PreFS Report With Cover - FINAL - June 2007

Pilot Water and Sanitation Project, Moldova
Feasibility Studies for Selected Towns for Second Small Town Water Supply and Sanitation Project PRE-FEASIBILITY STUDY REPORT
FINAL REPORT Stockholm June 12
SWECO INTERNATIONAL
SWECO INTERNATIONAL
Water Supply and Sanitation Project Implementation Unit
FEASIBILITY STUDIES FOR SELECTED TOWNS FOR SECOND SMALL TOWN WATER SUPPLY AND SANITATION PROJECT IN MOLDOVA
PRE-FEASIBILITY STUDY REPORT
FINAL Stockholm 12 June 2007 SWECO International AB Water and Environment
Project No. 1989 161 000
rao1e 2005-01-17
S W E CO I N T ERN ATI O N AL Gjrwellsgatan 22 P.O. Box 34044 SE-100 26 Stockholm, Sweden Telephone +46 8 695 65 00 Fax +46 8 695 65 10
P:\ 1080\01 Uppdrag\1989161000 FS 15 Towns Moldova
SWECO INTERNATIONAL
Table of Content
Abbreviations and Acronyms PRE-FEASIBILITY STUDY REPORT 1 1.1 1.2 1.2.1 1.2.2 1.3 2 2.1 2.2 2.2.1 2.2.2 2.2.3 2.2.4 2.2.5 2.2.6 2.2.7 2.2.8 2.3 2.3.1 2.3.2 2.3.3 2.3.4 2.3.5 2.3.6 2.4 2.4.1 2.4.2 2.4.3 2.5 2.5.1 2.5.2 2.5.3 2.5.4 2.5.5 3 3.1 3.2 3.2.1 3.2.2 Introduction Background Project Objectives Overall Project Objectives Target Towns Consultants Time Schedule Bli General Institutional Aspects History The Owner. How the Owner Governs the utility Legal Aspects Organization and Management Staff. Efficiency and training needs Estimation of Consumption. Billing and Collection Relations to customers and other stakeholders Consultants Comments Socio-economic Aspects Social Environment in Moldova Estimation of Household Average Revenues Economic environment in Moldova Special Economic Conditions Social environment in Bli Municipality Economic environment in Bli Municipality Financial Aspects Introduction Analysis of the historical financial performances Financial Selection Criteria Technical Aspects Specific Objectives Related to technical Analysis Water supply and sewerage in Bli Water Supply System Sewerage System Prioritizing of needed Investments for years 20092013 Cahul General Institutional Aspects History The Owner. How the Owner Governs Apa-Canal X 1 1 1 2 2 2 4 5 5 6 6 6 7 7 9 10 11 11 12 12 13 13 15 15 17 19 19 20 27 29 29 29 30 35 40 43 43 44 44 44
rao1e 2005-01-17
Water Supply and Sanitation Implementation Unit 12 June 2007 FINAL Pre-Feasibility Study Report II
SWECO INTERNATIONAL
3.2.3 3.2.4 3.2.5 3.2.6 3.2.7 3.2.8 3.3 3.3.1 3.3.2 3.4 3.4.1 3.4.2 3.4.3 3.5 3.5.1 3.5.2 3.5.3 3.5.4 3.5.5 4 4.1 4.2 4.2.1 4.2.2 4.2.3 4.2.4 4.2.5 4.2.6 4.2.7 4.2.8 4.3 4.3.1 4.3.2 4.4 4.4.1 4.4.2 4.4.3 4.5 4.5.1 4.5.2 4.5.3 4.5.4 4.5.5
rao1e 2005-01-17
Legal Aspects Organization and Management Staff. Efficiency and training needs Estimation of Consumption. Billing and Collection Relations to customers and other stakeholders Consultants Comments Socio-economic Aspects Social environment in Cahul Economic environment in Cahul Financial Aspects Introduction Analysis of the historical financial performances Financial Selection Criteria Technical Aspects Specific Task Objectives Related to technical Analysis Water supply and sewerage in Cahul Water Supply System Sewerage System Prioritising of needed Investments for years 20092013 Clrai General Institutional Aspects History The Owner. How the Owner Governs Apa-Canal Legal Aspects Organization and Management Staff. Efficiency and training needs Estimation of Consumption. Billing and Collection Relations to customers and other stakeholders Consultants Comments Socio-economic Aspects Social environment in Clrai Economic environment in Clrai Financial Aspects Introduction Analysis of the historical financial performances Financial Selection Criteria Technical Aspects Specific Task Objectives Related to Technical Analysis Water supply and sewerage in Clrai Water Supply System Sewerage System Prioritising of needed Investments for years 20092013 Cueni General
45 45 46 47 47 47 48 48 49 51 51 52 59 60 60 60 62 68 71 75 75 76 76 76 76 76 78 78 78 78 79 79 80 83 83 83 91 92 92 93 94 98 101 105 105
5 5.1
Water Supply and Sanitation Implementation Unit 12 June 2007 FINAL Pre-Feasibility Study Report III
SWECO INTERNATIONAL
5.2 5.2.1 5.2.2 5.2.3 5.2.4 5.2.5 5.2.6 5.2.7 5.2.8 5.3 5.3.1 5.3.2 5.4 5.4.1 5.4.2 5.4.3 5.5 5.5.1 5.5.2 5.5.3 5.5.4 5.5.5 6 6.1 6.2 6.2.1 6.2.2 6.2.3 6.2.4 6.2.5 6.2.6 6.2.7 6.2.8 6.3 6.3.1 6.3.2 6.4 6.4.1 6.4.2 6.4.3 6.5 6.5.1 6.5.2 6.5.3 6.5.4 6.5.5
Institutional Aspects History The Owner. How the Owner Governs Apa-Canal Legal Aspects Organization and Management Staff. Efficiency and training needs Estimation of Consumption. Billing and Collection Relations to customers and other stakeholders Consultants Comments Socio-economic Aspects Social environment in Cueni Economic environment in Cueni Financial Aspects Introduction Analysis of the historical financial performances Financial Selection Criteria Technical Aspects Specific Task Objectives related to Technical Analysis Water supply and sewerage in Cueni Water Supply System Sewerage System Prioritising of needed Investments for years 20092013 Drochia General Institutional Aspects History The Owner. How the Owner Governs Apa-Canal Legal Aspects Organization and Management Staff. Efficiency and training needs Estimation of Consumption. Billing and Collection Relations to customers and other stakeholders Consultants Comments Socio-economic Aspects Social environment in Drochia Economic environment in Drochia Financial Aspects Introduction Analysis of the historical financial performances Financial Selection Criteria Technical Aspects Specific Task Objectives Related to technical Analysis Water supply and sewerage in Drochia Water Supply System Sewerage System Prioritising of needed Investments for years 20092013
106 106 107 107 107 109 110 110 111 111 111 112 115 115 115 123 124 124 124 125 128 131 135 135 136 136 136 137 137 139 140 140 140 141 141 142 145 145 145 153 155 155 155 156 161 164
rao1e 2005-01-17
Water Supply and Sanitation Implementation Unit 12 June 2007 FINAL Pre-Feasibility Study Report IV
SWECO INTERNATIONAL
7 7.1 7.2 7.2.1 7.2.2 7.2.3 7.2.4 7.2.5 7.2.6 7.2.7 7.2.8 7.3 7.3.1 7.3.2 7.4 7.4.1 7.4.2 7.4.3 7.5 7.5.1 7.5.2 7.5.3 7.5.4 7.5.5 8 8.1 8.2 8.2.1 8.2.2 8.2.3 8.2.4 8.2.5 8.2.6 8.2.7 8.2.8 8.3 8.3.1 8.3.2 8.4 8.4.1 8.4.2 8.4.3 8.5 8.5.1 8.5.2 8.5.3
Fleti General Institutional Aspects History The Owner. How the Owner Governs Apa-Canal Legal Aspects Organization and Management Staff. Efficiency and training needs Estimation of Consumption. Billing and Collection Relations to customers and other stakeholders Consultants Comments Socio-economic Aspects Social environment in Fleti Economic environment in Fleti Financial Aspects Introduction Analysis of the historical financial performances Financial Selection Criteria Technical Aspects Specific Task Objectives related to technical Analysis Water supply and sewerage in Water Supply System Sewerage System Prioritising of needed Investments for years 20092013 Floreti General Institutional Aspects History The Owner. How the Owner Governs the utility Legal Aspects Organization and Management Staff. Efficiency and training needs Estimation of Consumption. Billing and Collection Relations to customers and other stakeholders Consultants Comments Socio-economic Aspects Social environment in Floreti Economic environment in Floreti Financial Aspects Introduction Analysis of the historical financial performances Financial Selection Criteria Technical Aspects Specific Task Objectives Related to Technical Analysis Water supply and sewerage in Floresti Water Supply System
169 169 170 170 170 171 171 173 173 174 174 175 175 176 178 178 178 188 189 189 189 190 195 199 203 203 204 204 205 206 206 209 210 211 211 212 212 214 216 216 216 225 226 226 226 228
rao1e 2005-01-17
Water Supply and Sanitation Implementation Unit 12 June 2007 FINAL Pre-Feasibility Study Report V
SWECO INTERNATIONAL
8.5.4 8.5.5 9 9.1 9.2 9.2.1 9.2.2 9.2.3 9.2.4 9.2.5 9.2.6 9.2.7 9.2.8 9.3 9.3.1 9.3.2 9.4 9.4.1 9.4.2 9.4.3 9.5 9.5.1 9.5.2 9.5.3 9.5.4 9.5.5 10 10.1 10.2 10.2.1 10.2.2 10.2.3 10.2.4 10.2.5 10.2.6 10.2.7 10.2.8 10.3 10.3.1 10.3.2 10.4 10.4.1 10.4.2 10.4.3 10.5
Sewerage System Prioritising of needed Investments for years 20092013 Leova General Institutional Aspects History The Owner. How the Owner Governs the Utility Legal Aspects Organization and Management Staff. Efficiency and training needs Estimation of Consumption. Billing and Collection Relations to customers and other stakeholders Consultants Comments Socio-economic Aspects Social environment in Leova Economic environment in Leova Financial Aspects Introduction Analysis of the historical financial performances Financial Selection Criteria Technical Aspects Specific Task Objectives Related to Technical Analysis Water supply and sewerage in Leova Water Supply System Sewerage System Prioritising of needed Investments for years 20092013 Orhei General Institutional Aspects History The Owner. How the Owner Governs the utility Legal Aspects Organization and Management Staff. Efficiency and training needs Estimation of Consumption. Billing and Collection Relations to customers and other stakeholders Consultants Comments Socio-economic Aspects Social environment in Orhei Economic environment in Orhei Financial Aspects Introduction Analysis of the historical financial performances Financial Selection Criteria Technical Aspects
234 238 242 242 243 243 243 243 244 245 246 246 246 247 247 248 250 250 251 258 259 259 260 261 266 269 273 273 274 274 274 274 275 278 279 279 280 280 280 281 283 283 283 291 292
rao1e 2005-01-17
Water Supply and Sanitation Implementation Unit 12 June 2007 FINAL Pre-Feasibility Study Report VI
SWECO INTERNATIONAL
10.5.1 10.5.2 10.5.3 10.5.4 10.5.5 11 11.1 11.2 11.2.1 11.2.2 11.2.3 11.2.4 11.2.5 11.2.6 11.2.7 11.2.8 11.3 11.3.1 11.3.2 11.4 11.4.1 11.4.2 11.4.3 11.5 11.5.1 11.5.2 11.5.3 11.5.4 11.5.5 12 12.1 12.2 12.2.1 12.2.2 12.2.3 12.2.4 12.2.5 12.2.6 12.2.7 12.2.8 12.3 12.3.1 12.3.2 12.4 12.4.1
Specific Task Objectives Related to technical Analysis Water supply and sewerage in Orhei Water Supply System Sewerage System Prioritising of needed Investments for years 20092013 Rcani General Institutional Aspects History The Owner. How the Owner Governs the utility Legal Aspects Organization and Management Staff. Efficiency and training needs Estimation of Consumption. Billing and Collection Relations to customers and other stakeholders Consultants Comments Socio-economic Aspects Social environment in Rcani Economic environment in Rcani Financial Aspects Introduction Analysis of the historical financial performances Financial Selection Criteria Technical Aspects Specific Task Objectives Related to Technical Analysis Water supply and sewerage in Water Supply System Sewerage System Prioritising of needed Investments for years 20092013 Singerei General Institutional Aspects History The owner and how the owner governs Apa-Canal Legal Aspects Organization and Management Staff. Efficiency and training needs Estimation of Consumption. Billing and Collection Relations to customers and other stakeholders Consultants Comments Socio-economic Aspects Social environment in Singerei Economic environment in Singerei Financial Aspects Introduction
292 292 294 301 305 309 309 310 310 310 310 311 312 313 314 314 315 315 316 318 318 318 326 327 327 328 329 333 337 341 341 342 342 342 343 343 344 345 345 345 346 346 347 349 349
rao1e 2005-01-17
Water Supply and Sanitation Implementation Unit 12 June 2007 FINAL Pre-Feasibility Study Report VII
SWECO INTERNATIONAL
12.4.2 12.4.3 12.5 12.5.1 12.5.2 12.5.3 12.5.4 12.5.5 13 13.1 13.2 13.2.1 13.2.2 13.2.3 13.2.4 13.2.5 13.2.6 13.2.7 13.2.8 13.3 13.3.1 13.3.2 13.4 13.4.1 13.4.2 13.4.3 13.5 13.5.1 13.5.2 13.5.3 13.5.4 13.5.5 14 14.1 14.2 14.2.1 14.2.2 14.2.3 14.2.4 14.2.5 14.2.6 14.2.7 14.2.8 14.3 14.3.1
Analysis of the historical financial performances Financial Selection Criteria Technical Aspects Specific Task Objectives Related to technical Analysis Water supply and sewerage in Singerei Water Supply System Sewerage System Prioritising of needed Investments for years 20092013 Teleneti General Institutional Aspects History The owner and how the owner governs Apa-Canal Legal Aspects Organization and Management Staff. Efficiency and training needs Estimation of Consumption. Billing and Collection Relations to customers and other stakeholders Consultants Comments Socio-economic Aspects Social environment in Teleneti Economic environment in Teleneti Financial Aspects Introduction Analysis of the historical financial performances Financial Selection Criteria Technical Aspects Specific Task Objectives Related to Technical Analysis Water supply and sewerage in Water Supply System Sewerage System Prioritising of needed Investments for years 20092013 Ungheni General Institutional Aspects History The Owner. How the Owner Governs Apa-Canal Legal Aspects Organization and Management Staff. Efficiency and training needs Estimation of Consumption. Billing and Collection Relations to customers and other stakeholders Consultants Comments Socio-economic Aspects Social environment in Ungheni
349 359 360 360 361 362 366 368 372 372 373 373 373 374 374 375 376 376 376 376 377 378 380 380 380 388 389 389 390 391 396 399 403 403 404 404 405 405 406 408 408 409 409 410 410
rao1e 2005-01-17
Water Supply and Sanitation Implementation Unit 12 June 2007 FINAL Pre-Feasibility Study Report VIII
SWECO INTERNATIONAL
14.3.2 14.4 14.4.1 14.4.2 14.4.3 14.5 14.5.1 14.5.2 14.5.3 14.5.4 14.5.5 15 15.1 15.1.1 15.1.2 15.1.3 15.2 15.3
Economic environment in Ungheni Financial Aspects Introduction Analysis of the historical financial performances Financial Selection Criteria Technical Aspects Specific Task Objectives Related to Technical Analysis Water supply and sewerage in Ungheni Water Supply System Sewerage System Prioritising of needed Investments for years 20092013 Recommended Towns for Preparation of Feasibility Studies Scoring of the towns Institutional Aspect Socio-Economic Aspect Financial Aspect Conclusion and Recommendation Summary of preliminary investment cost
411 413 413 413 422 423 423 423 424 431 435 438 438 438 441 442 445 446
Appendix 1 448
Appendix 1
Sources of information for the Institutional Aspect
rao1e 2005-01-17
Water Supply and Sanitation Implementation Unit 12 June 2007 FINAL Pre-Feasibility Study Report IX
SWECO INTERNATIONAL
Abbreviations and Acronyms

BOD GIS GDP Ha IAS km kWh l/cap/d MDL MIS m2 m3 n/a p PS UNDP USD WB WWPS WTP WWTP Biological Oxygen Demand Geographical Information System Gross Development Product hectare International Accounting Standard kilometre kilo Watt hour litre/capita/day the currency in Moldova, Moldavian lei Management Information System square metre cubic metre not available person pumping station United Nations Development Programme US dollar World Bank Wastewater Pumping Station Water Treatment Plant Wastewater Treatment Plant
rao1e 2005-01-17
Water Supply and Sanitation Implementation Unit 12 June 2007 FINAL Pre-Feasibility Study Report X
SWECO INTERNATIONAL
Feasibility Studies for Selected Towns for Second Small Town Water Supply and Sanitation Project in Moldova
PRE-FEASIBILITY STUDY REPORT
1
1.1
Introduction
Background
The Republic of Moldova has prepared a Plan up to year 2015 for water supply and sewerage. The Plan is a part of a complex of processes for rehabilitation of water supply sources and for increasing of the technical and sanitary condition of the water supply and sewerage systems, stipulated in the National Action Plan for health in relation to environment, approved by Government Decree no.487 dated June 19, 2001. The main scope of the Plan is solution of a set of problems, with organizational, technical, economical and legal character. Solving these will assure stable and continuous operation of centralized and decentralized water supply and sewerage systems. The scopes of the Plan are the following: Contribution to wealth increase and health protection of the population; Rational use of water Protection of environment; Protection against pollution and depletion of sources of water supply; Reasonable management of capital investments. Rehabilitation of the quality of services provided to consumers
rao1e 2005-01-17
Water Supply and Sanitation Implementation Unit 12 June 2007 FINAL Pre-Feasibility Study Report 1
SWECO INTERNATIONAL
Increase of economic efficiency of water supply and sewage collection utilities operation Reducing by 50% of the number of population (about 1 million. inhabitants) which have not access to safe water supply.
1.2
1.2.1
Project Objectives
Overall Project Objectives The ultimate objective of this project, the second small town water supply and sanitation project in Moldova, is to enable Apa-canals in selected towns to supply the population with continuous, efficient and sustainable water and wastewater services over time. The project is divided into two main phases one pre-feasibility phase and one feasibility phase. The purpose of the pre-feasibility phase is to select 10 towns for preparation of feasibility studies during the next phase. The purpose of the coming feasibility studies is to propose investments financed by a credit from the World Bank. This document contains the Pre-feasibility study.
1.2.2
Target Towns According to the Terms of Reference for the project the Consultant should analyse the following fifteen towns from four aspects and select the ten best towns for preparation of feasibility studies: Bli, Cahul, Clrai, Cueni, Drochia, Fleti, Floreti Leova, Nisporeni, Orhei, Rcani, Singerei, Soroca, Teleneti and Ungheni. See location in figure 1.2.1. The four aspects analysed for selecting the ten towns are the institutional, the socio-economic, the financial and the technical aspects. Of these the three first aspects are, according to the contract, the most important ones. All four aspects, especially the technical one, will be further developed in the feasibility studies prepared during the next phase of the project. Each Consultant for the four Aspects visited most of the towns and collected both written and oral information. Before the visits most of the towns had already answered at least partly a questioner prepared
rao1e 2005-01-17
SWECO INTERNATIONAL
by the World Bank financed unit in Chiinu, Water Supply and Sanitation Project, and sent to all the towns. Before the visits the Consultant also sent a separate list of questions more specific for the Institutional Aspects of the study.
Figure 1.2.1 Map over Moldova
rao1e 2005-01-17
Based of the collected information the Consultant prepared this study and recommended 10 towns for continued participation in the project. Soroca, already participating in a project financed by the World Bank, informed during the work that they for the moment cannot afford any
SWECO INTERNATIONAL
more projects financed by credits. Also Nisporeni informed that they can not participate in the project. The Consultant therefore visited the thirteen remaining towns for collection of data. Nisporeni decided later to participate anyway and sent some information to the Consultant but too late and too poor to be used for any qualified analysis.
1.3
Consultants Time Schedule

