21 3163143 relatii@meteo.inmh.ro www.meteoromania.ro

Administration of the ‘Danube Delta” Reservation 34A Portului St., Tulcea, 820243 T: 0040 240 518945 F: 0040 240 518975 arbdda@ddbra.ro www.ddbra.ro

National Environmental Protection Agency (NEPA) 294 Splaiul Independentei Drive, 6

th District,

060031 Bucharest T: 0040 21 2071101 F: 0040 21 2071103 office@anpm.ro www.anpm.ro

Environmental Fund Administration (AFM)

294 Splaiul Independentei Bld., A Building, 6th

District, Bucharest T: 0040 21 3170287 F: 0040 21 3170289 afm@afm.ro www.afm.ro

National Environmental Guard (NEG)

78 Unirii Bld., Bl. J2, 3rd

District, Bucharest T: 0040 21 3268970 F: 0040 21 3268971 gardamediu@gnm.ro www.gnm.ro

National Authority for Regulating Public Utilities Community Services (ANRSC)

6 Romulus St., 2nd

District, Bucharest T: 0040 21 3261781 F: 0040 21 3261796 presedinte@anrsc.ro www.anrsc.ro

National Committee for Emergency Situations

46 Banu Dumitrache St., 2nd

District, Bucharest T: 0040 21 2086150 F: 0040 21 2420990 office@igsu.ro www.igsu.ro

Romanian Water Association (ARA)

202A Splaiul Independentei Bld., 9th floor, 6

th

District, Bucharest T: 0040 21 3162787 F: 0040 21 3162788

National Authority for Regulating and Monitoring Public Procurement (NARMPP) 38 Dinicu Golescu Bld., 1

st District, Bucharest

T: 0040 21 3199565 ext: 123 207 F: 0040 21 3199565

121

info@ara.ro www.ara.ro

anrmap@anrmap.ro www.anrmap.ro

Scientific institutes

National Institute of Hydrology and Water Management 97 Bucharest – Ploiesti Drive, 1

st District,

Bucharest T: 0040 21 3181115 F: 0040 21 3181116 relatii@hidro.ro www.hidro.ro

Public Health Institute in Bucharest (ISPB) 1-3 Dr. Leonte St., 5

th District, 050463

Bucharest T: 0040 21 3183619 F: 0040 21 3183634 stolica@ispb.ro www.ispb.ro

National Institute for Research and Development for Environment Protection (I.C.I.M.) Bucharest 294 Splaiul Independentei Bld., 6

th District,

060031 Bucharest T: 0040 21 3182057 F: 0040 21 3182001 icim@icim.ro www.icim.ro

National Institute for Research and Development for Industrial Ecology (ECOIND) 90-92 Panduri Drive, 5

th District, 050663

Bucharest T: 0040 21 4106716 F: 0040 21 4100575 ecoind@incdecoind.ro www.incdecoind.ro

Danube Delta National Institute for Research and Development 165 Babadag St., Tulcea T: 0040 240 703247 F: 0040 240 703247

122

Annex 6 References Romania [1] Central and local media channels

[2] Council of Europe Development Bank www.coebank.org

[3] County Agencies for Environment Protection

[4] County Councils

[5] County Prefectures

[6] Environment and Water Projects in Romania, The Royal Netherlands Embassy, Bucharest 2007

[7] Environmental Fund Administration www.afm.ro

[8] European Bank for Reconstruction and Development e www.ebrd.org

[9] European Investment Bank www.eib.org

[10] European Structural Funds online information portals: www.fonduri-structurale.ro; www.fonduri-structurale-europene.ro; www.fonduri-ue.ro

[11]Eurostat:http://epp.eurostat.ec.europa.eu/portal/page?_pageid=1996,45323734&_dad=portal&_schema=PORTAL&screen=welcomeref&open=/t_env/t_env_wat&language=en&product=REF_TB_environment&root=REF_TB_environment&scrollto=90

[12] Hydrological Hazards in Romania, National Institute of Hydrology and Water Management http://mediu.gov.md/file/publicati/mediu%20amb/05/5_11-17.pdf

[13] International Commission for the Protection of the Danube River www.icpdr.org

