Water supply and sanitation in Ukraine

Water supply and sanitation in Ukraine

Some history and recent developments


Introduction: EU WaterTime project was very interesting

exercise in trying to understand how water supply was historically developed in Europe. Selection of cities was quite representative and gave good view of various so-to-say “schools” of drinking water supply: Nordic, French, German, British, Eastern Europe, Western Europe


Unfortunately, WU from cities of the former USSR were not represented at this project (except of Baltic republics) though their recent history is quite an indicative as to what political changes, economic upheavals and stagnation may cause to efficiency and reliability of operation of WU utilities of big, but especially small towns.


In my presentation I will try to review some historical and recent developments in water utilities activities and situation in Ukraine.

Historical aspect is concentrated on the city of Kharkov from which I am and about which I have better idea and understanding! It is also concentrated on sanitation, because of specialization of my institute – water pollution control and prevention


General data:Main source of water supply in Ukraine is surface water –about 80 %.

• The total production capacity of the entire centralized water supply systems amounts to 25.7 million m3/day. Of that, 14.9 million m3/day is the capacity of municipal utilities.

• The total length of municipal water distribution networks is 78.8 thousand km. The capacity of waste water treatment facilities is 15.4 million m3/day, while the length of municipal waste water collection networks is 43.9 thousand km.

• On a daily basis, 9.6 million m3 of waste water is treated at the municipal facilities. 4.5 million m3 of insufficiently treated waste water and 176.5 thousand m3 of untreated waste water is being discharged into receiving water bodies.


After independence , the previously state-owned utilities in Ukraine have been decentralised and transferred to municipalities, and the central government has ended subsidies to these utilities:

In 2004, municipalities owned 61 utilities, while 4 remained owned and run by central government . Municipalities now set utility tariffs, in accordance with rules defining which costs can be covered and acceptable profit margin .

Municipalities have legal right to transform WU into autonomous communal production enterprises operations of which can be given into concession or leased, but main assets (infrastructure) still remain municipal property!


• Majority of water utilities are communal enterprises which operate water supply and sanitation systems which are property of municipalities. Number of private WU is negligent and they are small.

• Problem: There are no formal agreements (contracts) between

water utilities and municipal authorities defining mutual obligations as to management, funding and quality of service (no rule of law and economic principles, but predominantly administratively and politically motivated relations)


• Coverage - rather high (about 85 %)• Drinking water quality – average (often below

WHO norms)• Infrastructure – deteriorating: - pipe breaks – 2.5 per km/year - sewerage collectors clogs – 2.4 per

km/year• Water losses – increasing (32% on average)• Reliability of supply – average 18 hrs/day• Water consumption – tends to decrease (now

– 350 l/pc/day)

Water supply and sanitation in Ukraine History of Water Supply in Kharkov

General data: Sanitation - what we have to-day• Population : 1.850 mln• Length of sewers – 900 km• Main pump station – 1.5 mln m3/day• Treatment plants – 2, total capacity 700.000 m3/day• BOD total – 15 mg/l , suspended solids – 12-15

mg/l


Water consumption:• Average 2- 4% annual decrease due to

economic stagnation, higher water tariffs, water metering, decrease of water availability and access to it.

• In the past (before 1992) in Kharkiv 60% of water was consumed by population, 20% by industry.

• Currently – industry 2%, population – 80%.


Water consumption norms (Kharkiv, 2005):• Drinking (cold) water - 8.1 m3/day/per capita• Heating water – 3 m3 /day/per capitaWater Losses:• Water losses are leaks in distribution networks and

understated bills to households residing in five- and nine-storey apartment buildings, which account for 80% of the city population.

• It means that these households consume more water than their bills show.)

• But very often actual consumption may be far less then the water bill shows (8.1 + 3 m3/month – Kharkiv ) which is of great benefit to WU…

Typical household utilities bill (in UAH) (Kiev, September, 2005, for 1 person in a flat with area

of 38.7 m3)- Drinking (cold water) – 4.51 – Hot (bathing) water – 13.05– District heating – 28.56– Cooking gas – 1.89– House maintenance fees – 22.45– Minor repairs – 3.57– Electricity – 7.96 (51 Kw/hour/month/person– Telephone connection – 7.56 (per month)– Total (VAT incl.) – 89.55 = USD 20.0

Part 1 History of Water Supply in Kharkov

General data: Sanitation - what we have to-day• Population : 1.850 mln• Length of sewers – 900 km• Main pump station – 1.5 mln m3/day• Treatment plants – 2, total capacity 700.000 m3/day• BOD total – 15 mg/l , suspended solids – 12-15

mg/l


City of Kharkov – founded in 16561835 – becomes center of a provinceDevelopment of industry – since XIX centuryOpening of centralized water supply system – 1880Main causes: need for drinking water source close to

housing, need for clean water, fire protection, fashion (Moscow had it, St.Petersburg also), improvement of well-being of people resulting in demand, business opportunity