Figure 1.3.1 presents a simplified time schedule for the whole project period including Pre-Feasibility Phase and Feasibility Phase. The time needed for the Clients comments is not exactly specified in the contract and therefore only roughly indicated in the time schedule.
Month Apr Activity
Project start Pre-feasibility study Draft feasibility study for 2 towns Draft feasibility study for 8 towns Client's comments (assumed time) Final feasibility study for 10 towns 2 weeks after Client's coments.
May June July
Aug
Sept Oct
Nov
Dec
Figure 1.3.1 Simplified time schedule for the project period.
rao1e 2005-01-17
SWECO INTERNATIONAL
2
2.1
Bli
General
Bli is the largest town in the north part of the republic, being located at distance of 138 km from Chiinu.
Figure 2.1.1 Location of Bli
rao1e 2005-01-17
The official number of inhabitants is approximately 142000. Considering both emigration to other countries and not registered immigration to Bli from the surrounding smaller towns and rural
SWECO INTERNATIONAL
areas, the real number is might be different according to assumptions made by people met. Water is now supplied 24 hours per day. Bli is one of five so called Municipalities in Moldova. According to the Law on administrative-territorial organization of the Republic of Moldova no.764 dated 27 December 2001 the municipality is a urban settlement with a special role in the economic, social, cultural, scientific, politic and administrative life of the country, with important industrial and commercial facilities and education, health and culture institutions. This status is granted to Chiinu, Bli, Bender, Comrat and Tiraspol according to the same law. However, there are no specific legal rights granted to the localities with the status of the municipality in comparison with the towns.
2.2
2.2.1
Institutional Aspects
History The first water and wastewater services in Bli date back to year 1944. The water and wastewater services as well as all other technical municipal services were then operating as a section under the local authorities. The present Municipal Enterprise Regia ApCanal-Bli was established in year 2000. During the Soviet time cities as Bli got state subsidies for the water and sewage services. The company cannot see any other advantages or disadvantages with the change to a municipal enterprise.
2.2.2
The Owner. How the Owner Governs the utility The Town is the only owner of the service utility. The utility consists of one of the departments of the Town Administration. The Town Council appoints the Director of the utility. There is no board, steering committee or similar between the company and its owner. The Director therefore reports to the Deputy Mayor responsible for technical questions. Beside this he also reports twice per year to the Town Council. Tariffs and consumption norms are approved by the Town Council.
rao1e 2005-01-17
The Town has no service agreement with Apa-Canal describing for instance the level of service to the customers.
SWECO INTERNATIONAL
2.2.3
Legal Aspects The enterprise has its own statutes. The Municipality is the owner of all the assets including both water and wastewater facilities. The enterprise operates these facilities. Beside the national legislation Bli has local rules for metering, wastewater discharge from enterprises to the municipal system and regulations on payment for being a client according to a decision of the local town council On regulation of the wastewater discharged by the industrial enterprises into the municipal network and functioning of the wastewater treatment plant. Apa-Canal has written agreements with all its customers.
2.2.4
Organization and Management The organization chart for the enterprise is presented below. The Director has worked in his present position since 1997. The utility has no formal management team, but the Director has a meeting with the heads of departments each week. He has also daily meetings with the chief engineer and others when they go through the daily operation questions. The secretary attends the meetings and takes notes. The minutes are not digitalized and open. There is no fixed agenda for the meetings. For the daily operation of the utility the Director has a meeting every day with the head of production and other heads of departments. These meetings are an important part of the internal information in the utility. Apa-Canal has approximately 20 computers for accounting, billing, salaries and technical purposes. The Director has one of the computers. The software is 1C. The system is integrated and functions as a management information system. Expressions such as performance indicators and financial ratios are rather unknown. The utility started some 10 years ago to introduce GIS, and the system covers now approximately half the town.
rao1e 2005-01-17
SWECO INTERNATIONAL
Town Council
Municipal service dept. Balti ApaCanal Director
Planning dept 2 p
Chief accountant 1p
Computer centre 4p
Security service
Book keeping 5 p
Techn inspectors dept 7.5 p
Deputy Director 1p
Customer dept 39 p
Chief engineer 1p
HR dept 2 p
Others 4 p
Figure 2.2.1 Organization of Regia Ap-Canal-Bli
There are thus technical tools for good internal information, but there seems to be a need for training in improved understanding of the possibilities to use the system for efficient information, how to involve the personnel in the utilities business and development, how information should be efficiently used in the company. Apa-Canal has prepared a development plan. The company has an ongoing project financed through a credit plus the local budget, and the development plan was prepared before taking the credit and
rao1e 2005-01-17
Laboratory centre 13 p
Production & engineering 4 p
Energy service 17p
Water network 44 p
Safety service 1p
Repair station 12 p
Sewerage network 13 p
WWTP 71 p
Dispatcher service 13 p
PS 56.5 p
Constr. & repair dept 10 p
Goods storage 1p
Civil protection engineer 1 p
Garage 65.5 p
Guards 33 p
SWECO INTERNATIONAL
starting the project. They have also a number of action plans, for instance one for reduced leakages and improved operation until 2010. Principles of accountable management or management by objective helping to engage the personnel in the utilities business and improvement are not known. There is rather much top down management and management by order. The heads of departments have to follow a given budget but have no formal rights and tools supporting their work and to great extent no incentives. Bonuses exist for one group of the personnel, those collecting money from the customers. If the collection department can collect more than 100% of current debts, the collectors will get 4% of the amount exceeding the current debt. No others have any bonuses or other incentives. The company signed a week before the Consultants data collection visit a collective agreement with the union, and there are some bonuses mentioned in that agreement, but in reality it will according to the director be difficult to follow this agreement due to the financial situation in the utility. 2.2.5 Staff. Efficiency and training needs The total number of personnel in the enterprise is now 356. (According to norms there should be 420.) The number of inhabitants connected to the water services and sewage system is constantly increasing, but is now 103100. The productivity in the water services is therefore around 290 consumers per employee. The number of customers connected to the water system is 36261 resulting in 102 customers per employee. The number of customers connected to the sewerage system is 30380 resulting in 85 customers per employee. The number of connections to the water system is approximately 8000 individual houses and 3100 apartment buildings plus approximately 900 companies and budget organizations, thus in total around 12000 connections resulting in a productivity of 34 connections per employee. Most of the heads of departments, engineers and specialists have an education in the right area for their work, often university degree. Low qualified people get on-the-job training in the company. People
rao1e 2005-01-17
SWECO INTERNATIONAL
working with computers have participated in relevant training and have also on-line support available from an IT-company. According to the Director there is presently no need for any training. The company has recently employed a few young persons graduated from the university 2006. The utility is interested in supporting training of the personnel but has no plan for training. Presently there is no need to employ any new persons beside two excavator operators. The average age of the personnel is some 45-46 years. The average salary in 2006 was 1566 leis per month. This causes difficulties to attract and keep qualified persons, and the personnel turnover is round 11%. As Ap-Canal-Bli is participating in World Bank financed project, they have experience from organizing and managing Mayor investment projects. 2.2.6 Estimation of Consumption. Billing and Collection The rate of population (private sector) with meters was in year 2006 54.45% (6884 meters). The rate of meters is increasing and was 49.6 in 2004 and 52.4 in 2005. The rate in condominiums is 100%. In the public sector the rate in 2006 was 91.3% (30519 meters). Also here the rate is increasing and was in 2004 88.0% and in 2005 90.0%. The customers buy and repair the meters on their own account. Consumption norms are used for customers without meters. The customers are to great extent reading their meters themselves. Apa-Canal has also 30 meter readers distributing bills and doing random checking of the meters. Metering and billing is monthly. The bills are distributed the 8th of each month, and should be paid before the end of the month. The customers can pay in banks and post offices.
rao1e 2005-01-17
SWECO INTERNATIONAL
The collection rate has developed as below: Year 2004 2005 2006 Category % % % Population 101,1 99,5 97,6 Budget institution 99,6 97,6 99,2 Other consumers 108,5 97,8 100,7 Total 104,0 98,6 99,1 Two explanations were given for collection rates higher than 100%. The accounting considers cash flow rather than transferring incomes and costs to the right period and sometimes payment of old debts influences the figures. This is the same for all utilities visited. 2.2.7 Relations to customers and other stakeholders Apa-Canal has a homepage for external information. Apa-Canal is also informing the customers through TV every third month, when customers also may have direct contact with per telephone or fax. The company uses also newspapers for information. There are also preliminary ideas to invite for instance school classes for information. There is no internal or external quality programme defining for instance issues such as quality of water and sewage service, quality of public relations, water demand management and environmental questions. 2.2.8 Consultants Comments The company has an integrated MIS. There is also a GIS. Both can be further developed. The rate of population (private sector) with meters was in year 2006 54.45%, which is low. Collection rate is good. The staff efficiency for water supply is 290 persons served (consumers) per employee, 102 customers per employee and 34
rao1e 2005-01-17
SWECO INTERNATIONAL
connections per employee. Although the number of employees is decreasing form year to year, this is still high and may be improved. Relations to customers and society may also be improved. The company has, as most of the utilities visited, close, maybe too close contacts with its owner. The roles of the owner and operator can probably be better defined and more separated for better use of each partys capacity. The personnel at all levels of the company could also be more efficiently used through introduction of principles of accountable management or management by objective. The utility is already participating in World Bank financed project. They have therefore experience from organizing and managing major investment projects. Although there are opportunities for further improvements of the institutional situation in Ap-Canal-Bli, the company is from institutional point of view qualified for continued participation in the project. Further comments, see section 15.
2.3
2.3.1
Socio-economic Aspects
Social Environment in Moldova In order to present a clear picture of the socio-economic situation of cities and raions and to allow the reader to understand the local particularities in the national context, the socio-economic analysis also contains a brief description of the socio-economic situation at national level. Number of population in Republic of Moldova as at 01.01.2007 represented 3581.1 thousands persons, including urban population 1478,0 and rural population -2103, 1 thousands persons. According to the inquiry performed on the labour market in the third trimester of 2006, the active population in Republic of Moldova economy represents more than 1484 thousand persons, registering a growth of approximately 1.65 %, when compared to the third trimester in 2005.
rao1e 2005-01-17
SWECO INTERNATIONAL
The unemployment rate (the percentage of unemployed persons per total active persons) registered a value of 5.4% at national level, less with 1.2 % than the third trimester in 2005. For men, the unemployment rate was 6.7% and for women 4.1%. The significant disparity between the urban unemployment rate (8.3%) and rural unemployment rate (3.3 %) is still maintaining.
Table 2.3.1 Evolution of Nominal Wages
Social indicators Nominal wage -annual nominal growth rate -annual real growth rate
MDL % %
2000 407.9 133.9 102.2
2003 890.8 128.8 115.4
2004 1103.1 123.8 110.1
2005 1318.7 119.5 106.8
2006 1695.4 128.6 114.1
Source: National Institute for Statistics
Regarding the nominal wage, it has increased 4.15 times during the period. Population revenues are mostly cash revenues, the average cash revenues representing 80.7% from the total available revenues, and 19.3% are represented by revenues in kind. For urban areas, cash revenues are representing 94.6%, compared to 68.1% in the rural area. 2.3.2 Estimation of Household Average Revenues The calculation of the household monthly revenue at local level is difficult to accomplish in most Eastern European Countries. The situation is similar in Moldova. Usually the National Commission for Statistics (or similar entity) calculates the average household revenues at national level without giving any values for county or local level. But, what can be identified at local level, in most of the cases, are the average salaries from different industries. Using these figures the level of household revenues can be approximated by adjusting the national average level with the ratio between the average salaries at local level and the average salaries at national level. Using the approach presented above, the estimation of average household revenues at local level was performed. The results of the analysis are presented in the one table for each town. 2.3.3
rao1e 2005-01-17
Economic environment in Moldova The macroeconomic indicators for period 2000-2006, for Republic of Moldova are presented in Table 2.3.2.
SWECO INTERNATIONAL
An important growth was recorded for GDP in the analyzed period, GDP in 2006 being 2.75 larger than the GDP recorded in 2006. Same situation was recorded also for GDP per capita, an increase of 2.79 being recorded, the population decreased during the period. In terms of real GDP, the real GDP is 3.11 larger than the real GDP recorded in 2000. Industrial output in 2006 is 2.72 larger than the one registered in 2000.
Table 2.3.2: Macroeconomic indicators evolution
Real sector Gross Domestic Product -Annual growth rate -GDP per capita -GDP per capita -Real GDP -Deflator Industrial output -Annual growth rate Agricultural output -Annual growth rate Capital investments -Annual growth rate Retail sales -Annual growth rate Services rendered to population -Annual growth rate Exchange rate Exchange rate (annual average) Exchange rate (end of the period)
Unit MDL mil. % MDL USD MDL mil. % MDL mil. % MDL mil. % MDL mil. % MDL mil. % MDL mil. %
2000 16019.6 102.1 4402.2 354.1 12580.3 127.3 8167.7 107.7 8268 96.7 1759.3 85 6012 104 2599.6 100.1
2004 32031.8 107.4 8889.6 721.1 29662.7 108 17591.1 108.2 11819 120.8 5140 108 16575 105.6 6970.4 105.3
2005 37651.9 107.5 10474.7 831.3 34434.6 109.3 20770.2 107 12688 100.8 7189.1 112 19487.7 105.3 8209.5 109.2
2006 44068.8 104 12291.9 936 39143.2 112.6 22243 93.1 13695 95.4 9580.4 117 23361 106.9 9567 101.6
MDL/USD MDL/USD
12.4333 12.3833
12.3283 12.4600
12.6003 12.8320
13.1320 12.9050
Source: National Bank of Moldova
Agricultural output did not record the same evolution; only a 1.65 increase was registered. Retail sales increased significantly during the 2000-2006 period, for approximately 3.88 times.
rao1e 2005-01-17
SWECO INTERNATIONAL
Services rendered to population increased considerably during this period, for 3.68. The National currency recorded a slight depreciation against the USD in the last years. 2.3.4 Special Economic Conditions To have a better view of the impact of water and wastewater service on all categories of inhabitants, the ideal case would be to identify more categories of consumers or at least to separate from the average of socially vulnerable cases. In this case, an affordability analysis of the social vulnerable cases is performed by considering the pensioners. In estimating the level of revenues for different categories of inhabitants a special attention was paid to the revenues from foreign countries. In most of the town of Moldova, an important segment of the inhabitants are working in foreign countries. These inhabitants are sending on regularly basis (monthly, quarterly, etc) money to their families from Moldova and these amounts have a significant impact on the household revenues. These amounts are difficult to identify. One possible solution would be to get statistical data from the local banks about the level of foreign currency sent in the region by the inhabitants working abroad (services like Western Union or similar). However, for the prefeasibility stage the Consultant did not succeeded to obtain such data in due time. Considering this lack of information, the consultant decided to use for the affordability analysis a conservative approach and not include these additional household revenues. 2.3.5 Social environment in Bli Municipality
2.3.5.1
Population
Number of population for Bli town as at 1st of January 2007 is the following:
Table 2.3.3 Population
Population Total Urban Rural Average number of population for 2006

rao1e 2005-01-17
(Thou.) 142.2 142.2 142.7
SWECO INTERNATIONAL
2.3.5.2
Education
Town educational system is formed of preschooler institutions, schools and a university. There are 36 preschooler institutions, out of which 5 special institutions. 5000 kids are prepared in these institutions. General medium education is performed by 23 schools, including 2 primary schools, 2 gymnasiums, 18 medium schools, in which a total number of 7,200 pupils are studying. In Bli town are located 7 schools of technical-professional orientation, medicine college, musical-pedagogical schools, technical and Alecu Russo university.
2.3.5.3
Estimation of Household Average Revenues
Table 2.3.4: Estimation of household revenues
Estimation of Household Revenues Average nominal monthly salary - National level Average nominal monthly salary Bli Municipality Disposable household income (national average per household member) Average monthly pension (national level) Average household disposable income in the county (per member) Average monthly pension at county level Number of persons in household Average household (no of persons) Pensioner household (no of persons) Average household disposable income in the county (per household) Average monthly pensioner household revenues at county level (per household) Lei Lei
Bli 2004 2005 1,103.1 1,318.7 1,302.7 1,501.4
Lei Lei Lei Lei
491.4 325.3 580.3 384.2
568.6 383.4 647.4 436.5
No. No. Lei Lei
3.0 1.8 1,740.9 691.5
3.0 1.8 1,942.1 785.7
rao1e 2005-01-17
SWECO INTERNATIONAL
2.3.6
Economic environment in Bli Municipality
2.3.6.1
Natural resources
Total surface of Bli Raion is 7,800 ha, including town Bli -4,142 ha, Sadovoe village -2,677 ha and Elizavetovca village -981 ha.
2.3.6.2
Local infrastructure
Total road length of the town has 220.7 km with a surface of 1,478.5 square meters. Most part of the roads is covered with rigid surface, out of which 105.3 km are asphalted. The town has 1,562 houses (26,918 apartments), out of which 1,003 houses are single levelled. Rest of the house are structured as following: five levels- 242 houses, two levels -162 houses, nine levels -70 houses and 85 houses with different levels, including a house with 16 levels. More than 85% from the apartments are privatized. In present, 26,479 apartments are connected to the gas network (100%). Total length of gas pipes is 144.27 km.
2.3.6.3
Economy
Bli economy consists in 7,600 economic agents with different organizational-legal structure. More than 90 % are small business.
2.3.6.4
Industry
Main industrial branch is represented by the alimentary industry. Light industry, heavy industry, energy industry have a relatively equal contribution. Other industrial branches are insignificant. Volume of industrial production in Bli Municipality compared to the total industrial production in Republic of Moldova is presented in the following table:
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 2.3.5: Volume of Industrial Production Evolution Bli Municipality
Volume of industrial production in 2006 Total out of which Bli
Current prices (mil. lei) 17533 1799.9
2004 Compared to previous year (%) 106.9 108.9
Current prices (mil. lei) 21123.5 2049.6
Total production on Republic of Moldova increased with 26% during the 2004-2006 periods. For Bli Municipality, the production increased with 14% in 2005 and with 12% in 2006, as the local economy improved.
2.3.6.5
Financial Performances
Financial situation of Commercial Companies in Bli Municipality, compared to the total financial situation of Republic of Moldova, is presented in Table 2.3.6.
Table 2.3.6: Financial Status of Commercial Companies
Financial status Number of reporting enterprises, out of which Profitable enterprises Enterprises with loss Average Number of employees Financial result before tax (profit/loss) -mil. Lei Sales revenues-mil. Lei Receivables related to commercial invoices and budget compensation total, mil. Lei Debts -mil. Lei
Jan.-Sept. 2004 Total Bli