[14] International conference on the implementation of the European Water Framework Directive Sibiu (ROMANIA) - 01-04 October 2008

[15] Japanese International Cooperation Agency http://www.jica.go.jp/english/

[16] List of Motives behind the Law to approve Emergency Ordinance 107/2002 regarding the sett up of the National Administration “Apele Romane”, Chamber of Deputies

[17] Local councils

[18] Ministry of Agriculture and Rural Development, www.madr.ro

[19] Ministry of Development, Public Works and Housing www.mdlpl.ro

[20] Ministry of Environment and Sustainable Development www.mmediu.ro

[21] Ministry of Economy and Finance www.mfinante.ro

[22] Ministry of Internal Affairs and Administrative Reform www.mai.gov.ro

[23] Ministry of Public Health www.ms.ro

[24] National Administration “Apele Romane” www.rowater.ro

[25] National Authority for Regulating and Monitoring Public Procurement www.anrmap.ro

[26] National Environmental Guard www.gnm.ro

[27] National Rural Development Program 2007-2013, MARD www.madr.ro

[28]Netherlands Partners for Water www.nwp.nl

[29] Regio – Regional Operational Programme www.inforegio.ro

[30] Report on Water Quality, MESD, 2007

[31] Romanian Government www.gov.ro

[32] Romanian National Statistics Institute www.insse.ro

[33] Sector Operational Program Environment 2007-2013 www.mmediu.ro

[34] Sustainable Society Index, Romania 2008, The Foundation for a Sustainable Society the Ministry of Environment, The National Agency for Environment Protection and the National Institute of Statistics

[35] United Nations Development Programme www.undp.org

[36] Websites of private companies in the water sector

[37] World Bank Romania www.worldbank.org.ro

[38] http://www.e-licitatie.ro

[39] http://www.euractiv.ro

[40] http://www.dgmarket.ro

123

Annex 7 Bulgaria National Legislation Transposing Eu Directives In The Water Sector

Laws

1 Nature Protection Law (SG 91/25.09.2002)

2 Water Law (SG 67/27 July1999)

3 Law for Regulation of Water Supply and Sewerage Services (SG 18/25.02.2005)

4 Territorial Development Act (SG 1/2 January 2001)

5 Law on Black Sea Coastal Area Development (SG 67/ 29 July 2008)

6 Disasters Protection Law (SG 102/ December 2006)

Regulations

1 Regulation on the long term levels, conditions and regulations for the annual target levels of quality indicators in water supply and sewerage services (SG 32/18 April 2006);

2 Regulation for the prices of the water supply and sewerage services (SG 32/18 April 2006);

3 Regulation for the terms and conditions for registration of the experts to support the Sate Commission for Energy and Water Regulation in implementation of control on water supply and sewerage operators (SG 23/ 17 March 2006)

4 Regulation № 13 оf 2 April 2007 on characterization of surface water (SG 37/8 May 2007)

5 Regulation № 5 of 23 April 2007 on water monitoring (SG 44/5 June 2007)

6 Regulation № 1 of 10 October 2007 on the Exploration, Use and Protection of Groundwater (SG 87/30 October 2007)

7 Regulation No. 11 of 25 February 2002 on the quality of bathing water (SG No.25/08.03.2002)

8 Regulation No. 9 of 16 March 2001 on the Quality of Water Intended for Human Consumption (SG30/28 May 2001)

9 Regulation No. 12 of 18 June 2002 on the Quality Requirements for Surface Water Intended for Drinking Water Abstraction and Household Supply (SG 63/28.06.2002)

10 Regulation No. 4 of 20 October 2000 on the quality of waters supporting fish and shellfish organisms' life (SG 88/27.10.2000)

11 Regulation No. 6 of 9 November 2000 on the Limit Values for Admissible Contents of Dangerous and Harmful Substances in the Waste Water Discharged in the Water Bodies (SG 97/28.11.2000)

12 Regulation No. 7 on the Terms and Procedure for Discharge of Industrial Waste Waters into Settlement Sewer Systems (SG 98/1.12.2000)

13 Regulation No. 8 of 25 January 2001 on the quality of coastal marine waters (SG 10/2.02.2001)

14 Regulation No. 10 on Issuing Permits for Waste Water Discharge into Water Bodies and Setting Individual Emission Limit Values for Point Sources of Pollution (SG 66/27.07.2001)

