„Gospodarski susret Tehnologija zaštite okoliša | graditeljstvo | infrastruktura

Croatian water sector and project pipeline for

the comming years

Zagreb 03 March 2017

Robert Kartelo Head of

EU Sector

Hrvatske vode

OBLIGATIONS OF THE REPUBLIC OF CROATIA

Treaty concerning the Accession of the Republic of Croatia to the European Union

Directive on the quality of water intended for human consumption (EUR 1.1 billion)

Directive concerning urban waste water treatment – construction of public waste water collection and treatment system in 281 agglomerations with more than 2,000 PE (EUR 2.6 billion)

Implementation Plan for Water Utility Directives

Public water supply

connection rate 86% (2015), 4% connected to local water supply systems

Investments relate to:

Improvement of water quality in accordance with regulations concerning sanitary quality of water intended for human consumption:

Upgrade of public water supply system up to the affordability threshold

Target year No. of

agglomerations Investments

2018 47 HRK 11,257,617.000

2020 26 HRK 2,572,836.000

2023 208 HRK 8,062,331.000

Total 281 HRK 21,892,784.000

Connection rate to public wastewater systems (2015) about 50%

Potential load - No. of

agglomerations

more than 150.000 PE 4

50.000 - 150.000 PE 16

15.000 - 50.000 PE 43

10.000 - 15.000 PE 28

2.000 - 10.000 PE 190

Total 281

Wastewater collection and treatment

Contractor

Hrvatske vode

Beneficiary

Utility company Employer

Ministy of Environment

Intermediate body 1

Ministry of Regional development

Ministry of Finance EU

Managing authoritiy

Certification body

Intermediate body 2

Managing off EU Funds – Water Sector

Overview of projects in water sector 2007 - 2013

In total 158 PROJECTS

PROJECT WASTEWATER WATER WWTP (PE)

pipeline (km) pipeline (km) SLAVONSKI BROD 36.1 9.0 80.000 DRNIŠ 7.8 4.6 5.000 KNIN 19.7 21.2 20.000 SISAK 8.6 - 60.000 OSIJEK 62.0 16.0 170.000 POREČ 77.8 - 137.500 VUKOVAR 101.5 21.0 42.100 ČAKOVEC 88.2 5.0 75.000 ŽUPANJA 18.2 - 17.000 NOVA GRADIŠKA 34.4 - 22.100 VIROVITICA 36.5 - 26.000 RVS OSIJEK - 86.8 - VODICE 14.5 4.3 40.000 SMALL INTERVENTIONS 154.7 80.2 - TOTAL: 660.0 248.1 620.700

Overview of technical indicators

Example project – city of Osijek

Total investment: € 72,508,560.00

Implementation period: 2013 - 2018

Project activities

Construction/reconstruction of 3 main water supply pipelines 16 km long

Construction/reconstruction of sewer system (62.1 km) with 15 pumping stations

Construction of 4.4 km and reconstruction of 0.17 km of sewers

Construction of a WWTP, capacity 170,000 PE, tertiary treatment

Extension of a drinking water treatment plant to remove arsenic

Supply of system maintenance and inspection equipment

Status:

Approved as a Major Project; in implementation

EUR 559,821,788 Approved projects

100% Allocation in the amount of EUR 199,094,853

EUR 501,259,477 Contracted activities

EU Financial perspective 2007 - 2013

• Sustainable finacial moded establised

• Based on development index of local self-government unit.

• EU / State budget / Hrvatske vode / local

• Average project finance structure: EU finance 68%, National (State budget + HV) 24% local 8%

Index Local State budget Hrvatske vode

< 50% 6,67% 46,67% 46,67%

50 - 75% 13,33% 43,33% 43,33%

75 - 100% 20,00% 40,00% 40,00%

100 - 125% 26,67% 36,67% 36,67%

>125% 33,33% 33,33% 33,33%

Financing model

Pipeline 1 + list 39 (4 years) Pipeline 2 (2 years)

EUR 34,6 million EUR 45,0 million

2300 km of detailed designs for water supply and wastewater networks

3500 km of detailed designs for water supply and wastewater networks

20 preliminary designs for WWTPs 57 preliminary designs for WWTPs

Estimated value of construction: EUR 746 million

Estimated value of construction: EUR 1.053 million

HRVATSKE VODE started with project preparation back in 2010

Projects preparation

Target year Current state Start of

implementation Number of agglomerations Potential load (PE)

2018 Implementation 11 565.274

Preparation 2017 17 1.144.164

Total 2018 47 3.411.431

2020 Implementation 3 51.216

Preparation 2017 8 135.783

2018 13 295.656

Not started - 2 25.786

Total 2020 26 508.441

2023 Implementation 2 31.888

Preparation 2017 21 201.286

2018 67 387.380

Not started - 118 528.630

Total 2023 208 1.149.184

Grand Total 281 5.069.056

Projects pipeline - status

Grant Agreements for the following projects:

• Petrinja Project approved on 7 July 2016

Total value: EUR 56,730,638.08 incl. VAT

Eligible costs: EUR 45,384,510.46

EU: EUR 32,223,000.51; National: EUR 13,161,509.95

• Rovinj Project approved on 9 December 2016:

Total value: EUR 36,819,547.37 incl. VAT

Eligible costs: EUR 29,455,637.89

EU: EUR 21,129,672.72; National: EUR 8,325,965.17

Approval procedure ongoing:

• Krk

Total value: EUR 84,031,786 incl. VAT

2014-2020 – APPROVED PROJECTS

Network: 23,7 months WWTP: 32,7 months

Average duration of contracts

38,90 km Sewage network 15,50 km water supply network

Average lenght by project

50% 45%

1% 4%

Contract by type

MREŽA (FIDIC RED BOOK) UPOV (FIDIC YELLOW BOOK)

OPREMA NADZOR

Types of contracts

17

15

Criteria Category % of Offers

No of activities in Schedule 1-49 70%

> 50 30%

Relationship between activities NE 71%

DA 29%

Scheduling tool MS Excel 47%

MS Project 53%

Resource attached to schedule NE 71%

DA 29%

Critical path defined NE 71%

DA 29%

Preparation of offers

0,3%

1,5%

4,7%

8,9%

13,9%

20,6%

0,5% 1,5%

3,2%

6,3%

9,3%

11,8%

0%

5%

10%

15%

20%

1 2 3 4 5 6

% O

F W

OR

KS

MONTH

Planned / implemented

Average works schedule Planned vs Implemented

• TENDERING STAGE

– Complex tender documentations

– Quality of received offer

– Evaluation criteria MEAT Capex + Opex (electricity) • Capex varies amost ± 25% from mean

• Opex varies almost ± 50% from mean (unrealistic)

– Complaints on allmost any mistake (even language)

– Complaints process blocked investment

• IMPLEMENTATION STAGE – Project design phase underestimated by almost all Contractors

– Contractor try to impose so called „improved to basic solution from his offer” - not in line with the Procurement Act

PUBLIC PROCUREMENT – WWTPs cont

• Development of new standardized tender dossiers in water sector

• Use of the European Single Procurement Document (ESPD)

• Introducing the MEAT in all tendering process

• Simplifying the key requirements for selection of offers

• Open technology approach – up to Tenderer proposal (WWTP)

• Simplifying the Employers requirements – more freedom for Tenderer to propose his technical solution (WWTP)

PUBLIC PROCUREMENT – proposed mesures

THANK YOU FOR YOUR

ATTENTION!