29423 11289 13906 572786 2790 53031 19140 61291 1092 561 475 31891 151.9 3130.4 722.4 2216

31870 12380 14893 570143 3424 66870 22717 68420 1252 647 528 32694 199.1 3772.3 876 2467.6

34700 13155 16532 569698 3689 79052 26867 81804 1492 716 681 33255 205.5 4241.7 1037.4 2948.9
rao1e 2005-01-17
As can be observed from the table above, the number of profitable enterprises at national level increased, but the percentage of profitable enterprises in total reporting enterprises remains approximately the same (46%). For Bli Municipality, the same
SWECO INTERNATIONAL
situation was recorded, the percentage of profitable enterprises being approximately 51%. Average number of employees at national level kept a stable trend. In Bli Municipality, during the analyzed period, the average number of increased with 4% Financial result before tax recorded positive value in period analyzed and registered a considerably growth of 35%. Sales revenues increased in 2005 (20% compared to 2004) and in 2006 also (12% compared to 2004). Receivables related to commercial invoices and budget compensation recorded a stable growth of approximately 20% each year. During the analyzed period, debts recorded an increase of 33% in 2006, compared to 2004.
2.4
2.4.1
Financial Aspects
Introduction The scope of this study is to assess the financial status of the Water Operator in order to see if it can be included in the list of cities that will receive financing from the World Bank loan for infrastructure investments. The information on historical financial statements, management accounting costs and revenues, tariff evolutions and financial management procedures were obtained from the utility directly or via the World Bank Project Implementation Unit. Extensive discussions with all involved stakeholders were conducted during the analysis process as follows: Answers to the questionnaire prepared by the WB PIU; Discussions with the management team and specialists from the financial department; Discussions with the representatives of the local authorities;
rao1e 2005-01-17
SWECO INTERNATIONAL
Statistical data from the National Institute for Statistics for the period 2002-2006; A set of ratios is calculated for the decision process of selection of the 10 towns for the feasibility study out of the pool of 15 towns subject of analysis. The comparison of ratios and the decision process is performed in the final section of the report (Recommended Towns for Preparation of Feasibility Studies). 2.4.2 Analysis of the historical financial performances In order to obtain a clear picture of the financial status of the company, we have briefly analyzed the financial statements for the years ended at December 31, 2004, December 31, 2005 and December 31, 2006.
2.4.2.1
Analysis of the operating activity
The operational performance of the utility for the last three years reflects both evolutions of physical production and tariff adjustments. A detailed situation of the operating results is shown in the Table 2.4.1.
Table 2.4.1: Operating result evolution Bli
Operating result for the year Amounts in thou. USD Operating revenues Sales Revenues from services Other revenues Operating costs Material expenses Third parties services Personnel expenses Salaries Social insurance taxes Other costs for water and sewerage Depreciation Energy cost Costs related to other activities Operating result
Source: Water Utility from Bli
rao1e 2005-01-17
2004 2,941.8 2,730.5 211.3 3,109.2 990.0 149.8 527.6 404.3 123.2 141.0 300.6 1,000.3 (167.4)
2005 2,693.4 2,450.6 242.8 3,117.9 868.4 106.0 546.4 423.7 122.7 356.1 268.9 972.0 (424.5)
2006 2,642.3 2,421.3 221.0 2,739.0 586.2 140.0 633.6 495.4 138.2 232.3 242.0 904.9 (96.7)
SWECO INTERNATIONAL
In 2006, approximately 70% of the operating revenues result from water supply and 30% from wastewater operations. The total operating result is negative for the entire period of analysis with an improvement tendency in 2006. The evolution of the structure of operating revenues is presented in Figure 2.4.1. As can be observed, in 2006, revenues from water are double, when compared to revenues from wastewater services. The level of non-revenue water is important and the utility will try to decrease the losses in the following years. One of the main purposes of the investment promoted with financial resources from The World Bank loan is to decrease the water losses.
Figure 2.4.1.: Structure of Sales - Bli
Structure of Sales
1,800.0 1,600.0 1,400.0
Thousand USD/year
1,200.0 1,000.0 800.0 600.0 400.0 200.0 2006 Water Wastew ater
The evolution of invoiced quantities is presented in the following table:

Table2.4.2 The Evolution of Invoiced quantity 2004-2006 Bli
Evolution of invoiced quantity Water Inhabitants Private companies and institutions Waste water Inhabitants Private companies and institutions
2004 Th. m3 3,533.7 2,117.0 1,416.7 3,250.6 1,867.6 1,383.0
2005 Th. m3 3,454.5 2,193.7 3,264.0 1,951.0 1,313.0
2006 % Th. m3 -2.2% 3,323.1 3.6% 2,176.0 1,147.1 3,239.1 1,995.7 1,243.4 0.4% 4.5% -5.1% % -3.8% -0.8% -9.0% -0.8% 2.3% -5.3%
1,260.8 -11.0%
rao1e 2005-01-17
SWECO INTERNATIONAL
The water consumption slightly decreased in the last years mainly as result of decrease of water delivered to companies and institutions. In the last years, the evolution of water production delivered to companies and institutions of is the result of the poor economic situation of companies and public institutions. The weight of water delivered to companies and institutions is low (represents only 34% in total invoiced water). The level of tariff for companies and institutions is the same as for domestic customers. The delayed adjustment of tariff compared with the cost increases had a negative impact on the performances of the water utility. The water utility can not control the tariff adjustment process, which is the prerogative of the Local Council. The water utility can propose tariff increases based on cost increase but the final decision is taken by Local Council. The evolution of the structure of total operating costs is presented in Figure 2.4.2:
Figure2.4.2: The Structure of Operating Costs - Bli
Structure of operating cos ts
35.0%
33.0%
E nergy
P ersonnel (salaries and related taxes) D epreciation
O ther costs
8.8%
23.1%
rao1e 2005-01-17
The most important cost elements are other costs, which represents 36% of operating expenditures in 2006 and personnel costs (wages, salaries and related taxes), which represents about 33% of operating expenditure in 2006. The weight of energy costs was relatively constant in the last years.
SWECO INTERNATIONAL
The salaries have increased in nominal terms every year. The increase of salaries has to be performed based on premises stipulated in the law regarding evolution of salaries in the public sector. The number of personnel has slowly increased during this period. The evolution of operating costs is presented in Figure 2.4.3. The evolution of operating costs highlights the prudent policy regarding expenditures in the last years due to lack of financial resources. Only personnel costs have increased during the period under analysis. Energy costs and other costs decreased.
Figure 2.4.3: Evolution of operating costs - Bli
Evolution of operating cos ts
1,400.0 1,200.0 Thousand USD/ye 1,000.0 800.0 600.0 400.0 200.0 E nergy P ersonnel (salaries and related taxes) O ther costs 2004 2005 2006
2.4.2.2
Analysis of balance sheet items
A breakdown of the account receivables is shown in the following table:

Table 2.4.3: The Level of Account Receivables as at December 31, 2006 - Bli
Account Receivables <3 Months Between 3 months and 1 Year > 1Year Total
rao1e 2005-01-17
31.12.2006 USD % 61,961 9.5% 156,765 24.0% 435,509 66.6% 654,235 100.0%
SWECO INTERNATIONAL
The management of the company needs to have among its priorities the increasing of the collection level. In the current conditions, it is important to maintain the level of the outstanding debt at low levels (at least to maintain this level constant) to be able to generate sufficient cash to pay the current obligations. This is essential for a sound development. The level of short term liabilities kept a stable evolution. However, level of short term liabilities is relatively high, when compared to the level of account receivables. A breakdown of the short-term liabilities is presented in the following table:
Table 2.4.4: Evolution of short-term liabilities (amounts in Thousand USD) - Bli
Evolution of liabilities Short-term liabilities Account payables Personnel Social Insurance Taxes Liabilities to the budget Other liabilities
2004 2,014.4 1,940.6 58.4 6.8 7.3 1.2
2005 2,075.7 1,982.3 55.8 7.7 27.7 2.2
2006 2,030.8 1,930.8 49.6 14.6 32.8 3.0
Table 2.4.5: Aging of account payables - Bli
Account Payables <3 Months Between 3 months and 1 Year > 1Year Total
31.12.2006 USD % 387,308 20.1% 699,783 36.4% 835,492 43.5% 1,922,583 100.0%
The Operator has important historical liabilities to the electricity company and the former operator of the Soroca Bli Aqueduct. The Company hopes that these historical liabilities will be written off by a Governmental Decision. The aging of the liabilities to the social fund is presented in the following table:
Table 2.4.6: Aging of liabilities to social fund - Bli
rao1e 2005-01-17
31.12.2006 USD % 14,552 100.0% 0.0% 0.0% 14,552 100.0%
SWECO INTERNATIONAL
The aging of the liabilities to the state and local budgets is presented in the following table:
Table 2.4.7: Aging of liabilities to state and local budgets - Bli
31.12.2006 USD USD 0.0% 32,830 100.0% 0.0% 32,830 100.0%
2.4.2.3
Tariff analysis
Historically, tariff levels have been effectively imposes by the Ministry of Communal Services and Territorial Development. Because of the institutional restructuring and decentralization, the utility may increase the tariffs without the approval of the central authorities but with the approval of the local authorities (municipality) and ANRE. The domestic tariff level is calculated based on the total cost per cubic meter plus a profit allowance (between 5-10%). Changes would be applied following significant increases in costs, mainly electricity. The evolution of invoiced quantity, the increase of prices for energy and the increase of salaries should have been the main factors affecting the evolution of tariffs. The tariff evolution of the water tariffs for the last years is presented in the following chart:
Figure2.4.4: Water Tariff Evolution - Bli
Water average tariff evolution
0.50 0.45 0.40 0.35 Domestic customers Instutions 0.45 0.45 0.45
0.45
0.45
0.45
0.44
0.44
0.44
USD/m3
0.30 0.25 0.20 0.15 0.10 0.05 2004 2005 2006
Commercial customers
rao1e 2005-01-17
SWECO INTERNATIONAL
Tariffs for domestic customers are the same used for institutions and domestic companies. The tariffs remained the same during the period under analysis The tariff evolution of the wastewater tariffs for the last years is presented in Figure 2.4.5. Tariffs for domestic customers are the same used for institutions and domestic companies. The tariffs remained the same during the period under analysis in nominal terms, the chart showing a decrease to the fact that the local currency has depreciated.
Figure2.4.5: Sewerage Tariff Evolution Bli
Sewerage average tariff evolution
0.80 0.70 0.60 0.50 0.76 0.76 0.63 0.63 0.57 0.57 D estic om custom ers
USD/m
0.40 0.30 0.20 0.10 0.10 2004 2005 2006 0.05 0.05
P ublic Institutions
C m om ercial custom ers
For the future the utility should consider the possibility and to take all the necessary actions to adjust the tariff more often to avoid the negative effects of the cost increases due to the inflation. In the future the water utility will have to cover also the possible debt service related to the loan from the World Bank. Briefly, the methodology for approving tariffs consists of the following steps: The utility specialists are preparing a study for tariff adjustment The study is sent to the Local Council and ANRE for approval.
According to the management team of the utility, the level of approved tariff is usually lower than their request.
rao1e 2005-01-17
SWECO INTERNATIONAL
The management team considers that a tariff increase will solve most of the financial problems of the utility.
2.4.2.4
Financial management
Financial management is still far from the requirements of a modern utility. A lack of skills and human resources leads to limitations in the activities performed by the Finance Department. The financial management is limited to good management of payments, and is unable to give effective support to the overall management decision-making process, particularly the good management of the growth potential. Without minimizing the technical and implementation problems that the utility has to face in the near future, the financial planning area is most in need of enhancement and restructuring efforts. We recommend the introduction of cost accounting by creating cost centres for the main activities (water and sewerage). There is important to find out the performances of each sector. We recommend the extensive use of computer for financial management. Accounting, billing and collection, financial forecast are just a few items which can be performed more efficient by using a computer. Even if the utility has only one computer, its degree of usage is still very low. The process of financial planning does not include all the parties that should be involved with financial planning matters and has not the necessary prediction-correction role. The management team of the utility has to prepare a long-term strategy to assure the sustainable development. This analysis can be used as a starting point in preparing this strategy. Without a clear strategy for sustainable development of the activity, the utility continue to survive but with very limited potential and lower and lower performance. 2.4.3
rao1e 2005-01-17
Financial Selection Criteria In order to have a clear selection mechanism of the cities that will receive financing, the Consultant identified 4 selection criteria:
SWECO INTERNATIONAL
Level of historical liabilities to suppliers, social fund, state and local budget. The ratio represents the weight of historical liabilities in total operating revenues. Tariff adjustments. The Consultant identified 2 sub-criteria: o o The date of last tariff increase; The frequencies of tariff increase;
Level of operating ratio calculated as operating revenues divided by operating costs. Level of collection period calculated as account receivables divided by sales x 365 days.
The detailed scoring mechanism for each selected criteria is presented in details in chapter Recommended Towns for Preparation of Feasibility Studies. By applying the criteria mentioned above, the scores obtained by the water Operator from Bli are presented in the following Table:
Table 2.4.8: Scores for the Water Utility from Bli
Historical liabilities Liabilities to Suppliers, Social Fund and State of Local Budgets Total Operating revenues Weight of Liabilities in Total Revenues Number of points Tariff adjustment Last tariff adjustment was in January 2006 In the period 2004-2007 there was only 1 tariff adjustment Total Operating ratio Operating revenues Operating profit Operating revenues/operating costs Points Account receivables collection period
rao1e 2005-01-17
2006 USD 2,030,756 2,642,350 76.9% 2 Points 4 1 5 2006 USD 2,642,350 2,739,004 0.96 4 2006 MDL 8,443
Trade receivables(A)
SWECO INTERNATIONAL
Historical liabilities Sales (B) (A/B)*365- days Points Total points
2006 USD 31,797 97 6 17
The results are analyzed in the final conclusions chapter where the decision regarding the introduction of Bli in the 10 list towns is analyzed.
2.5
2.5.1
Technical Aspects
Specific Objectives Related to technical Analysis The specific tasks related to technical analysis for the Pre-Feasibility Phase were clarified together with the Client in the beginning of the assignment. The tasks agreed were as follows: To prepare water and wastewater balances for 15 target towns to describe the present situation and water and wastewater projections for the year 2013; to assess the present status and condition of present water supply and sanitation facilities in 15 target towns in order to evaluate the need for replacements and/or needed rehabilitation on short-term basis; and to prepare preliminary short-term investment program for years 20092013 for the 15 target towns in order to improve ad develop the present functional level of their water supply and sewerage services.
2.5.2
Water supply and sewerage in Bli Water supply network is divided into two (2) separate networks. Some 103,000 inhabitants out of 142,200 inhabitants are connected to the water supply network while more than 39,000 inhabitants are dependable on private wells. Water is supplied to Bli from water treatment plant (WTP) from town of Soroca via 70 km long pressure pipeline. Water source for Soroca
rao1e 2005-01-17
SWECO INTERNATIONAL
WTP is surface water from River Dniester water intake being situated some 5 km upstream from the town of Soroca. WTP and 70 km long pipeline between Soroca and Bli are not property of Bli Apa-Canal but are owned and operated by the state owned enterprise AcvaNord. There are totally 60 deep wells with total capacity of 38,640 m3/day situated within town area. Deep wells are used as reserve source for water intake in case if water supply from Soroca WTP is somehow stopped. Water is chlorinated at underground tanks (situated in town centre of Bli) which are used to storage and buffer the water flow delivered from Soroca. In total the water supply system has 19 underground tanks with total capacity of 40,300 m3 and 21 pumping stations for maintaining the necessary pressure in network. The total length of main sewerage network is some 138 km. Sewerage network has six (6) pumping stations. According to ApaCanal some 103,000 inhabitants out of 142,200 are connected to sewerage network while rest is using septic tank system or dry lavatories. However, the number of septic tank users is not known. The wastewater treatment plant (WWTP) represents complete biological treatment process. At present the treatment plant is in use and is working satisfactory. In the following sections the water and wastewater balances and the technical status of water supply and sanitation facilities as well needed investments on preliminary level have been described in detail. 2.5.3 Water Supply System
2.5.3.1
Present System
Water is supplied via 70 km long pressure pipeline (two (2) parallel steel pipelines with size of DN1000-DN1200) to Bli from WTP located in town of Soroca. Source of used water for WTP is surface water from River Dniester water intake being situated some 5.0 km upstream from the town of Soroca.
rao1e 2005-01-17
SWECO INTERNATIONAL
In Bli, water is first received into two (2) separate water reservoirs (6,000 m3 each, 12,000 m3 in total) which are placed in the town centre of Bli. From reservoirs water is pumped to distribution network. 60 existing deep wells (capacity of 38,640 m3/day in total) are used as reserve to be taken into operation in case if water delivery from WTP in Soroca will somehow be stopped. However, still until 2006 the water was supplied only from deep wells and from beginning of year 2007, the water has been supplied from Soroca WTP. Approximately 103,000 inhabitants are currently connected to the water supply network while more than 39,000 inhabitants are dependable on private wells. The water supply system has 19 underground water tanks with total capacity of 40,000 m3 and 31 pumping stations for maintaining the necessary pressure in the network out of which 25 are in use. Nine (9) pumping stations have been renovated in 2006-2007 (two (2) more will be renovated until end of year 2007) and are equipped with new WILO pumps as follows: PS Copaceanca, WILO NP, 4 units of 200 m3/h; PS Str Gagarin, WILO, 1 unit, 25 m3/h; PS Psychon.hospital, WILO COR, 1 unit, 16 m3/h; PS str.Veteranilor, WILO COR, 1 unit, 16 m3/h; PS str.Suceava, WILO COR, 1 unit, 16 m3/h; PS str.Konev, WILO, 1 unit, 30 m3/h; PS str.Bulgar, WILO COR, 1 unit, 33 m3/h; PS str.Decebal, WILO MVI, 1 unit, 8 m3/h; and PS str.Konev, WILO MVI, 1 unit, 32 m3/h.
16 pumping station have old Moldavian or Russian made pumps and have not been renovated for more than 30 year. The water in Bli is treated with chlorine at the chlorination plant situated by the main reservoirs (2 x 6,000 m3). Dilution and dosage of chlorine solution is made by two Moskva-type equipment. The average quantity of chlorine used for treatment is 50 kg/day. In addition to that there is chlorination of water in use at pumping station Baltul Nou in where dilution and dosage of chlorine solution is made manually to reservoir of pumping station. Used amount of chlorine has been 15 kg/day on average.
rao1e 2005-01-17
SWECO INTERNATIONAL
At present, the quality of water delivered from Soroca treatment plant correspond to Moldovan Normative on Potable Water (see 2.5.1).
Table 2.5.1: Analysed water quality. Data is provided by town of Bli.
Parameter Unit Requirement Actual Colour grade 20 14.3 Turbidity mg/l 1.5 0.8 Door grade 2 2 Taste grade 2 2 pH 6.5-8.5 7.8 Hardness Mol/l 7 5 Dry residuals mg/l 1,000 318 Nitrites mg/l 45 0 Chlorides mg/l 350 30 Sulphates mg/l 500 105 Fe mg/l 0.3 0.3 Ammonia mg/l 2.0 0 Coli form bact/l 3 <3 Water distribution network consists of steel, cast iron and polyethylene pipes. The range of diameters is from 50 mm to 200 mm. The total length of network is 236 km. Different lengths of used pipeline materials and age of the network have been presented in Table 2.5.2.
Table 2.5.2: Water Supply Network in town of Bli.
DN Steel 50-100
< 10 years 1.1
10-20 years 2.8 6.9 5.0 14.7 0.9 1.1 0.4 2.4
Km 20-30 years 6.7 5.7 6.8 4.8 24.0 12.9 7.9 7.0 27.8
30-40 years 1.8 8.9 8.7 5.4 24.8 19.5 34.9 8.4 62.8 2.0 2.0
< 40 years 8.7 2.2 2.7 13.6 26.3 20.6 2.5 49.4 3.2 3.2
TOTAL 21.1 24.8 23.5 10.2 79.6 59.7 64.9 18.3 142.9 5.2 5.2
rao1e 2005-01-17
150-300 1.1 350-600 0.3 800-1000 Sub-Total 2.5 Cast iron 50-100 0.1 150-300 1.4 350-600 Sub-Total 1.5 Asbestos 100-250 Sub-Total Reinforced concrete
SWECO INTERNATIONAL
DN
< 10 years
10-20 years
800 Sub-Total Polyethylene 100-200 2.0 Sub-Total 2.0 TOTAL 6.0
Km 20-30 years 4.6 4.6
30-40 years
< 40 years
TOTAL 4.6 4.6 3.5 3.5
1.5 1.5 18.6 56.4 89.6 66.2
235.8
2.5.3.2
Conditional Analysis of Water Supply System
In 2006, Bli Apa-Canal received a credit from the World Bank (3.5 million USD) which will be used to renovate 10 pumping stations (old pumps and valves and pipelines at pumping stations will be replaced with new centrifugal pumps (manufacturer; Wilo) and supporting systems, eight (8) pumping stations already renovated in 1006-2007) and 22 km of main water distribution pipelines (11 km of main pipelines renovated already in 2006-2007). Renovation works are still ongoing and will be finished by the end of year 2007. In General, within pumping stations which are not renovated in 20062007 most of centrifugal pumps and other mechanical equipment are in a very poor condition. Most of the mechanical parts are worn out and old pumps are working at a decreased efficiency rate. Existing chlorination plant is in a poor condition and used machinery for chlorination is worn out. Regarding the condition of existing network has Bli Apa-Canal reported several problems with old pipes. Reported problems have been presented in the Table 2.5.3.
Table 2.5.3: Reported problems within Bli water distribution network.
DN 50-100 150-300 400-600 Total