15 Regulation on the order and the way of recovery of sludge from waste water treatment through its use in the agriculture (SG 112/23.12.2004)

16 Regulation № 2 of 13 September 2007 on the Protection of Waters against Pollution Caused by Nitrates from Agricultural Sources (SG No 27/11.08.2008)

17 Regulation No. 6 of 9 November 2000 on the Limit Values for Admissible Contents of Dangerous and Harmful Substances in the Waste Water Discharged in the Water Bodies (SG No. 97/28.11.2000)

18 Regulation No. 7 on the Terms and Procedure for Discharge of Industrial Waste Waters into Settlement Sewer Systems (SG 98/1.12.2000)

124

Annex 8 Bulgaria ISPA Projects Water Sector

More information on ISPA projects in Bulgaria can be found in English at the following web address: https://ispa.minfin.bg/ProjectsExternal.aspx. The table below lists the projects in Bulgaria in the water sector:

ISPA Measure Implementing Authority Contract value (EUR) Deadline

2006/BG/16/P/PA/001 MoEW 18,846,748.00 31.12.2010

2005/BG/16/P/PE/003 Bourgas

MRDPW 21,000,000.00 31.12.2010

2005/BG/16/P/PE/004 Rousse

MRDPW 46,800,000.00 31.12.2010

2005/BG/16/P/PE/001 Sliven

MoEW 21,200,000.00 31.12.2010

2005/BG/16/P/PE/006 Kyustendil

MoEW 21,200,000.00 31.12.2010

2000/BG/16/P/PE/001 City of Sofia

MoEW 58,500,000.00 31.12.2010

2005/BG/16/P/PA/001 Sofia

MRDPW 20,000.00 31.12.2010

2001/BG/16/P/PE/007 Gledachevo village,

Radnevo, Yambol (SE of Bulgaria)

MoEW 56,128,914.00 01.04.2009

2003/BG/16/P/PA/004 Bulgaria

MoEW 18,946,000.00 31.12.2008

2001/BG/16/P/PE/004 Kovachevo village, Stara Zagora (SE

Bulgaria)