Due to poor water quality –death rate was at the beginning of the XIX century – 60.2 /1000/year

After opening of centralized water supply it went down to 24.8/1000/year


Decision to build sewerage system was taken only in 1908 and designed to serve population of 600.000 people to be reached in 1950 (in 1912 – 239.000); city area –30 km2, 9,359 households, length of street network – 260 km

But in 1939 population already was 833.000 !!!Sewerage production rate – 7 buckets per capita

(Warsaw –6, Moscow – 7) – 1 bucket = 10 litersIndustrial wastes share – 20% of total design

figure of 5 mln. buckets per dayTreatment - biological


Minimum pipe diameter – 200 mm to minimize clogging.

Material – ceramicMain collector – 2.13 x 1.44 brick with

concrete casing due to location in water bearing layer (depth – 10 m). In operation now – 80 years

Gravity flow – from 7/8 of the territory served


Official opening – August 1914Total sewers length – 49 kmTreatment capacity – 4.000 m3/day

System development:Network length – 206 km in 1941 (49km in 1914)In 1952 – more than 25 % of waste water was

discharged untreatedIn 1952 design for reconstruction of the system:Capacity increase – up to 400.000 m3/day


Minimum pipe diameter – 200 mm to minimize clogging.

Material – ceramicMain collector – 2.13 x 1.44 brick with

concrete casing due to location in water bearing layer (depth – 10 m). In operation now – 80 years

Gravity flow – from 7/8 of the territory served


Estimation of waste water production in thous.m3/day

From population: 429 (1970);741(1980) 1.100 (2010)From industry: 267 (1970); 483 (1980) 250

(2010)Total: 696 (1970) 1.224 (1980), 1.350 (2010)


Water supply:Municipal – 360.000 m3/day Industrial supply – 30.000 m3/day (from

bore wells)and 10.000 m3/d (directly from rivers)Water consumption norm – 550 l/day/capita

(1980)

Water supply and sanitation in Ukraine Recent developments

Technical conditions of water supply and sanitation systems

• 26 % of water supply and sewerage networks are in an emergency state,

• 40 % of pump stations require major repair or replacement.

• High number of pipe bursts – 2.5 per 1 km/year


WU expenses coverage: National average -70%Only in Odessa and Chernigiv water production and

delivery costs are fully covered by existing tariffsFor Ukraine as a whole rate of coverage is in the range of

23% (Crimea) up to 96 % (Lviv);To compensate losses for WU cross-subsidies are widely

used – water tariffs for industry are typically 2-3 times higher than for population.

Population pays water bills much better now:– 1993 - 92 %– 1994 - 97% (though there still is back payment problem)Water tariff for population in on average in the range of

1UAH (0.20 USD cent) and for industry it may reach - 7 UAH


Very often WU have to use their depreciation funds to cover routine operational costs.

As a result, annual rate of main assets wear-out at WU makes up on average 6- 8 % but only 2 – 3 % of these assets are annually renewed. As a result the length of water and sewage pipelines in emergency state increased from 2.500 km in 1985 to 37.500 km in 2004


Following USAID-funded project on “Tariffs reform and restructuring of municipal utilities in Ukraine” such performance contracts were introduced in 6 medium-sized towns and in cities of Lviv, Donetsk and Zaporizhizhia;

Actions are also taken to give WU in concessions (e.g. in Odessa) or establishment of JSC (e.g. in Kiev). Majority of shares belong to Kiev city state administration.

However, concession often serves as hidden privatization. According to the law after expiry of the concession period assets acquired during concession period should be returned to the municipal authority


Serious problem is posed by lack of unified, standard and compulsory guidelines for water tariffs setting.

As a result water tariffs are results of administrative pressure, political considerations and without due care for their economic and financial aspects

Concerning capital investments into WU situation starts to improve. So during 2002 – 2004 volume of capital investments doubled up to 243.5 million UAH (from the state budget) and 16.3 million UAH from local budgets. This amount is still very low and is only used to eliminate hot spots

But for reconstruction of centralized water supply and sanitation systems ( mainly to meet ecological requirements) only UAH 50 mln are allocated for the period of 2004 – 2010 by the State Programme budget


Another recent trend: establishment of regional WU (e.g. in Lugansk, Kiev,Rovno, Donetsk). This is rather complicated process, often requiring governmental decisions

Availability of approved business-plans of a WU development is an important step to wider introduction of concessions. Now only 5% of WU have integrated capital investment programmes

Only starting from 2004 water tariffs include investment component (e.g. in Odessa ), though by law it was possible since 2001.