rao1e 2005-01-17
Water pipes Bursts 1,470 1,000 260 2,730 Fissures 430 230 20 680 Spills 80 80 At flanges 94 74 7 175
Valves At sealing rings 157 161 14 332
Total 2,230 1,465 301 4,000
SWECO INTERNATIONAL
Reported (by Apa-Canal) unaccounted water losses in 2006 were 3,600,000 m3 (52% from the water volume pumped to the distribution). Still, according to the study elaborated by Technical University of Moldova in 2005, the total amount of unaccounted water within service area of Bli Apa-Canal is only 33 %. The main cause of water losses are often bursts in water network due to wear of the pipes. Most of the bursts appear in the network of the consumers (up to the metering devices), and the water losses are attributed to Apa-Canal. These happen due to the fact that most of consumers are connected to the network without installation of the chambers for the metering devices at the connection point and without installation of the closing valves. Together with renovation of the existing network the main focus shall be paid in extension of network in order to provide water supply for more inhabitants.
2.5.3.3
Operational Analysis of Water Supply System
The town of Bli is supplied with water 24 hours per day. The average quantity of chlorine used for treatment is 65 kg/day including 15 kg/day used at pumping station Baltul Nou. All pumping stations work in automatic mode; most of PSs are operated permanently to maintain the needed pressure in the network. Currently the water supply network is divided into two (2) pressure zones as follows: - New Bli currently supplied from several deep wells, but will be connected in 2007 to water pipeline from town of Soroca; and - Town of Bli supplied from the reservoirs of water received from town of Soroca. Apa-Canal has plans to renovate existing network so that it will be divided into several different pressure zones. However, there are no decisions made regarding needed investments to divide the network into several pressure zones. Currently the pressure in town water supply network has been between 2-6 bars.
rao1e 2005-01-17
SWECO INTERNATIONAL
Beginning of year 2007 there were 6,884 household-meters installed for private houses, and 30,519 in budget institutions and business entities. The rate of metering is presented in Table 2.5.4.
Table 2.5.4: Metering rate in Bli.
Rate of population metered, % Private Sector Public Sector Associations of householders
2004 49.6 88.0 100.0
2005 52.4 90.0 100.0
2006 54.45 91.3 100.0
All private apartment meters are size of DN 15 while size of meters installed at institutions and organizations vary from DN 15 to DN 50 depending on connection diameter. The Table 2.5.5 shows the energy consumption of water supply system in 2006.
Table 2.5.5: Energy consumption of water supply system in Bli, year 2006.
Energy consumption, KWh Artesian wells Pumping stations level II Pumping stations level III
2004 7,262,800 4,554,700 987,850
2005 7,048,000 4,919,500 1,053,500
2006 6,699,300 5,078,100 1,085,500
2.5.4
Sewerage System
2.5.4.1
Present System
The main sewerage network have the length of some 130 km and consist six (6) pumping stations out of which one (1) is the inlet pumping station for the WWTP. WWTP is located some 2 km south from the town centre. Approximately 103,000 inhabitants out of 142,200 are currently connected to sewerage network while rest is using septic tank system or dry lavatories. However, the number of septic tank users is not known. WWTP, constructed in 1971, has a design capacity of 60,000m3/day and consists the following treatment units:
rao1e 2005-01-17
SWECO INTERNATIONAL
Horizontal grit chambers with mechanical screens; Primary sedimentation tanks; Aeration tanks; Sludge fermentation tanks; Secondary sedimentation tanks; Sludge pumping stations; Sludge disposal site; Chlorination plant; and Contact stabilization tanks.
The wastewater treatment plant represents complete biological treatment process. At present the treatment plant is in use and quality of discharged wastewater is reasonably good.
2.5.4.2
Conditional Analysis of Sewerage System
The main sewerage network is from the years 1960-1970s and has not been renovated during past 30 years. The main materials used are asbestos, ceramics, cast iron and reinforced concrete. Description of the sewerage network has been presented in the Table 2.5.6. Total length of sewerage network is 138 km, including pressure pipelines of 8.0 km.
Table 2.5.6: Description of the Sewerage network.
Material Ceramics Cast iron DN 100-200 250-500 Sub-total 80-200 250-300 600 Sub-total 100-200 250-400 500-600 Sub-total 500-600 800-1000 1500-1600 Sub-total <10 years 0.9 0.9 0.7 0.7 0.6 0.6 10-20 years 6.9 3.2 10.1 2.4 0.2 0.1 2.7 2.7 1.4 0.8 4.9 1.4 0.1 0.9 2.4
km 20-30 years 6.9 3.5 10.4 2.5 1.5 2.0 2.0 2.3 3.5 5.8
30-40 years 8.3 5.2 13.5 4.8 0.1 4.9 0.7 5.5 1.0 7.2 2.6 3.9 6.5
>40 years 16.8 7.0 23.8 1.7 1.7 2.0 9.7 1.3 13.0 2.4 7.1 9.5
Asbestos
Reinforced concrete
rao1e 2005-01-17
TOTAL 39.8 18.9 58.7 12.1 0.2 0.2 11.5 8.0 16.6 3.1 27.7 8.7 11.1 4.4 24.2
SWECO INTERNATIONAL
Material Steel DN 80 200-300 500-600 1200 Sub-total 200-400 1000 Sub-total 150-200 Sub-total 1000 Sub-total 200 Sub-total <10 years 3.7 3.7 10-20 years 0.1 0.9 1.0
km 20-30 years 0.1 0.3 0.2 0.6 5.2 0.7 5.9 0.5 0.5 0.6 0.6
30-40 years
>40 years
0.3 0.3
Pressure, Steel Pressure, Cast iron Pressure, Reinforced concrete Pressure, Polyethylene
1.0 1.0
TOTAL 0.1 0.4 4.8 0.3 5.6 5.2 0.7 5.9 1.0 1.0 0.5 0.5 0.6 0.6
The existing sewerage network (excluding pumping stations) could be considered to be in reasonable good condition. However, within this study any conditional analysis has not been carried out and it could only be estimated that at least proper flushing of pipelines and emptying of manholes will be needed. Still, the sewerage network doesnt cover the whole town and only some 72 % of inhabitants are currently connected to the sewerage system. In order to provide proper sanitation services the first priority regarding sewerage system would be enlargement of the network to cover more water consumers. In General, all mechanical equipment within six (6) existing sewerage pumping stations are in a very poor condition. Most of the mechanical parts are worn out and old pumps, valves and pipelines are at the end of their operational lifetime. In addition to that there is no adequate monitoring for operation. The inlet pumping station of WWTP is also in a poor condition. Works to construct the new inlet pumping stations have been started in 1980s but were newer finished. The unfinished building (only structures) is located at WTP near the existing inlet pumping station. Instead of renovation of existing inlet pumping station, it could be recommended to complete the construction of unfinished pumping station and use it in the future as inlet pumping station for WWTP.
rao1e 2005-01-17
SWECO INTERNATIONAL
The existing WWTP is in a satisfactory condition but needs also some urgent renovations. Structures of primary clarifiers, aeration tanks and secondary clarifiers could be considered to be in a good condition. Still, all mechanical equipment and metal structures are worn out and need to be replaced. Existing grit removal and screening should be totally renovated. In addition to that machineries within sludge pumping stations and blower building should also be upgraded. Used sludge drying beds (22.2 ha in total) were constructed in 1985 to provide more space for sludge handling. However, construction was carried out without proper design and for example drainage system is missing. At the moment sludge trying beds are not working properly and act as storage basins for sludge which is removed from the treatment process. Chlorination is used as tertiary treatment of wastewater. Dilution and dozing of chlorine solution is carried out using Moskva-type equipment (2 units, one (1) duty and one (1) standby) with a capacity of 19,7 kg/h (one unit). The problems related to the liquid chlorine treatment are most related to the safety as the chlorine is toxic gas. According to Apa-Canal of Bli there is existing design for a new WWTP, which has been planned to be situated at some 22 km south from the town. The construction works were even started in 1981, but stopped in 1983 due the lack of funds. There is no collector to the new WWTP and during this study the conditional analysis of existing structures of this WWTP were not carried out. It shall be noted that within this study only visible conditional analysis were carried out and proper analysis of existing structures would be needed during next project phase.
2.5.4.3
Operational Analysis of Sewerage System
Sewerage pumping stations works in the automatic mode. The wastewater volume received at WWTP in 2006 was 3,239,000 m3 including wastewater from private households some 1,996,000 m3 from business utilities some 974,000 m3 and from institutional users some 270,000 m3. The effluent quality in 2006 is presented in the Table 2.5.7.
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 2.5.7: The effluent quality at Bli WWTP in 2006.
Parameter SS COD BOD5 Chlorides Ammonia Nitrites Nitrates Fe
Unit mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l
Inlet After concentration treatment 214 13.6 194 49 130 9.2 187 167 27.1 1.43 NA 0.97 NA 26.8 1.73 0.32
Requirement 5 30 3.0 300 0.5 0.08 40 0.5
Reported effluent wastewater quality meets the normally used European standards, but not the Moldovan Norms. Reported SS reduction has been 94 % and BOD5 reduction 93 % while ammonia reduction 95 %. Due the fact that WWTP is only in satisfactory condition and not operated properly test result indicates that the used method for taking samples from the effluent wastewater is most probably insufficient and real reductions could be on lower level than reported. There are two (2) methane tanks constructed for treatment of sludge. However, tanks have never been operated are currently deteriorated. Sludge is currently stored on sludge drying beds without any other treatment. Pumps and valve used at sewerage pumping stations and at WWTP inlet pumping station are 20-30 years old and at the end of their operational lifetime. Also used machinery at WWTP is worn out and should be totally replaced. Energy consumption for operation of sewerage system is presented in the Table 2.5.8.
Table 2.5.8: Energy consumption of sewerage system, year 2006.
Energy consumption, KWh WWTP Sewerage pumping stations
2004 2,881,000 879,000
2005 3,230,000 1,062,000
2006 3,046,000 1,018,000
Total energy consumption of sewerage operations in 2006 was 4,064,000 KWh.