MoEW 72,330,000.00 31.12.2008

2003/BG/16/P/PE/019 Kardjali town (South-

Central Bulgaria MoEW 17,143,142.00 31.12.2008

2003/BG/16/P/PE/013 Smolian, South-Central Bulgaria

MoEW 24,621,021.00 31.12.2008

2002/BG/16/P/PA/002 Sofia, W Bulgaria

MoEW 1,500,000.00 31.12.2006

2002/BG/16/P/PE/018 Shoumen, NE Bulgaria

MoEW 30,315,000.00 31.12.2008

125

2002/BG/16/P/PE/016 Varna, NE Bulgaria

MoEW 25,432,002.00 31.12.2008

2002/BG/16/P/PE/017 Balchik, NE Bulgaria

MoEW 21,589,225.00 31.12.2006

2002/BG/16/P/PA/003 Sofia

NF 1,023,555.00 31.12.2007

2002/BG/16/P/PE/014 Sevlievo, North-Central Bulgaria

MoEW 13,987,623.00 31.12.2007

2002/BG/16/P/PE/015 Popovo, NE Bulgaria

MoEW 11,860,433.00 31.12.2007

2002/BG/16/P/PE/011 Lovech, North-Central

Bulgaria MoEW 18,396,575.00 31.12.2007

2002/BG/16/P/PE/009 Bourgas – Meden

Rudnik, SE Bulgaria MoEW 10,206,220.00 31.12.2007

2002/BG/16/P/PE/010 Targovishte, NE

Bulgaria MoEW 15,235,915.00 31.12.2007

2002/BG/16/P/PE/012 Montana, NW Bulgaria

MoEW 16,741,237.00 31.12.2007

2001/BG/16/P/PE/005 Gorna Oriahovitza,

Dolna Oriahovitza and Liaskovetc, North-Central Bulgaria

MoEW 16,633,945.00 31.12.2006

2001/BG/16/P/PE/006 Pazardjik, SW Bulgaria

MoEW 19,110,968.00 31.12.2006

2001/BG/16/P/PE/008 Blagoevgrad, SW

Bulgaria MoEW 12,580,465.00 31.12.2006

2001/CE/16/P/AT/002 Sofia

MRDPW 130,000.00 31.12.2010

2000/BG/16/P/PE/002 Montana, Ruse,

Pernik, Sevlievo, Silistra and Sozopol

regions

MoEW 60,577,513.00 31.12.2010

2000/BG/16/P/PE/003 Stara Zagora and Dimitrovgrad, SE

Bulgaria

MRDPW 43,399,688.00 31.12.2005

126

Annex 9 Bulgaria Upcoming Project Ideas in the Water Sector

Management Authority

Project Location Value of

Project (EUR) Remarks

Vratza 25 mil10

To be launched in 2008

Gabrovo 37 mil To be launched in 2008

Dobrich 40 mil To be launched in 2009

Pernik 27 mil To be launched in 2009

Kurdjaly 32 mil To be launched in 2009

Jambol 31 mil To be launched in 2009

Extension and rehabilitation of the water supply and sewage network, including relevant equipment

Plovdiv 50 mil To be launched in 2009

Assenovgrad 25 mil To be launched in 2009 Drinking Water Treatment Plant and extension and rehabilitation of the water supply and sewage network , including relevant equipment

Bansko 25 mil To be launched in 2009

Waste Water Treatment Plant and extension and rehabilitation of the water supply and sewage network, including relevant equipment

Gotze Delchev 25 mil To be launched in 2009

Installation for pre-treatment of mixed solid waste – facility for mechanical - biological treatment

Sofia 131 mil To be launched in 2009

MoEW OP Environment

Extension of the sewage network and reconstruction of the water supply network

Vidin 25 mil To be launched in 2009

10 Million

127

Annex 10 Key Contacts Bulgaria General

Royal Netherlands Embassy in Bulgaria

1504 Sofia 15 Oborishte Str. Tel.: +00359 2 816 03 00 Fax: +00359 2 816 03 01 www.mfa.nl/sof

European Commission Representation in Bulgaria 1000 Sofia 9 Moskovska Str. Tel.: +00359 2 933 52 52 Fax: +00359 2 933 52 33 www.evropa.bg

Bulgarian Presidency 1000 Sofia 2 Dondukov Blvd. Tel.: +00359 2 923 93 3 www.president.bg

Government of Bulgaria 1000 Sofia 1 Dondukov Blvd. Tel.: +00359 2 940 27 70 www.government.bg

National Bank of Bulgaria 1000 Sofia 1 Knyaz Alxander I Sq. Tel.: +00359 2 91 459 Fax: +00359 980 24 25 www.bnb.bg

Ministries

Ministry of Regional Development and Public Works 17-19 Kiril and Metidiy Str., 1040 Sofia T: +00359 2 9405 9 www.mrrb.government.bg

Managing Authority of Operational Programme "Regional Development" (part of MRDPW) 17-19 Kiril and Metidiy Str., 1040 Sofia T: +00359 2 9405 439 bchavdarova@mrrb.government.bg www.mrrb.government.bg

Ministry of Environment and Water 1000 Sofia 67 William Gladstone Str. Tel.: +00359 2 940 60 00 www.moew.government.bg

Managing Authority of Operational Programme "Environment" (part of MoEW) 1000 Sofia 67 William Gladstone Str. Tel.: +00359 2 940 6157 margaritov@moew.government.bg

Ministry of Agriculture and Food

1040 Sofia 55 Hristo Botev Blvd. Tel.: +00359 2 9851 11 199 www.mzgar.government.bg

Ministry of Health

1000 Sofia 5 Sveta Nedelya Sq. Tel.: +00359 2 981 01 11 www.mh.government.bg

Ministry of Finance 1000 Sofia 102 Rakovski Str. Tel.: +00359 2 9859 1 www.minfin.bg

Ministry of Emergency Situations 1000 Sofia 6 Sveta Nedelya Sq Tel.: +00359 2 9401 401 www.mes.bg

Other relevant institutions

Danube River Basin Directorate 5800 Pleven 16 Vasil Levski Str., floor 16 Tel.: +00359 64 885 100 www.dunavbd.org