International funding:A number of projects are being

implemented or planned:World Bank – in Lviv (USD 3.39 mln plus

4.66 mln SK (Sweden)EBRD – Zaporizhizhia (USD 27.4 mln)EBRD – Dnepropetrovsk (started in 2005)EBRD – Lugansk, Vinnytsia – planned)


Investments are mainly used for:• Energy and water resources saving• Improvement of pumps operation and automation• Pipelines pressure optimization• Rehabilitation of pipelines• Water metering (which progresses slowly – only 37.9 %

of houses have cold water meters (January, 2005)• Hot water meters – 8.52%• Thermal power meters – 11.6 %• Water temperature regulators – 2.5 %


Performance Agreement for Provision ofWater Supply, Wastewater Disposal and Heat Supply.

This a contract signed between municipal authorities and municipal utilities, including WU

• Improvement of service provision;• Tariff policy;• Level of capital investment and how to finance it;• The role of the city authorities in implementing the enterprises’

strategic action plans;• Regulating the role of ZHEKs (house maintenance company) in the

provision of communal services to customers and in the maintenance of in-building pipe networks;

• Policy on metering services to customers.

Water supply and sanitation in Ukraine WaterTime project – history and recent developments in Ukraine -

conclusions

Analyses of conclusions and GRPs (44 0f them!) prepared under this project show that in general they are well considered and presented. Nearly all of them would be appropriate to Ukrainian situation. There is one good advise – not to blindly copy some GRPs or approaches to conditions existing in that or another country. Especially it concerns issue of PPP, tariffs setting, privatization, subsidies

WaterTime project – history and recent developments in Ukraine – GRPs & Conclusions

• 2TABLE OF GPRS• 2.1 Background constraints: history, actors and factors• GPR 1 Understand the existing structure and its development• GPR 2 Analyse impact of present developments on the future• GPR 3 Clarify responsibility for ancillary services• GPR 4 Clarify responsibility for water resources• GPR 5 Clarify fiscal problems• GPR 6 Reviewing external experience• GPR 7 Make sure relevance of international context is understood• GPR 8 Take EC laws and rules into consideration• GPR 9 Identify the actors and their interests and objectives• GPR 10 Identify the relevant factors• GPR 11 Take steps to avoid corruption• GPR 12 Select consultants and experts carefully

2.3 Public sphere: participation and transparency

GPR 24 Improve decision-making through public participation

GPR 25 Be aware of the role of representative democracy and

electionsGPR 26 Be aware of the role of

courtsGPR 27 Strengthen information

rightsGPR 28 Information and public

participationGPR 29 Need for clear definitions

and transparencyGPR 30 Avoid secrecy of contracts

GPR 31 Create system for monitoring performance

GPR 32 Ensure annual reports and public discussion

GPR 33 Encourage participation in implementation and monitoringGPR 34 Strengthen the role of

auditors

• 2.2Decision-making process• GPR 13 Identify the problem• GPR 14 Distinguish common and distinct problems of private and

public operations• GPR 15 Identify which public interests are being addressed• GPR 16 Identify the objectives of reform• GPR 17 Identify the options• GPR 18 Consider alternative solutions to fiscal problems• GPR 19 Review charging policies• GPR 20 Assess risks of all options• GPR 21 Undertake a comparative review of developed options• GPR 22 Identify the criteria for evaluation• GPR 23 Adopting the final decision


• 2.3 Public sphere: participation and transparency• GPR 24 Improve decision-making through public participation• GPR 25 Be aware of the role of representative democracy and

elections• GPR 26 Be aware of the role of courts• GPR 27 Strengthen information rights• GPR 28 Information and public participation• GPR 29 Need for clear definitions and transparency• GPR 30 Avoid secrecy of contracts• GPR 31 Create system for monitoring performance• GPR 32 Ensure annual reports and public discussion• GPR 33 Encourage participation in implementation and monitoring• GPR 34 Strengthen the role of auditors


• 2.4 Future risks and opportunities• GPR 35 Consider using fines to finance wastewater treatment

plants• GPR 36 Optimise the use of public finance for infrastructure

investment• GPR 37 Assess risks of guarantees and other finance schemes.• GPR 38 Risk of losing public capacity in water• GPR 39 Contracts may be incomplete and unenforceable• GPR 40 Risks of revision of contract terms• GPR 41 Risks of underinvestment in treatment• GPR 42 Risks of exit strategies• GPR 43 Risks of low competition for contracts• GPR 44 Monitor company status

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Water supply and sanitation in Ukraine

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