rao1e 2005-01-17
SWECO INTERNATIONAL
2.5.5
Prioritizing of needed Investments for years 20092013
2.5.5.1
Preliminary Water and Wastewater Projections for 2013
In order to prepare preliminary water demand and wastewater projections the water and wastewater flows were analyzed for the last three (3) years (20042006). Preliminary water demand and wastewater projections for the year 2013 are based on general assumptions as follows: - The connection rate to the water supply network is 90 %; - Per capita consumption in Bli in 2013 is 150 litres/capita/day; and - The connection rate to the sewerage system is 80 %. In addition to above mentioned, some assumption related to rehabilitation of the water supply network were made as follows: - Due repairing and maintenance work and installation of new pipelines for new housing areas the amount of leakages from the water supply network have estimated to decrease some 30 %; - Due installation of new in-house flow meters and due better accounting system amount of unaccounted water is estimated to decrease some 20 % (billed water demand per capita will increase); and - Due better in-house flow measurement and possible increase in water tariffs per capita consumption has estimated to decrease some 15 %. Preliminary water and wastewater flow projections for Bli are summarized below in Table 2.5.9.
Table 2.5.9: Water and wastewater projections for year 2013.
Bli
Population connected to the Water Supply network Population connected to the Sewerage network Water pumped to the Distribution Non-Revenue Water
rao1e 2005-01-17
Year 2006 Year 2013 Value Unit Value Unit 103,000 capita 128,000 capita 103,000 capita 114,000 capita 18,973 m3/d 19,200 m3/d 184 52 % 96 22,329 217 l/cap/d % l/cap/d m3/d l/cap/d 150 27 % 41 22,800 200 l/cap/d % l/cap/d m3/d l/cap/d
Average total flow to WWTP
SWECO INTERNATIONAL
2.5.5.2
Needed Investments
Investment need estimations are done for the period of years 20072013 in order to secure sufficient operation of water supply and sanitation systems and to provide water supply and wastewater treatment for more inhabitants in Bli. Short-term investments needed for water supply system are listed below, and serves as a basis for the proposed investment packages: - Rehabilitation of network which is in critical condition (60 km); - Construction of new network including water meters for new consumers for at least 20,000 inhabitants (> 40 km); - Procurement of leak detection equipment; - Renovation of pumping stations; - Renovation of existing reservoirs; and - Installation of new chlorination equipment to secure the quality of pumped water to distribution. In general, both sewerage network and WWTP require urgent rehabilitation and reconstruction works to enable reliable operation of the network and to fulfil the treatment requirements set by Moldovan authorities. The investments needed for sewerage system are listed below, and serves as basis for the proposed investment packages: Flushing of existing sewerage network; Enlargement of the network to cover 90% of the population; Renovation of district and WWTP inlet pumping stations; Construction of two new sewer pressure pipelines from the Main Pumping Station up to the WWTP; Complete renovation of technological pipelines, pumps and metal structures at WWTP; replacement of mechanical screens and air blowers; and Reconstruction of sludge drying beds.
2.5.5.3
Proposed Investment Packages
rao1e 2005-01-17
Preliminary cost estimations for proposed investments packages within water supply and sanitation services are only preliminary estimations and will only be used as help in preparation of suitable investment packages in Feasibility Phase of the project.
SWECO INTERNATIONAL
Proposed investment packages have been prepared so that there are two different packages; 1st investment package for works which shall be carried out in the very near future (within 1-2 years) and 2nd investment package for other works which must be implemented in order to secure the water and sanitation operations in long term: 1st Investment Package: 2.4 million USD in total Purchasing of new chlorination equipment and leak detection equipment, 0.1 million USD; Renovation of 7 water supply pumping stations + 7 km of water supply network, 1.0 million USD; Renovation of 5 sewerage pumping stations + WWTP inlet pumping station, 0.55 million USD; and Renovation mechanical equipment within WWTP including fine screening, grit removal and aeration, 0.75 million USD
2nd Investment Package, 16.0 million USD in total Renovation of WWTP (others that which are included with 1st investment package), 3.0 million USD; Renovation 13 water supply pumping stations and 13 km of water supply network, 2.0 million USD; Rehabilitation of 40 km of water supply network and construction of 40 of new water supply network, 8.0 million USD; and Renovation and/or construction of 30 km of sewerage network, 3.0 million USD.
rao1e 2005-01-17
SWECO INTERNATIONAL
3
3.1
Cahul
General
Cahul Town is situated on the bank of river Prut, at a distance of 175 km from Chisinau.
Figure 3.1.1 Location of Cahul
The official number of inhabitants in the town is around 39000. According to the Deputy Mayor interviewed the real number is, despite considerable emigration to other countries, probably slightly higher, at least 42000 43000, as there are many students in the two universities and other schools and due to not registered immigration to Cahul from the surrounding rural areas.
rao1e 2005-01-17
SWECO INTERNATIONAL
3.2
3.2.1
History The first water services in Cahul date back to year 1936. The water and wastewater services were operated as a department in the town administration. Apa-Canal started in year 1976 and was established as a self financed Municipal Enterprise Apa Canal in 2002.
3.2.2
The Owner. How the Owner Governs Apa-Canal The Municipality is the owner of the Apa-Canal. From year 2003 the Cahul Town Administration is not organized with departments but has in stead a number of specialists. The number of staff in the Town Administration is 24. The Municipality has organized a Steering Committee for Apa-Canal. This Committee has six members including the Deputy Mayor, who is the Head of the Committee. The Steering Committee has 3 members from Apa-Canal, all having the right to vote, one member from the Town Administration who also has the right to vote and one member from the Town Council who has no right to vote. The Steering Committee is organisationally over the Director, but they cannot interfere in his daily work. Normally the Steering Committee has meetings each quarter of the year. All Mayor proposals relating to Apa-Canal are reviewed by the Steering Committee before they go further to the Town Council for approval. Usually the Town Council approves the proposals already in the first meeting they have the question on its table. Both the Municipality and the Apa-Canal Director judge the procedure to be quick and efficient. The Town Council appoints the Director of Apa-Canal. The present Director came to Apa-Canal in 1976 and has been Director since 1987. He is fully entitled to take any decision in the daily operation of the utility. Tariffs and consumption norms have to be approved by the Town Council. Other Mayor questions have to pass the Steering Committee before approval by the Town Council.
rao1e 2005-01-17
SWECO INTERNATIONAL
3.2.3
Legal Aspects Apa-Canal has its own statutes but no separate service agreement with its owner describing for instance the level of service to the customers. .The Municipality is the owner of all the assets including both water and wastewater facilities, and Apa-Canal operates these facilities. In addition to the Moldavian state regulatory framework Apa-Canal has to follow two local regulations, one on Water supply and sewage and one on Discharge of sewage from enterprises to the municipal network. The latter document is presently under revision and the new version will be approved by the Town Council late 2007 or in 2008.
3.2.4
Organization and Management The organization chart for Apa-Canal is presented below. This organization was decided year 2000. A new organization is preliminary planned. For instance will there be a separate commercial section as the number of meters is increasing.
Director
HR dept, Lawyer 1 p
Chief engineer 1 p
Accounting dept 3 p
Emergency engineer 1 p Supply engineer 1 p Economist 1 p Assistant 1 p Storekeeper 1 p Dispatcher serv.1 p
Water network 62 p Sewerage network 49 p WSSN exploit. Dept1) 31 p Energy service 14 p Production dept engineer 1 p Safety engineer 1 p
Customer dept 11 p IT department 5 p Cashier 1 p
Figure 3.2.1 Organization of Cahul Apa-Canal

rao1e 2005-01-17
1) WSSN exploit. Dept = Water Supply and Sewerage Network Maintenance Department
SWECO INTERNATIONAL
The utility has a management team consisting of the Heads of Departments. The team has meetings each Friday following a fixed agenda when they e.g. discuss the nearest future of the utility. No written minutes of meetings exist. The Heads of sections meet every morning at 07.30 for daily reports and orders. This is the main form of internal information existing in the utility. Apa-Canal has 10 computers of which 1 for the director, 1 for the secretary, 3 for billing and other commercial purposes, 2 for technical purposes and 3 for accounting and payment. There is no integrated management information system (MIS). For improved management and internal information there is a need for a modern MIS. Principals of accountable management or management by objective are not used. The heads of departments have to follow a given budget but have no incentives and no formal rights supporting their work. The utility has not carried out any major investment recently. 3.2.5 Staff. Efficiency and training needs Apa Canal has a rather stable number of 188 staff. As the number of customers is 12800 including 500 companies and budget organizations, this means a productivity of 68 customers per employee. The number of persons served is 33500. The number of connections is 4928 individual houses plus 500 companies and budget organizations plus approximately 24. All the heads of departments, engineers and specialists have an education in the right area for their work. The Consultant has no information about the quality of education and experience. The utility has no elaborated plan for training of the personnel. The Consultant judges anyway that there exists a need for training in modern management and in internal information as well as a need for training for better understanding of important financial ratios.
rao1e 2005-01-17
The average salary in Apa-Canal is around 1600 leis per month. This is enough high for attracting and keeping important staff.
SWECO INTERNATIONAL
3.2.6
Estimation of Consumption. Billing and Collection 76% of the customers have meters. Consumption norms are used for the other customers. Personnel from Apa-Canal read most of the meters, but some customers are reading the meters themselves and call or visit Apa-Canal to inform the latest consumption. The meter readers distribute the bills and the customers can pay in 2 Apa-Canal offices and in the post offices. The collection rate is 96.5%. It is easier to disconnect companies than private households, and therefore also easier to get payment from the commercial customers not paying in due time.
3.2.7
Relations to customers and other stakeholders Apa-Canal Cahul maintain its relations with the customers through media (newspapers, TV), meetings with the customers in their homes, explanations of the water and wastewater processes. Students at the State University and Medical College often visit water and wastewater treatment plants. There is no internal or external quality programme defining for instance issues such as quality of water and sewage service, quality of public relations, water demand management and environmental questions.
3.2.8
Consultants Comments The Steering Committee is and interesting idea. It might have a function close to an owners council or board of directors and thus supporting the utilities long-term strategic development, be a good support to the Director and improve the utilitys efficiency. Depending on the real function and composition of the Steering Committee there may be possibilities to further specify and separate the rolls for the owner and the operator and in that way even further improve the use the capacity of both the owner and the operator. The form of management used can be improved. The Consultant judges that there are opportunities to improve the capacity to run the utility in an efficient way through introduction of more modern management. This may first of all be done through training and information.
rao1e 2005-01-17
SWECO INTERNATIONAL
The level of salary does not seem to be a problem for attracting important staff. The utility is computerized and has 5 persons in the IT department, but a modern MIS should be used. Staff efficiency is 68 customers per employee and 24 connections per employee, which is low. The rate of meters is 76%, which may be further increased. The collection rate is high, but might be further improved. The Consultant judges that the company is from institutional point of view qualified for continued participation in the project. Further comments, see section 15.
3.3
A brief description of the socio-economic situation at national level see Social environment in Moldova, Estimation of household average revenues, Economic environment in Moldova and Special economic conditions, in Sections 2.3.1-2.3.4 above.
3.3.1
Social environment in Cahul
3.3.1.1
Population
Number of population for Cahul town as at 1st of January 2007 is the following:
Table 3.3.1: Population

(Thou.) 40.5 39.2 1.3 41.25
In the last years the population evolution recorded a decreasing trend mainly as result of negative natural growth of population and emigrations for work in Western European countries.
rao1e 2005-01-17
SWECO INTERNATIONAL
3.3.1.2
Education
Education network contains approximately 11.500 pupils and students. The town has 8 preschool institutions, 3 primary schools, 2 gymnasiums, 5 high schools and 5 medium schools. In 1999 the State University from Cahul was inaugurated
Estimation of Household Revenues Average nominal monthly salary - National level Average nominal monthly salary - Cahul County Disposable household income (national average per household member) Average monthly pension (national level) Average household disposable income in the county (per member) Average monthly pension at county level Number of persons in household Average household (no of persons) Pensioner household (no of persons) Average household disposable income in the county (per household) Average monthly pensioner household revenues at county level (per household) Lei Lei Lei Lei Lei Lei
Cahul 2004 2005 1,103.1 1,318.7 885.7 990.5 491.4 325.3 394.6 261.2 568.6 383.4 427.1 288.0
No. No. Lei Lei
3.0 1.8 1,183.7 470.1
3.0 1.8 1,281.3 518.4
3.3.2
Economic environment in Cahul
3.3.2.1
Natural resources
Total surface of Cahul town is 3415 ha, out of which 2000 ha are representing agricultural fields. The net surface of the town is 1415 ha.
3.3.2.2
rao1e 2005-01-17
Road network is above 90 Km, out of which 50% is covered with solid materials. The town has railway, International Airport with a runway of 1700 m.
SWECO INTERNATIONAL
3.3.2.3
Economy
In Cahul town are registered approximately 3.800 economic agents, most of them are performing commerce activities -2000; for other economic sectors, the situation is as following: industry -43, constructions -37, transportation -67, rustic households -684.
3.3.2.4
Industry
Te industrial sector is being represented by alimentary industry, light industry and construction materials industry. Volume of industrial production in Cahul Raion, compared to the total industrial production in Republic of Moldova, is presented in the following table:
Table 3.3.31: Volume of Industrial Production Evolution Cahul Raion
Volume of industrial production in 2006 Total out of which Cahul
Total production on Republic of Moldova increased with 26% during the period 2004-2006. For Cahul Raion, the production decreased significantly with 40%, demonstrating a deterioration of the local industry environment.
3.3.2.5
Financial situation of Commercial Companies in Cahul Raion, compared to the total financial situation of Republic of Moldova, is presented in Table 3.3.4. As can be observed from the table, the number of profitable enterprises is increasing, but the percentage of profitable enterprises in total reporting enterprises remains approximately the same (46%).
rao1e 2005-01-17
SWECO INTERNATIONAL
Average number of employees at national level kept a stable trend. In Cahul Raion, during the analyzed period, the average number of employees registered a decrease of 12%.
Jan.-Sept. 2004 Total Cahul

29423 11289 13906 572786 2790 53031 19140 61291 446 211 214 14459 4 837 257 1268

31870 12380 14893 570143 3424 66870 22717 68420 467 200 245 13856 -8 905 285 1189

34700 13155 16532 569698 3689 79052 26867 81804 505 235 247 12866 4 781 248 899
Financial result before tax recorded a negative value in 2005. For 2004 and 2006, financial result had a value of 4 mil Lei. Sales revenues increased in 2005 (8% compared to 2004) and continued with a decrease in 2006 (13% compared to 2005). Receivables related to commercial compensation recorded a stable evolution. invoices and budget
During the analyzed period, debts recorded a decline of 30% in 2006, compared to 2004.
3.4
3.4.1
Financial Aspects
Introduction See section 2.4.1.
rao1e 2005-01-17
SWECO INTERNATIONAL
3.4.2
Analysis of the historical financial performances In order to obtain a clear picture of the financial status of the company, we have briefly analyzed the financial statements for the years ended at December 31, 2004, December 31, 2005 and December 31, 2006.
3.4.2.1
The operational performance of the utility for the last three years reflects both evolutions of physical production and tariff adjustments. A detailed situation of the operating results is shown in the table 1.
Table3.4.1: Operating result evolution - Cahul
Source: Water Utility from Cahul
2004 568.4 561.8 6.6 578.3 54.4 4.6 256.1 201.8 54.4 32.5 59.2 171.5 (9.9)
2005 556.4 544.2 12.2 590.3 71.6 3.0 252.7 200.9 51.7 34.0 68.6 160.5 (34.0)
2006 758.1 711.4 46.6 753.4 74.2 12.3 305.0 243.8 61.2 63.6 92.9 175.3 30.1 4.6
In 2006, approximately 69% of the operating revenues result from water supply and 29% from wastewater operations. The total operating result is negative for 2004 and 2005, having an improvement tendency in 2006. The evolution of the structure of operating revenues is presented in Figure 3.4.1. Level of revenues increased in 2006 for both water and wastewater, as a result of increase in invoiced quantity and increase of tariffs for water and wastewater.
rao1e 2005-01-17
SWECO INTERNATIONAL
The level of non-revenue water is important and the utility will try to decrease the losses in the following years. One of the main purposes of the investment promoted with financial resources from The World Bank loan is to decrease the water losses.
Figure 3.4.1: Structure of Sales - Cahul
Structure of Sales
600.0 500.0
Thousand USD/y
400.0 W ater W astewater
300.0 200.0 100.0 2004 2005 2006
The evolution of invoiced quantities is presented in the following table:

Table 3.4.2: The Evolution of Invoiced quantity 2004-2006 - Cahul
2004 Th. m3 826.0 665.3 160.7 674.0 366.7 307.3
2005 Th. m3 860.9 734.0 740.9 435.0 305.9
2006 % Th. m3 4.2% 860.4 10.3% 733.0 127.4 747.6 456.4 291.2 9.9% 18.6% -0.5% % -0.1% -0.1% 0.4% 0.9% 4.9% -4.8%
126.9 -21.0%
In the last years, the evolution of water production delivered to companies and institutions of is the result of the poor economic situation of companies and public institutions. The weight of water delivered to companies and institutions is low (represents only 15% in total invoiced water).
rao1e 2005-01-17
SWECO INTERNATIONAL
Because the level of tariff for companies and institutions is significantly higher than for domestic customers, these entities have the tendency to find water from other sources (have their own sources) and to pay only sewerage services to the utility. The delayed adjustment of tariff compared with the cost increases had a negative impact on the performances of the water utility. The water utility cannot control the tariff adjustment process, which is the prerogative of the Local Council. The water utility can propose tariff increases based on cost increase, but the final decision is taken by the Local Council. The evolution of the structure of total operating costs is presented in the following chart:
Figure 3.4.2: The Structure of Operating Costs - Cahul
23.9%
23.3%
E nergy
12.3%
O ther costs
40.5%
The most important cost elements are personnel costs (wages, salaries and related taxes), which represents 40.5% of operating expenditures in 2006 and energy costs and other costs which represents about 23% each of operating expenditure in 2006. The weight of energy costs decreased in the last years. The salaries have increased in nominal terms every year. The increase of salaries has to be performed based on premises stipulated in the law regarding evolution of salaries in the public sector. This element is more or less not under the control of the water utility. Due to lack of financial resources the last mandatory salary increase was not yet implemented.
rao1e 2005-01-17
The company has 188 employees

SWECO INTERNATIONAL
The evolution of operating costs is presented in the following chart:

Figure 3.4.3: Evolution of operating costs - Cahul

350.0 300.0 Thousand USD/ye 250.0 200.0 150.0 100.0 50.0 E nergy P ersonnel (salaries and related taxes) O ther costs 2004 2005 2006
Energy costs evolution was stable, while the personnel costs slightly increased. Other costs have registered a significantly increase during the period under analysis.
3.4.2.2

Table 3.4.3: The Level of Account Receivables as at December 31, 2006 - Cahul
31.12.2006 USD % 73,380 59.0% 27,346 22.0% 23,694 19.0% 124,420 100.0%
Main commercial customers are the following: -Cahul Pan-bakery -Tricon-confection -Nuaful Alb-sanatory; -Cheese factory -Beer Unitanc; -Town Hall - including schools, etc, -raion hospital
rao1e 2005-01-17
SWECO INTERNATIONAL
The management of the company needs to have among its priorities the increasing of the collection level. In the last years the water utility succeeded to maintain its collection ratio to high levels. In the current conditions, it is important to maintain the level of the outstanding debt at low levels (at least to maintain this level constant) to be able to generate sufficient cash to pay the current obligations (mainly the energy bill). This is essential for a sound development. The level of short term liabilities has decreased in 2005 but increased considerably in 2006. A breakdown of the short-term liabilities is presented in the following table:
Table3.4.4: Evolution of short-term liabilities (amounts in Thousand USD) - Cahul
2004 86.9 28.5 12.0 30.8 4.5 11.3
2005 57.1 36.4 12.6 0.8 3.9 3.4
2006 202.9 169.4 18.2 0.9 9.8 4.7
The Company does not have historical liabilities to social fund and state or local budget.
3.4.2.3
Tariff analysis
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 3.4.4: Water Tariff Evolution - Cahul