Black Sea River Basin Directorate 9000 Varna 33 Aleksander Diakovich Str. Tel.: +00359 52 631 447 www.bsbd.org

128

West Aegean River Basin Directorate 2700 Blagoevgrad Mitropolit Boris Str. 18 POBox. 441 Tel.: +00359 73 88947102 +00359 73 88947118 www.wabd.bg

East Aegean River Basin Directorate 4000 Plovdiv 26 Bulair Str. Tel.: +359 32 621 552 www.bd-ibr.org

Executive Agency for Hydromelioration 1618 Sofia 136 Tsar Boris I Blvd. Tel.: +00359 2 955 95 70 www.iah.government.bg

Executive Environmental Agency 1618 Sofia 136 Tsar Boris I Blvd. Tel.: +00359 2 955 90 11 http://nfp-bg.eionet.eu.int

Bulgarian Accreditation Service 1797 Sofia, 52A DR. G.M. Dimitrov Blvd. Tel.:+00359 2 873-53-03 http://www.nab-bas.bg/

Bulgarian Institute for Standardisation 1797 Sofia, 165 Str. Nr 3-A "Izgrev" Complex Tel.: +359 2 81 74 504 http://www.bds-bg.org/

Scientific Institutes

Bulgarian Academy of Sciences

1040 Sofia 1, 15 Noemvri Str. Tel.: +359 2 989 84 46 www.bas.bg

Central Laboratory of General Ecology (former Institute of Ecology) 1113 Sofia 2 Yuri Gagarin Str. Tel.: +00359 2 01 744 www.ecolab.bas.bg -

National Institute of Hydrology and Meteorology 1784 Sofia 66 Tsarigradski Chaussee Tel.: +00359 2 462 45 00 www.meteo.bg

University of Architecture Civil Engineering and Geodesy 1046 Sofia 1 Hristo Smirnenski Blvd. Tel.: +00359 2 963 52 45 www.uasg.bg

Institute of Water Problems 1113 Sofia Acad. G. Bonchev Str., bl. 1 Tel.: +00359 2 872 25 72 www.iwp.bas.bg

129

Annex 11 References Bulgaria [1] Strategy for development and management of water sector up to 2015, Council of Ministers, May 2004;

[2] National report for water management on basin principle in Bulgaria – review of the implementation of article 5 and 6 of the WFD, MoEW, March 2005;

[3] National report for implementation of article 8 of the WFD, MoEW, March 2007;

[4] Strategy for management and development of the water supply and sewerage sector in Bulgaria, MRDPW, February 2004;

[5] Bilateral agreements in the area of Environment, MoEW, 2007;

[6] Financial aspects of water supply and sanitation in transboundary waters of South East Europe, German federal Ministry for the Enfironment, Nauture Conservation and Nuclear Safety, April 2006;

[7] Agreement on Cooperation in the Field of Water Management, MoEW and the Ministry of Environment and Water Management of Romania, November 2004;

[8] Rural Development Programme 2007-2013, MAF, December 2007;

[9] Strategic evaluation on environment and risk prevention under structural and cohesion funds for the period 2007-2013, National evaluation report Bulgaria, Executive summary, GHK, November 2006;

[10] Programme for implementation of Directive 96/61/EC in Bulgaria, MoEW, March 2003;

[11] Programme concerning the necessary measures in the circumstances of trend to drought, Council of Ministers, 2001;

[12] Operational Programme Environment 2007-2013, MoEW, December 2007;

[13] Operational Programme Regional Development 2007-2013, MRDPW, September 2007

[14] Current status of water liberalization in Bulgaria, Veselina Penevska;

[15] Time schedules and work programmes for preparation of River basin management plans, Basin directorates, 2006;

[16] Integrated water management in Bulgaria – current state and national priorities, Time ecoprojects foundation, 2003;

[17] Reports on the major problems in water management in the river basins, Basin directorates, December 2007;

[18] National programme for sustainable land management and combating desertification in Bulgaria, Council of Ministers, December 2006;

[19] Programme for restriction and termination of nitrate pollution from agriculture in the vulnerable areas, MAF, 2004.