2.50 2.03 2.00 D estic om custom ers 1.18 1.00 C m om ercial custom ers 1.18 1.20 1.20 Instutions 2.03
USD/m
1.50
0.50
0.35
0.32
0.41
2004 2005 2006
In 2006, the water tariff for domestic customers increased with 25%. For institutions and commercial companies, the tariff increased with 83%, when compared to 2005. The tariff evolution of the waste water tariffs for the last years is presented in the following chart:
Figure 3.4.5: Sewerage Tariff Evolution - Cahul
0.35 0.30 0.30 0.25 0.25 0.25 0.22 0.22 D estic om custom ers 0.30
USD/m
0.20 0.15 0.10 0.05 2004 2005 2006 C m om ercial custom ers 0.13 0.10 0.10 P ublic Institutions
For the future the utility should consider the possibility and to take all the necessary actions to adjust the tariff more often to avoid the negative effects of the cost increases due to the inflation. In the future the water utility will have to cover also the possible debt service related to the loan from the World Bank.
rao1e 2005-01-17
SWECO INTERNATIONAL
Briefly, the methodology for approving tariffs consists of the following steps: The utility specialists are preparing a study for tariff adjustment The study is sent to the Local Council and ANRE for approval.
According to the management team of the utility, the level of approved tariff is usually lower than their request. The management team considers that a tariff increase will solve most of the financial problems of the utility. One of the most wide spread idea about tariff increase in Moldova is to increase more of tariffs for private entities and institutions and to increase less the tariffs for inhabitants. In most of the cases this is mainly a political decision with the purpose of maintaining a lower pressure on the domestic customers. This approach leads to an increase of the cross-subsidization between entities (private companies and institutions) and inhabitants. This discourages the economic development.
3.4.2.4
Even if the utility has recorded achievements in the last years, financial management is still far from the requirements of a modern utility. Financial personnel consist of: 1 chief accountant, 1 economist, 1 financial accountant, 1 accountant, 1 accountant cashier, 2 collection cashier, 1 field cashier. Records are inserted into computer database. Company has 10 computers: 3 for accounting department, 3 for commercial activities, 2 for engineering, 1 for secretary and 1 for the manager. The financial management is limited to good management of payments, and is unable to give effective support to the overall management decision-making process, particularly the good management of the growth potential. Without minimizing the technical and implementation problems that the utility has to face in the near future, the financial planning area is most in need of enhancement and restructuring efforts. We recommend the introduction of cost accounting by creating cost centres for the main activities (water and sewerage). There is important to find out the performances of each sector.
rao1e 2005-01-17
SWECO INTERNATIONAL
We recommend the extensive use of computer for financial management. Accounting, billing and collection, financial forecast are just a few items which can be performed more efficient by using a computer. Even if the utility has only one computer, its degree of usage is still very low. The process of financial planning does not include all the parties that should be involved with financial planning matters and has not the necessary prediction-correction role. The management team of the utility has to prepare a long-term strategy to assure the sustainable development. This analysis can be used as a starting point in preparing this strategy. Without a clear strategy for sustainable development of the activity, the utility continue to survive but with very limited potential and lower and lower performance. 3.4.3 Financial Selection Criteria By applying the criteria mentioned under section 2.4.3, the scores obtained by the water Operator from Cahul are presented in the following table:
Table3.4.5: Scores for the Water Utility from Cahul
Historical liabilities Liabilities to Suppliers, Social Fund and State of Local Budgets Total Operating revenues Weight of Liabilities in Total Revenues Number of points Tariff adjustment Last tariff adjustment was in January 2006 In the period 2004-2007 there was only 1 tariff adjustment Total Operating ratio Operating revenues Operating profit Operating revenues/operating costs Points
rao1e 2005-01-17
2006 USD 202,903 758,050 26.8% 6 Points 4 5 9 2006 USD 758,050 753,419 1.01 6 2006 MDL
Account receivables collection period
SWECO INTERNATIONAL
Historical liabilities Trade receivables(A) Sales (B) (A/B)*365- days Points Total points
2006 USD 1,606 9,342 63 8 29
The results are analyzed in the final conclusions chapter where the decision regarding the introduction of Cahul in the 10 list towns is analyzed.
3.5
3.5.1
Technical Aspects
Specific Task Objectives Related to technical Analysis The specific tasks of this sub assignment for the Pre-Feasibility Phase were clarified together with the Client in the beginning of the assignment. The tasks agreed were as follows: To prepare water and wastewater balances for 15 target towns to describe the present situation and water and wastewater projections for the year 2013; to assess the present status and condition of present water supply and sanitation facilities in 15 target towns in order to evaluate the need for replacements and/or needed rehabilitation on short-term basis; and to prepare preliminary short-term investment program for years 20092013 for the 15 target towns in order to improve ad develop the present functional level of their water supply and sewerage services.
3.5.2
Water supply and sewerage in Cahul Water intake consists of one (1) surface water intake from River Prut located some 4 km west from the town centre. From water intake raw water is pumped through 8 km long pressure pipeline to the water treatment plant located south from the town centre. Water treatment process includes flocculation with chemical, sedimentation, filtration in rapid sand filters and chlorination as final treatment. The treated water is stored in three (3) separate
rao1e 2005-01-17
SWECO INTERNATIONAL
underground water tanks. From tanks water is pumped directly to water distribution network. All of water is pumped to distribution from the main water supply pumping station located at WTP site. At present the annual water amount pumped to the network (2006) has been some 3,000 m3/day while the current total capacity of water intake is approximately 11,500 m3/day (when one (1) pump is in operation at same time). The design capacity of WTP is 17,400 m3/day. Water supply network having total length of 73 km and made mainly of cast iron and steel is divided into five (5) different pressure zones. Approximately 33,500 inhabitants are currently connected to the water supply network while some 7,000 inhabitants are dependable on private wells. The total length of sewerage network is approximately 50 km out of which some 15 km are pressure pipelines. The oldest parts of the network are form year 1936 while the most parts are from 1970s. Sewerage network has three (3) district pumping stations out of which two (2) are constructed in 1970s and have newer been renovated while one (1) (the main sewerage PS) is renovated in 2006. In addition to that there is a inlet pumping station for WWTP which is located at WWTP site some 30 meter higher level than the town centre some 5.5 km south from the main sewerage pumping station. Some 63 % (25,600) of inhabitants are connected to sewerage network the while rest are using septic tank systems or dry lavatories. However, the number of septic tank users is not known. The wastewater treatment plant was taken into operation in 1970 representing biological treatment process (treatment in biological filters). At present the reported wastewater flow to the treatment plant is some 2,500 m3/day while the design capacity of the plant is 13,700 m3/day. In general, WWTP has no any grit removal or screening and the existing primary clarifiers are in very poor condition. However, due considerably low influent flow the biological filtration and secondary sedimentation works somehow satisfactory and reported effluent quality has been considerably good. Still, the most parts of the treatment plant needs complete renovation.
rao1e 2005-01-17
SWECO INTERNATIONAL
In the following sections the water and wastewater balances and the technical status of water supply and sanitation facilities as well needed investments on preliminary level have been described in detail. 3.5.3 Water Supply System
3.5.3.1
Present System
Water intake consists of one (1) surface water intake from River Prut located some 4 km west from the town centre. From water intake raw water is pumped through 8 km long pressure pipeline to the water treatment plant located south from the town centre. The water intake pumping station PS1 is renovated (pumps and valves) in 2006. The total capacity of two existing pumps is 2 x 480 m3/h (960 m3/h in total). Existing building and pipelines within pumping station PS1 are from 1970 and have newer been renovated. Water treatment process includes the following process units: - Inlet tank/vertical mixer for flocculation chemical (Aluminium Sulphate); - Flocculation chambers (4 units); - Sedimentation tanks (4 units); - Filtration in rapid sand filters (totally 8 units out of which six (6) are in use); - Chlorination as final treatment; and - Underground water reservoirs for treated water (3 x 2,000 m3, 6,000 m3 in total). From underground water reservoirs water is pumped by main water supply pumping station PS2 to the distribution. At present the annual water amount pumped to the network (2006) has been some 3,000 m3/day (+ 700 m3/day for technological use, 3,700 m3/day in total) while the current total capacity of PS2 is some 23,000 m3/day (when all three (3) pumps are in operation at same time). Water supply network having total length of 70 km and made mainly of cast iron and steel is divided into five (5) different pressure zones as follows: Zone 1 Supplied by PS2; Zone 2 and Zone 3 Supplied by PS3; Zone 4 Supplied by PS4; and Zone 5 Supplied by PS5.
rao1e 2005-01-17
SWECO INTERNATIONAL
From PS2 water is pumped partially directly to the distribution network and partially directly to water reservoirs of district pumping stations PS3 and PS4. In addition to that PS2 is also used to pump water for flushing sand filters at WTP. PS2 is renovated in 2006 (pumps and valves) and have three (3) centrifugal pumps with capacity of 320 m3/h each (960 m3/h in total) in operation. District pumping station PS3 is situated in eastern part of the town of Cahul. Water from PS2 is pumped to two (2) separate underground water reservoirs having capacity of 1,000 m3 each (2,000 m3 in total) which act as intake tanks for centrifugal pumps. Pumping station is renovated (pumps, valves and pipelines) in 2005 to serve two (2) different pressure zones (zones 2 and 3). Pressure zone 2 is supplied by group of three (3) centrifugal pumps. Pressure zone 3 is also supplied by group of three (3) centrifugal pumps with capacity of 112 m3/h each (336 m3/h in total). District pumping station PS4 is situated also in eastern part of the town of Cahul. Water from PS2 is pumped to two (2) separate underground water reservoirs having capacity of 250 m3 each (500 m3 in total) which act as intake tanks for centrifugal pumps. Pumping station is renovated (pumps, valves and pipelines) in 2005 to serve pressure zone 4 and to deliver water to intake reservoirs of district pumping station PS5. PS4 is equipped with group of three (3) centrifugal pumps with capacity of 32.5 m3/h each (97.5 m3/h in total). District pumping station PS5 is used to deliver water for three (3) large multi-storey buildings (pressure zone 5) located in eastern part of the town of Cahul near the PS4. Water from PS4 is pumped to two (2) separate underground water reservoirs having capacity of 1,500 m3 each (3,000 m3 in total) which act as intake tanks for centrifugal pumps. Pumping station has two (2) recently installed centrifugal pumps (in 2004) and three (3) centrifugal pumps from year 1992. The capacity of two pumps (installed in 2004) is 32 m3/h in total, which is enough to deliver water for all three multi-storey buildings. Approximately 33,500 inhabitants are currently connected to the water supply network (21,200 inhabitants in multi-storey buildings and 12,300 inhabitants in private houses) while some 7,000 inhabitants are dependable on private wells. Number of connections to water supply system is 12,850.
rao1e 2005-01-17
SWECO INTERNATIONAL
There are totally five (5) pumping stations which are used for water supply. Used pumps within different pumping stations are presented in Table 3.5.1.
Table 3.5.1: Pumps used for water supply in town of Cahul. (Only pumps which are in permanent use or reserve are presented)
Year of Flow (Q, installation design), m3/h Water Intake ASP (2 units) 2006 480 PS2 ASP (3 units) 2006 320 PS3 NP 50/250V (3 units) 2005 N/A PS4 COR 3M (3 units) 2005 32.5 PS5 2k-6, 1.5k-6 2004 12-20 There are totally 9 underground water tanks (total capacity of 11,500 m3) in used within different pumping stations as follows (all tanks are made of reinforced concrete): Pump type PS2, (3 units): 3 x 2,000 m3 (6,000 m3 in total); PS3, (2 units): 2 x 1,000 m3 (2,000 m3 in total); PS4, (2 unit): 2 x 250 m3 (500 m3 in total); and PS5, (2 units): 2 x 1,500 m3 (3,000 m3 in total).
PS
The quality of treated water delivered for distribution in 2006 from WTP has been presented in 3.5.2.
Table 3.5.2: Analysed water quality. Data has been provided by town of Cahul and represents yearly average values.
Parameter Odour pH Hardness Dry residuals Nitrates Chlorides Sulphates Copper Fe Ammonia Suspended Solids
Unit grade Mol/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l
Requirement 2 <9 <7 1,000 45 350 500 1.0 0.3 2.0 N/A
Actual 2 8.6 4.3 477 7.3 29 125 0.1 0.2 0.2 99
rao1e 2005-01-17
According to water analyses data the quality of produced water in town of Cahul meets the requirements set by Moldavian authorities.
SWECO INTERNATIONAL
Water distribution network consists of mainly steel and cast iron but also reinforced concrete, polyethylene and some kilometres of old asbestos pipelines from year 1955. The range of diameters is from household connections of DN 15 to main distribution network DN 700. The total length of main distribution network is some 73 km out of which some 22 kilometres have been renovated in 2006-2007 (22 kilometres to be renovated by the end of year 2007). Different lengths of used pipeline materials (situation before renovation, year 2005) and age of the main network have been presented in 3.5.3.
Table 3.5.3: Water Supply Network in town of Cahul.
Material Steel Cast iron Polyethylene Reinforced concrete Asbestos Total
DN 100-200 300-700 100-200 300-500 150 700 100
10-20 years, km
20-40 years, km 14.4 2.4
40-60 years, km 21.8 21.8
3.4 2.0 4.1 5.4 20.9 3.5 47.1
Total, km 21.8 14.4 24.2 3.4 2.0 4.1 3.5 73.4
3.5.3.2
At the moment water is taken directly from river Prut and the water intake is reported to be very sensitive for the low water level in the river and for flooding. During the heavy rains the turbidity in the river water has reported to exceed 2,000 mg/l causing serious problems for the water treatment process. In 1980 Apa-Canal started to construct a new water intake basin by present water intake. Excavation works were finished by 80% but newer finished. The new basin would be used to storage and buffer the intake flow in order to avoid problems caused by heavy rains and/or by low water level in the river. Pumps and valves within water intake and water supply pumping stations are recently replaced and in good condition. Some 22 kilometres of main network has recently replaced by polyethylene pipelines (or will be replaced by the end of 2007) and could be considered to be in a good condition. However, some 50% of the network is made in 1950s being older than 60 years. Cahul ApaCanal has reported several problems with old cast iron and steel
rao1e 2005-01-17
SWECO INTERNATIONAL
pipelines. The highest rate of bursts has been reported to take place within pressure pipelines from the water intake pumping stations to WTP (some 4.1 km of steel and 4.1 km of reinforced concrete pipelines) and pressure pipeline from PS2 to PS3 (4.1 km long pipelines are planned to be replaced in 2007). Also some 8.6 km of existing network (DN 100-150) made of steel have been reported to have high rate of bursts. In general, mechanical parts and machineries and partly structures at WTP are in a very bad condition. Basically WTP has not been renovated since it was constructed in 1970 (only some urgent renovations have been carried out). It could be estimated that in order to provide reliable water supply for town of Cahul the whole WTP will need a complete renovation in the near future. Within this study the condition of underground water reservoirs was not studied in detailed. However, according to the data received from Apa-Canal of Cahul reservoirs have not been renovated in 30 years. An-accounted water losses in 2006 constituted 495,000 m3 (45% from the water volume pumped to the distribution) out of which some 50 % were reported to be leaks from the network while 50 % were estimated to be own technological use of water by Apa-Canal (reported by Apa-Canal of Cahul). Together with renovation of the existing network the main focus shall be paid to extend the network (by some 15-20 km) so that all (100 %) inhabitants in Cahul would be connected to system (currently some 83 %). Also the WTP should be renovated in order to provide reliable water supply for the town. In order to secure the water quality within water intake it would be necessary to finish works within new water intake basin (to construct storage and buffer basin for water inlet).
3.5.3.3
Water intake has the total capacity of 960 m3/h while the current water amount pumped to water treatment has been 155 m3/h (3,700 m3/day) on average. The design capacity of the WTP is 13,700 m3/day and is operated only with some 27 % of the capacity.
rao1e 2005-01-17
SWECO INTERNATIONAL
PS2 has the total capacity of 960 m3/h while the current pumped water amount has been 155 m3/h (3,000 m3/day for distribution and 700 m3/day for own use) on average. Only one (1) pump has been operated at the same time average operating time being 19 hours per day. Different pressure zones are supplied as follows: - PS2 is operated 24 hours per day (supplies pressure zone 1); - Pressure zone 2 is supplied from PS3 only between 6:00 and 23:00 hrs; - Pressure zone 3 is supplied from PS3 24 hours excluding one (1) district and some multi-storey buildings which are supplied only between 06:00-14:00 hrs and 18:00-23:00 hrs; - Pressure zone 4 is supplied from PS4 only between 6:00 and 23:00 hrs; and - Pressure zone 5 (3 large multi-storey buildings) is supplied from PS5 only between 6:00 and 23:00 hrs. Pumped water flows are metered but operation is not monitored automatically. There is no SCADA system for control water supply pumping arrangements. According to the analysis from year 2006 the quality of supplied water from WTP is good and corresponds to set Moldavian norms for drinking water. At the moment the capacity of water intake is sufficient to produce the needed water amount for the whole town of Cahul. Beginning of year 2007 there were 9,724 connections equipped with water flow meters representing some 76 % of all connections (12,850 connections in total). Some 72 % of inhabitants are living in houses equipped with household-meters. According to Apa-Canal all business utilities in Cahul were having flow meters installed. The energy efficiency for different water distribution pumping stations was calculated based on available data presented by Cahul ApaCanal and given pump design parameters. Total energy consumption of pumping stations (excluding WTP data was not available) for water supply system in 2006 was 2,590,000 kWh.
rao1e 2005-01-17
The average used energy consumption at PS1 was 0.63 kWh/m3 and at PS2 1.0 kWh/m3.
SWECO INTERNATIONAL
According to preliminary energy efficiency analysis all pumping station are running with reasonable good energy efficiency. 3.5.4 Sewerage System
3.5.4.1
Present System
The main sewerage network is from 1970s while the oldest parts are from 1936. Sewerage network has the total length of approximately 50 km out of which some 14.5 kilometres are pressure pipelines. Gravity sewers are made of asbestos and ceramics while pressure mains are maid of steel. Sewerage network has three (3) district pumping stations out of which two (2) are constructed in 1970s and have newer been renovated while one (1) (the main sewerage PS) is renovated in 2006 (pumps and valves). In addition to that there is a inlet pumping station for WWTP which is located at WWTP site some 30 meter higher level than the town centre and some 5.5 km south from the main sewerage pumping station. Some 63 % (25,600) of inhabitants are connected to sewerage network while the rest are using septic tank systems or dry lavatories. However, the number of septic tank users is not known. WWTP, taken into operation in 1970, has a design capacity of 13,700 m3/day and consists the following treatment units: Grit chamber; Primary sedimentation tanks (8 units); Biological filtration (filtrate material gravel) (3 units); Secondary sedimentation (3 units); Sludge handling in sludge drying beds; Sludge pumping stations; and Chlorination plant (not in use) and laboratory building.
At present the reported wastewater flow to the treatment plant is some 2,500 m3/day which is only some 18 % of design flow of the plant. In general, WWTP has no any grit removal or screening and the existing primary clarifiers are in very poor condition. However, due considerably low influent flow the biological filtration and secondary sedimentation works somehow satisfactory and reported effluent
rao1e 2005-01-17
SWECO INTERNATIONAL
quality has been considerably good. Still, the most parts of the treatment plant needs complete renovation.
3.5.4.2
The main sewerage network is more than 30 years old and has newer been renovated. The main materials used are asbestos and ceramics pipelines. The existing sewerage network (excluding renovated sections) and sewerage pumping stations (excluding main PS which is recently renovated) could be considered to be in a poor condition. Still, in 2006 Apa-Canal has already replaced some 2.0 km of old steel pressure sewerage by new polyethylene pipelines. Apa-.Canal has also started renovation of 11.2 km of existing pressure mains. This work is planned to be finished by end of 2007 including 4.5 km long pressure pipeline (to be replaced by new polyethylene pipeline) from main PS to WWTP and some 6.7 km pressure pipelines (polyethylene) from district pumping stations to the main PS. However, within this study any conditional analysis has not been carried out and it could only be estimated that at least proper flushing of pipelines, emptying of manholes and replacement of poorest condition sections including some 10-15 kilometres of gravity mains (ceramics and asbestos) pipelines. Still, the sewerage network covers only some 63 % of inhabitants and in order to provide proper sanitation services for all inhabitants in the town of Cahul the first priority regarding investments in sewerage system would be enlargement of the network to cover as many water consumers as possible. This would mean tentatively some 20 kilometres of new main sewerage network and one (1) new district sewerage pumping stations. For the proper monitoring of sewerage network the renovated district sewerage pumping stations should be in the future be connected to centralized control system, SCADA. Existing Wastewater Treatment Plant is in need of complete renovation. Taken into consideration the condition of existing structures and machineries and insufficient process technology it could be recommended that the whole treatment plant will be replaced with new modern and more compact WWTP taken into account current and future wastewater flows and loads. For new
rao1e 2005-01-17
SWECO INTERNATIONAL
WWTP there is a possibility to use area reservation on the existing plant site. Still, the existing WWTP is located on considerably high level compared to main sewerage system of the town and wastewater is currently pumped to the treatment plant by main sewerage PS from some 30 meters lower level causing high energy consumption in pumping. During the next project phases it would be feasible to find a new location for WWTP from lower ground level near the river Prut so that most of the produced wastewater could be led to the treatment plant by gravity. This would bring considerable savings in pumping costs of raw wastewater from the town districts. It shall be noted that within this study only visible conditional analysis were carried out and proper analysis of existing structures would be needed during the next project phases.
3.5.4.3
District sewerage pumping stations (2 pumping stations) delivers wastewater to main sewerage pumping station which delivers wastewater to the WWTP. District sewerage pumping stations are form year 1970 and 1978 and have newer been renovated. Pumped wastewater amount is not known. Pumping stations could be considered to be in a need of complete renovation. Main district pumping station is constructed in 1970 but has been renovated (pumps and valves) in 2005 having two (2) newly installed centrifugal pumps with capacity of 221 m3/h each (10,600 m3/day in total). The average daily wastewater flow pumped from main district pumping station to WWTP in 2006 was 2,050 m3/day (reported by Apa-Canal of Cahul). Due a rather poor condition of process units and very long retention times in primary and secondary sedimentation units the proper treatment of wastewater at WWTP is very difficult. Current grit removal is not sufficient for proper treatment of wastewater. Also primary clarification is not operated properly (retention time for wastewater is several days and removed sludge amount is very small). Biological filtration is in a rather poor condition but is working satisfactory. Treated wastewater is led to biological pond before discharging into the river Prut. Retention time in the pond is very long and due evaporation the amount of discharged wastewater is
rao1e 2005-01-17
SWECO INTERNATIONAL
considerably small. Only used mechanical equipments at WWTP are pumps for sludge pumping from primary and secondary sedimentation basins. Pumps are used for pumping sludge from basins to sludge stabilization bonds. The effluent quality in 2006 according to the information received from the town of Cahul is presented in the Table 3.5.4.
Table 3.5.4: The effluent quality at Cahul WWTP in 2006 (monthly average).
Parameter SS COD BOD5 Chlorides Sulphates
Unit mg/l mg/l mg/l mg/l mg/l
Inlet After concentration treatment 178 N/A 123 N/A 175 N/A 123 N/A 100 N/A
Requirement 5 30 3.0 300 N/A
The effluent data was not available. The energy efficiency for district sewerage pumping stations was not calculated thus pumped wastewater amounts were not known. Based on available data presented by Cahul Apa-Canal and given pump design parameters the average used energy consumption for main sewerage pumping station was only 0.37 kWh/m3. This indicates that the actual pumped wastewater amount has been lower than reported. 3.5.5 Prioritising of needed Investments for years 20092013
3.5.5.1
In order to prepare preliminary water demand and wastewater projections the water and wastewater flows were analysed for the last three (3) years (20042006). Preliminary water demand and wastewater projections for the year 2013 are based on general assumptions as follows: - The connection rate to the water supply network is 100 %; - Per capita consumption in Cahul in 2013 is 130 litres/capita/day; - The connection rate to the sewerage system is 80 %; and - Wastewater flow will be significantly bigger due the connection of more industry utilities in the sewerage network.
rao1e 2005-01-17
SWECO INTERNATIONAL
In addition to above mentioned, some assumption related to rehabilitation of the water supply network were made as follows: - Due repairing and maintenance work and installation of new pipelines for new housing areas the amount of leakages from the water supply network have estimated to decrease some 20 %; - Due installation of new in-house flow meters and due better accounting system amount of unaccounted water is estimated to decrease some 15 % (billed water demand per capita will increase); and - Due better in-house flow measurement and possible increase in water tariffs per capita consumption has estimated to decrease some 15 %. Preliminary water and wastewater flow projections for Cahul are summarised below in Table 3.5.5.
Cahul Population connected to the Water Supply network Population connected to the Sewerage network Water pumped to the Distribution Non-Revenue Water Average total flow to WWTP
Year 2006 Value Unit 33,500 capita 25,600 capita 3,712 m3/d 111 37 % 40 2,000 78 l/cap/d % l/cap/d m3/d l/cap/d
Year 2013 Value Unit 40,000 capita 32,000 capita 5,200 m3/d 130 19 % 25 3,800 120 l/cap/d % l/cap/d m3/d l/cap/d
3.5.5.2
Needed Investments
Investment need estimations are done for the period of years 20072013 in order to secure sufficient operation of water supply and sanitation systems and to provide water supply and wastewater treatment for more inhabitants in town of Cahul. Preliminarily estimated short-term investments needed for water supply system are listed below, and serves as a basis for the proposed investment packages:
rao1e 2005-01-17
SWECO INTERNATIONAL
- Finalization of construction works within new water intake area; - Continuing rehabilitation of network by replacement of old water mains made of cast iron and steel by polyethylene pipelines (some 9 km in need of urgent renovation); - Renovation WTP (starting from mechanical parts); - Rehabilitation of existing water reservoirs to secure the quality of supplied water; - Construction of a reservoir with a capacity of 4000 m3, in order to assure the population with necessary demand of water; - Continuing of installation of new in-house water meters; - Construction of new network including water meters for new consumers so that connection rate in Cahul would be 100 % (some 20 km of new network); and - Implementation of automation and control system (SCADA) for water pumping arrangements. In general, both sewerage network and WWTP require urgent rehabilitation and reconstruction works to enable reliable operation of sanitation operations and to fulfil the treatment requirements set for wastewater effluent quality by Moldovan authorities. Preliminarily estimated short-term investments needed for sewerage system are listed below, and serves as basis for the proposed investment packages: - Flushing of existing sewerage network and emptying of manholes; - Rehabilitation of existing sewerage network (some 10-15 km in need of urgent rehabilitation); - Enlargement of the network (including tentatively 1 new district sewerage pumping stations and some 20 km new gravity mains) to cover at least 80 % of inhabitants; and - Construction of new WWTP with capacity of 3,800 m3/day.
3.5.5.3
Preliminary cost estimations for proposed investments packages within water supply and sanitation services are only preliminary estimations and will only be used as help in preparation of suitable investment packages in Feasibility Phase of the project. Proposed investment packages have been prepared so that there are two different packages; 1st investment package for works which shall be carried out in the very near future (within 1-2 years) and 2nd
rao1e 2005-01-17
SWECO INTERNATIONAL
investment package for other works which must be implemented in order to secure the water and sanitation operations in long term: 1st Investment Package: 1.8 million USD in total Renovation of existing water intake area and mechanical parts of the water treatment plant including automation of water intake and water treatment, 0.8 million USD; and Flushing and renovation of sewerage network, 1.0 million USD. 2nd Investment Package, 9.0 million USD in total Rehabilitation of 9 km of water supply network and construction of 20 km of new water supply network, 3.0 million USD; and Renovation and/or construction of 30 km of sewerage network and construction of new WWTP, 6.0 million USD.
rao1e 2005-01-17
SWECO INTERNATIONAL
4
4.1
Clrai
General
Clrai town is located on both banks of river Bac, in a hill region situated at the half of road between Chiinu and Ungheni, 59 km to Ungheni and 59 km to capital town of Republic of Moldova.
Figure 4.1.1: Location of Clrai

rao1e 2005-01-17
SWECO INTERNATIONAL
The official number of inhabitants has decreased from 18500 year 2000 to 16500 in 2006. The town has water supply 20 hours per day.
4.2
The information under this headline (Institutional Aspects) is based only on written information from the town.
4.2.1
History The first water services in Clrai date back to 1960. The water and wastewater services changed to the present legal form in year 2000.
4.2.2
The Owner. How the Owner Governs Apa-Canal The Municipality is the owner of the utility, and the company is from organizational point of view placed under the Agency of constructions and territorial development in the Town Administration under the Town Council. The Town Council appoints the Director, who reports to the Agency of constructions and territorial development.
4.2.3
Legal Aspects The company is called Intreprinderea Municipala Gospodaria Communal Locativa Clrai. It has its own statutes but no separate service agreement with its owner describing for instance the level of service to the customers. The Municipality is the owner of all the assets, and Apa-Canal operates them.
4.2.4
Organization and Management The organization chart for IM Gospodaria Comunal Locativa Clrai is presented below. The utility is working also with other municipal technical services than water and wastewater, for instance solid waste management. It has no board or owners council. There is a management team consisting
rao1e 2005-01-17
SWECO INTERNATIONAL
of Director and heads of departments. The team has weekly meetings. There are minutes of meetings only when necessary. These meetings are also the main source of internal information in the utility.
Director Assistant
Building Dept 7p
Chief Engineer
Safety Engineer
Accounting
Dept. Chief Acc 1 p Accountant 2 p Cashier 2 p
Warehouse 1p
Purchasing Dept. 1 p
Planning & Technical Dept
Territory Developm. Dept
Repairs % Constr. Dept
Water Network Dept
Figure 4.2.1: Organization of Communal Services Utility Clrai
The utility has no MIS. The utility carried out the following investments during the last six years: Thousand MDL 2001 2002 484.2 100
2003 1026.8
2004 1295.2
2005 274
2006 300
The Director and his personnel organized and managed the projects.
rao1e 2005-01-17
Head 1 p Chemical Engineer 1 p Mechanic 1 p Motorman 20 p
Water Selling Dept
Senior Mechanic 1 p Dispatcher 1 p Welder 1 p Locksmith 1 p Driver 18 p Turner 1 p
Chief Electrician 1 p Electrician 2 p
Head 1 p Street Cleaner 11 Loader 4 p
Electrical Dept
Head 1 p Plaster 3 p Wood turner 5 p
Head 1 p Master 1 p Motorman 14 p Locksmith 1 p
Head 1 p Economist 1 p
Inspectors 3 p
Worker 5 p
Garage
WWTP
SWECO INTERNATIONAL
4.2.5
Staff. Efficiency and training needs Apa-Canal has now 121 employees. The exact number of employees working only with water and wastewater is not known, but reducing the total number of employees with the 25 persons working with solid waste and 50% of the administrative, construction and service personnel results in an estimation of some 70 persons involved in the water and wastewater services. As the number of number of inhabitants connected to the water services is 9000, the productivity based on this is 129 consumers per employee. Only 5000 inhabitants are connected to the wastewater system, so the productivity based on that figure is 71. The level of education among the managing staff varies from medium to high level education. There is a need for training for instance in accounting. The utility also needs some new personnel such as a water supply specialist, an economist and a welder.
4.2.6
Estimation of Consumption. Billing and Collection 92% of the multi apartment buildings have meters. (240 apartments are sealed, 15 apartments are disconnected and in 400 apartments nobody lives.) For 42 apartments without meters a consumption norm of 150 litres per person and day is used. 89% of the 1600 individual buildings have meters. (16 houses are disconnected and 47 are sealed.) For 201 individual buildings without meters a consumption norm of 240 litres per person and day is used. The customers own the meters. The collection rate was 60% for population and 95% for business and budget organizations during 2006.
4.2.7
Relations to customers and other stakeholders There is no internal or external quality programme defining for instance issues such as quality of water and sewage service, quality of public relations, water demand management and environmental questions.
4.2.8
Consultants Comments The company is working not only with water and wastewater services. Therefore it is important to have clearly defined cost centres in order to be able to for instance follow the development of the water and
rao1e 2005-01-17
SWECO INTERNATIONAL
wastewater services and be able to carry out good quality benchmarking. There is a need for some new personnel, e.g. an economist. The utility also needs a Management Information System, and will therefore probably need also an IT specialist. Staff efficiency for the water services is 129 consumers per employee, which is medium level. (There is no information available on number of connections and contracted customers, and staff efficiency based on these figures can not be calculated.) Rate of meters is 89 - 92% for different customer categories, which is rather good. Collection rate is very low for the population, only 60%, and must be improved. Also the 95% for business and budget organization can be improved. Further comments, see section 15.
4.3
4.3.1
Social environment in Clrai
4.3.1.1
Population
Number of population for Clrai as at 1st of January 2007 is the following:


rao1e 2005-01-17
(Thou.) 16.5 16.4 0.1 16.5
SWECO INTERNATIONAL
4.3.1.2
Estimation of Household Revenues Average nominal monthly salary - National level Average nominal monthly salary - Clrai County Disposable household income (national average per household member) Average monthly pension (national level) Average household disposable income in the county (per member) Average monthly pension at county level Lei Lei Lei Lei Lei Lei
Clrai 2004 2005 1,103.1 1,318.7 818.4 1,011.5 491.4 325.3 364.6 241.3 568.6 383.4 436.1 294.1
Number of persons in household Average household (no of persons) Pensioner household (no of persons) Average household disposable income in the county (per household) Average monthly pensioner household revenues at county level (per household)
No. No. Lei Lei
3.0 1.8
3.0 1.8
1,093.7 434.4
1,308.4 529.4
4.3.2
Economic environment in Clrai
4.3.2.1
Natural resources
Total surface of Clrai town is 4,233 ha, out of which 2,279 ha represents agricultural fields.
4.3.2.2
rao1e 2005-01-17
Potable water is supplied from public fountains and aqueducts. Aqueducts are supplying approx. 80% of the town population. The rest are supplied from public fountains. The town has a gas infrastructure covering approximately 96% of blocks and 38% of
SWECO INTERNATIONAL
individual houses. Gas network has a length of 16.5 km with a medium pressure and 27.2 km of network with low pressure. Total length of roads is 71.3 km, out of which 64.3 km are local roads and 7 km are national roads. From the total length of roads, only 24.2 km (34%) are covert with asphalt.
4.3.2.3
Economy
550 economic agents are registered in Clrai town. Retail network includes 110 shops and 2 sale markets. Besides them, in Clrai town 632 individual peasant farms are also registered.
4.3.2.4
Industry
Volume of industrial production in Clrai Raion, compared to the total industrial production in Republic of Moldova, is presented in the following table:
Table 4.3.3: Volume of Industrial Production Evolution Clrai Raion
Volume of industrial production in 2006 Total out of which Clrai
2004 Current Compared prices to (mil. previous lei) year (%) 17533 106.9 96.8 88.7
2005 Current Compared prices to (mil. previous lei) year (%) 21123.5 106.3 119.7 107.8
2006 Current Compared prices to (mil. previous lei) year (%) 22243.2 93.1 92.3 79.5
Total production on Republic of Moldova increased with 26% during the period 2004-2006. For Clrai Raion, the production increased in 2005 with 23%, but decreased in 2006 to less than the value registered in 2004.
4.3.2.5
Financial situation of Commercial Companies in Clrai Raion, compared to the total financial situation of Republic of Moldova, is presented in Table 4.3.4. As can be observed from the table, the number of profitable enterprises is increasing, but the percentage of profitable enterprises in total reporting enterprises remains approximately the same (46%).
rao1e 2005-01-17
SWECO INTERNATIONAL
In Clrai Raion, the number of companies increased during the period, but the percentage of profitable companies decreased.
Jan.-Sept. 2004 Total Clrai

29423 11289 13906 572786 2790 53031 19140 61291 210 97 79 4817 5.9 254.8 124.8 447.6

31870 12380 14893 570143 3424 66870 22717 68420 237 92 100 4700 -15.3 316.6 124.7 585.6

34700 13155 16532 569698 3689 79052 26867 81804 269 104 99 4798 -0.4 394.1 124.6 508.2
Average number of employees at national level kept a stable trend. In Clrai Raion, during the analyzed period, the average number of employees kept also a stable evolution. Financial result before tax recorded a positive value in 2004. A loss was registered in 2005 and also for 2006. However, the loss in 2006 has improved compared to 2005. Sales revenues increased in 2005 (24% compared to 2004) and continued with a decrease in 2006 (25% compared to 2005). Receivables related to commercial compensation recorded a stable evolution. invoices and budget
During the analyzed period, debts recorded an increase of 30% in 2005, compared to 2004. In 2006, the debts decreased with 13%, compared to 2005.
rao1e 2005-01-17
SWECO INTERNATIONAL
4.4
4.4.1
Financial Aspects
4.4.2
4.4.2.1
Table 4.4.1: Operating result evolution - Clrai
Operating result for the year Amounts in Thou. USD Operating revenues Sales Revenues from services Other revenues Operating costs Material expenses Third parties services Personnel expenses Salaries Social insurance taxes Other costs for water and sewerage Depreciation Energy cost Costs related to other activities Operating result
Source: Water Utility from Clrai
2004 266.0 177.7 81.9 6.4 300.2 23.0 13.4 71.6 54.9 16.7 3.3 25.9 57.2 105.8 (34.1)
2005 343.3 168.4 166.3 8.6 383.8 22.8 3.4 81.4 63.3 18.1 1.8 21.0 54.0 199.4 (40.5)
2006 299.3 163.0 123.1 13.2 429.8 31.9 2.6 94.3 73.7 20.6 8.7 19.1 58.7 214.5 (130.5)
rao1e 2005-01-17
In 2006, approximately 31% of the operating revenues result from water supply and 23% from wastewater operations. The total operating result is negative for the entire period of analysis with a significant deterioration tendency in 2006.
SWECO INTERNATIONAL
The evolution of the structure of operating revenues is presented in Figure 4.4.1. The level of revenues slowly decreased due to slow increase of the invoiced quantity and without any tariff adjustments in the last 2 years.
Figure 4.4.1: Structure of Sales - Clrai
Structure of Sales
120.0 100.0
Thousand USD/y
80.0 W ater W astewater
60.0 40.0 20.0 2004 2005 2006
The evolution of the water losses is presented in the table below:

Table 4.4.2: The Evolution of Non Revenue water 2004-2006 - Clrai
Non revenue water Pumped water Invoiced water Losses
2004 Th. m3 182.8 144.8 -21%
2005 Th. m3 493.0 128.9 -74%
% 170% -11%
2006 Th. m3 % 202.5 -59% 136.0 6% -33%
The level of non-revenue water is important and the utility will try to decrease the losses in the following years. One of the main purposes of the investment promoted with financial resources from The World Bank loan is to decrease the water losses. The evolution of invoiced quantities is presented in the following table:
Table 4.4.3: The Evolution of Invoiced quantity 2004-2006 - Clrai
rao1e 2005-01-17
Evolution of invoiced quantity Water Inhabitants
2004 Th. m3 144.8 108.8
2005 2006 Th. m3 % Th. m3 % 128.9 -11.0% 136.0 5.5% 98.6 -9.4% 103.9 5.4%
SWECO INTERNATIONAL
Private companies and institutions Waste water Inhabitants Private companies and institutions
36.0 100.3 74.5 25.8
30.3 -15.8% 93.5 -6.8% 66.2 -11.1% 27.3 5.8%
32.1 96.5 68.2 28.3
5.9% 3.2% 3.0% 3.7%
The water consumption fluctuated in the last years; thus, in 2005 the consumption decreased for both categories, while in 2006 the overall consumption increased. In the last years, the evolution of water production delivered to companies and institutions of is the result of the poor economic situation of companies and public institutions. The weight of water delivered to companies and institutions is low (represents only 24% in total invoiced water). Because the level of tariff for companies and institutions is significantly higher than for domestic customers, these entities have the tendency to find water from other sources (have their own sources) and to pay only sewerage services to the utility. The inexistent adjustment of tariff compared with the cost increases had a negative impact on the performances of the water utility. The water utility can not control the tariff adjustment process, which is the prerogative of the Local Council. The water utility can propose tariff increases based on cost increase but the final decision is taken by the Local Council. The evolution of the structure of total operating costs is presented in the following chart:
Figure 4.4.2: The Structure of Operating Costs - Clrai
rao1e 2005-01-17
SWECO INTERNATIONAL
20.1%
27.3%
E nergy
8.9%
O ther costs
43.8%
The most important cost elements are personnel costs (wages, salaries and related taxes), which represents 43.8% of operating expenditures in 2006 and energy costs, which represents about 27.3% of operating expenditure in 2006. The weight of energy costs was relatively constant in the last years. The salaries have increased in nominal terms every year. The increase of salaries has to be performed based on premises stipulated in the law regarding evolution of salaries in the public sector. This element is more or less not under the control of the water utility. The evolution of operating costs is presented in the following chart:
Figure 4.4.3: Evolution of operating costs - Clrai
100.0 90.0 80.0 Thousand USD/ye 70.0 60.0 50.0 40.0 30.0 20.0 10.0 E nergy P ersonnel (salaries and related taxes) O ther costs 2004 2005 2006
rao1e 2005-01-17
The evolution of operating costs highlights the imprudent policy regarding expenditures in the last years even though there is a lack of financial resources.
SWECO INTERNATIONAL
4.4.2.2
A breakdown of the account receivables from commercial companies is shown in the following table:
Table 4.4.4: The Level of Account Receivables as at December 31, 2006 Clrai
31.12.2006 USD % 61,926 70.4% 21,528 24.5% 4,530 5.1% 87,985 100.0%
The account receivables refer mainly to the Cans Factory, but the collection period is very high, thus the aging is mainly less than a year. The management of the company needs to have among its priorities the increasing of the collection level. In the last years the water utility succeeded to maintain its collection ratio to high levels. In the current conditions, it is important to maintain the level of the outstanding debt at low levels (at least to maintain this level constant) to be able to generate sufficient cash to pay the current obligations (mainly the energy bill). This is essential for a sound development. The level of short term liabilities has increased in the last years. A breakdown of the short-term liabilities is presented in the following table:
Table 4.4.5: Evolution of short-term liabilities (amounts in Thousand USD) - Clrai
2004 157.1 34.8 11.9 78.4 1.1 30.8
2005 162.1 42.3 15.7 96.1 3.7 4.4
2006 222.6 44.2 13.3 158.2 5.7 1.1
The utility still face outstanding debts regarding liabilities to the budgets due to insufficient financial resources. The aging of the liabilities to the social fund is presented in the following table:
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 4.4.6: Aging of liabilities to social fund Clrai
31.12.2006 USD % 31,067 19.6% 58,009 36.7% 69,161 43.7% 158,237 100.0%
For these outstanding liabilities, the Company has a rescheduling agreement with the Fiscal Authorities (concluded a Rescheduling memorandum). The Company did not respected Memorandum which may lead to cancellation of rescheduling. The aging of the liabilities to the state and local budgets is presented in the following table:
Table 4.4.7: Aging of liabilities to state and local budgets - Clrai
31.12.2006 USD USD 5,703 100.0% 0.0% 0.0% 5,703 100.0%
4.4.2.3
Tariff analysis
Historically, tariff levels have been effectively imposed by the Ministry of Communal Services and Territorial Development. Because of the institutional restructuring and decentralization, the utility may increase the tariffs without the approval of the central authorities but with the approval of the local authorities (municipality) and ANRE. The domestic tariff level is calculated based on the total cost per cubic meter plus a profit allowance (between 5-10%). Changes would be applied following significant increases in costs, mainly electricity. The evolution of invoiced quantity, the increase of prices for energy and the increase of salaries should have been the main factors affecting the evolution of tariffs.
rao1e 2005-01-17
SWECO INTERNATIONAL
The tariff evolution of the water tariffs for the last years is presented in the following chart:
Figure 4.4.4: Water Tariff Evolution - Clrai
1.80 1.60 1.40 1.20 D estic om custom ers Instutions 0.56 1.54 1.54 1.48 1.48 1.42 1.42
USD/m
1.00 0.80 0.60 0.40 0.20 2004 2005 2006 0.49 0.47
The company did not have any tariff increase in the analysed period, quite the reverse - the company had decreased the tariff in 2005, compared to the previous year and maintained it constant in 2006. The situation is due to the fact that the local authorities do not approve the tariff increases. The tariff evolution of the sewerage tariffs for the last years is presented in the following chart:
Figure 4.4.5: Sewerage Tariff Evolution - Clrai
1.20 1.10 1.10
1.09
1.09
1.06
1.06
1.00 D estic om custom ers
0.80
USD/m
0.60 0.37 0.35
P ublic Institutions 0.33 C m om ercial custom ers
0.40
0.20
2004 2005 2006
rao1e 2005-01-17
For the future the utility should consider the possibility to take all the necessary actions to adjust the tariff more often to avoid the negative effects of the cost increases due to the inflation. In the future the
SWECO INTERNATIONAL
water utility will have to cover also the possible debt service related to the loan from the World Bank. Briefly, the methodology for approving tariffs consists of the following steps: The utility specialists are preparing a study for tariff adjustment The study is sent to the Local Council and ANRE for approval. According to the management team of the utility, the level of approved tariff is usually lower than their request. The management team considers that a tariff increase will solve most of the financial problems of the utility. One of the most wide spread idea about tariff increase in Moldova is to increase more of tariffs for private entities and institutions and to increase less the tariffs for inhabitants. In most of the cases this is mainly a political decision with the purpose of maintaining a lower pressure on the domestic customers. This approach leads to an increase of the cross-subsidization between entities (private companies and institutions) and inhabitants. This discourages the economic development.
4.4.2.4
Even if the utility has recorded achievements in the last years, financial management is still far from the requirements of a modern utility. A lack of skills and human resources leads to limitations in the activities performed by the Finance Department. The accounting department consists of 6 persons. The utility has 4 computers: one for the accounting unit, one for the commercial unit, one for the secretary and one for the salary unit. The financial management is limited to good management of payments, and is unable to give effective support to the overall management decision-making process, particularly the good management of the growth potential.
rao1e 2005-01-17
SWECO INTERNATIONAL
Without minimizing the technical and implementation problems that the utility has to face in the near future, the financial planning area is most in need of enhancement and restructuring efforts. We recommend the introduction of cost accounting by creating cost centres for the main activities (water and sewerage). There is important to find out the performances of each sector. We recommend the extensive use of computer for financial management. Accounting, billing and collection, financial forecast are just a few items which can be performed more efficient by using a computer. Even if the utility has only one computer, its degree of usage is still very low. The process of financial planning does not include all the parties that should be involved with financial planning matters and has not the necessary prediction-correction role. The management team of the utility has to prepare a long-term strategy to assure the sustainable development. This analysis can be used as a starting point in preparing this strategy. Without a clear strategy for sustainable development of the activity, the utility continue to survive but with very limited potential and lower and lower performance. 4.4.3 Financial Selection Criteria By applying the criteria mentioned under section 2.4.3, the scores obtained by the water Operator from Clrai are presented in the following table:
Table 4.4.8: Scores for the Water Utility from Clrai
Historical liabilities Liabilities to Suppliers, Social Fund and State of Local Budgets Total Operating revenues Weight of Liabilities in Total Revenues Number of points Tariff adjustment Last tariff adjustment was in 2004
rao1e 2005-01-17
2006 USD 222,561 299,322 74.4% 4 Points 1
SWECO INTERNATIONAL
In the period 2004-2007 there were 2 tariff adjustments, but one was a decrease Total Operating ratio Operating revenues Operating profit Operating revenues/operating costs Points Account receivables collection period Trade receivables(A) Sales (B) (A/B)*365- days Points Total points
1 2 2006 USD 299,322 429,797 0.70 0 2006 MDL 1,135 2,140 194 2 8
The results are analyzed in the final conclusions chapter where the decision regarding the introduction of Clrai in the 10 list towns is analyzed.
4.5
4.5.1
Technical Aspects
Specific Task Objectives Related to Technical Analysis The specific tasks of this sub assignment for the Pre-Feasibility Phase were clarified together with the Client in the beginning of the assignment. The tasks agreed were as follows: To prepare water and wastewater balances for 15 target towns to describe the present situation and water and wastewater projections for the year 2013; to assess the present status and condition of present water supply and sanitation facilities in 15 target towns in order to evaluate the need for replacements and/or needed rehabilitation on short-term basis; and to prepare preliminary short-term investment program for years 20092013 for the 15 target towns in order to improve and
rao1e 2005-01-17
SWECO INTERNATIONAL
develop the present functional level of their water supply and sewerage services. 4.5.2 Water supply and sewerage in Clrai Water is supplied via one (1) main water supply network (having length of approximately 64 km). Only approximately 9,000 inhabitants are currently connected to the water supply network while more than 7,500 inhabitants are dependable on private wells. Water intake consists of 12 deep wells, out of which three (3) wells are under renovation or taken out of use while nine (9) wells are in operation. Water storage consists of four (4) underground water tanks. Eight (8) wells serve the main water supply network, and one (1) deep well supplies a district directly without any water storage. The water supply system has four (4) water tanks. Water which is pumped directly from wells to the reservoir at pumping station PS2 is treated at chlorination plant. There is no water treatment for two (2) deep wells. The total length of main sewerage network is 34.9 km. Sewerage network has two (2) pumping stations out of which one (1) is the inlet pumping station for the WWTP, which is located some 2.2 km southeast from the town centre. Only 5,000 inhabitants out of 16,500 are connected to sewerage network while the rest are using septic tank system or dry lavatories. However, the number of septic tank users is not known. The wastewater treatment plant was taken into operation in 1986 representing complete biological treatment process. At present the treatment plant is not in use and only wastewater treatment method is stabilization in ponds before discharging into near by river. In the following sections the water and wastewater balances and the technical status of water supply and sanitation facilities as well needed investments on preliminary level have been described in detail.
rao1e 2005-01-17
SWECO INTERNATIONAL
4.5.3
Water Supply System
4.5.3.1
Present System
Water intake consists of twelve (12) deep wells, out of which three (3) are not operated while nine (9) are in use. The intake area is situated some 5 km east from Clrai town centre. Every operated deep well has a submersible pump, type Grundfos or ECV (see Table 4.5.1). Water storage consists of four (4) underground water tanks. The total capacity of water intake is 2,800 m3/day. Approximately 9,000 inhabitants out of 16,500 are currently connected to the water supply network.
Table 4.5.1: Submersible pumps used for water intake.
No./name of deep well 1 (Hospital) 2 (ADS) 3, 5, 9, 10 and 12 Tir Train Station
Pump type ECV 6-10-180 ECV 6-10-180 Grundfos ECV 6-10-180 ECV 6-4-140
Flow (Q), m3/h 10 10 10 10 4
The main part of the town is supplied from eight (8) deep wells, while a hospital together with a small residential area is supplied from the separate well (Nr.1). Seven (7) of used deep wells delivers water directly to the intake reservoir of intake pumping station PS2 while one (1) well (well No 2) is used to deliver water directly to intake reservoir of district pumping station PS3. All the water is delivered to distribution from district pumping station PS3 which receives water from intake pumping station PS2 and from well No 2. Used underground water tank within intake pumping station PS2 (1 intake water tank) has capacity of 1,000 m3 and underground water tank within district pumping station PS3 (1 intake water tank) has capacity of 3,000 m3. From PS3 water is partly pumped directly to distribution network and partly to two (2) separate underground reservoirs with capacity of 500 m3 each (1,000 m3 in total), situated at the highest point of the town. The main part of the town is supplied by gravity from these two reservoirs.
rao1e 2005-01-17
SWECO INTERNATIONAL
Water, which is pumped from well No 1 to hospital area and from well No 2 directly to PS3, has no treatment at all. The only treatment process used is chlorination to underground water tank at intake pumping station PS2. The chlorination is done automatically in the chlorination plant. At present, the quality of water from deep wells corresponds to Moldovan Normative on Potable Water, with exception of hardness and dry residuals (see Table 4.5.2).
Table 4.5.2: Analysed water quality provided by town of Clrai .
Parameter Colour Turbidity Odour Taste Hardness Dry residuals Nitrites Chlorides Sulphates Ammonia Coli form
Unit grade mg/l grade grade Mol/l mg/l mg/l mg/l mg/l mg/l bact/l
Requirement 20 1.5 2 2 7 1,000 45 350 500 2.0 3
Actual 0 0.4 0 0 17.7 1,250 13.3 42 401 0.05 1
Water distribution network consists of steel, cast iron and polyethylene pipes. The range of diameters is from 32 mm to 300 mm. The total length of network is 64 km. Different lengths and used pipeline materials and age of the network have been presented in Table 4.5.3.
Table 4.5.3: Water Supply Network in town of Clrai.
Material Steel and cast iron Polyethyl ene
DN 50-80 100-200 Sub-total 32-50 100 300 Sub-total Total
<10 years, km
10-20 years, km 10.0 10.0
20-40 years, km 14.0 14.0
40-50 years, km 15.0 15.0
15.0 6.0 4.0 25.0 25.0
10.0
6.0
15.0
Total km 10.0 29.0 39.0 15.0 6.0 4.0 25.0 64.0
rao1e 2005-01-17
SWECO INTERNATIONAL
4.5.3.2
In 2003, town of Clrai received a grant from the Government of Denmark which was used to renovate nine (9) deep wells and pumping stations PS2 and PS3. In General, centrifugal pumps and other mechanical equipment are in a good condition. Most of the mechanical parts were replaced and pumps are working at good efficiency rate. All deep wells have a protection area. Water meters are installed and operation is monitored. Existing chlorination plant is in a reasonable good condition and is operated properly. All water tanks are in use and are considered to be in good condition. During the past 5 years the water distribution network has partially been renovated and some kilometres of old cast iron and steel pipelines have been replaced with new polyethylene pipelines. However, most of the network is still made of steel being older than 20 years and only some 25 km of the network are covered by polyethylene pipelines. Un-accounted water losses in 2006 constituted 66,500 m3 (33% from the water volume pumped to the distribution). The main cause of water losses are often bursts in water network due to wear of the main pipes. The main cause is the obsolete status of the water networks, which constitutes 60-70%. Another cause is the status wear of interior water supply networks from the basements of the flat apartment houses which are maintained neither by householders nor by communal utility. Together with renovation of the existing network the main focus shall be paid in extension of network in order to provide water supply for more inhabitants.
4.5.3.3
Seven (7) deep wells which deliver water to intake pumping station PS2 with total capacity of 70 m3/h. PS2 is operated 20 hours per day. Well No 1 and No 2 with capacities of 10 m3/h and 4 m3/h are operated periodically to assure peak demand.
rao1e 2005-01-17
The only water treatment process used is chlorination to underground water tanks within PS2. Water which is pumped from wells No 1 and
SWECO INTERNATIONAL
No 2 is not treated at all. Pumped water flows are metered and operation is monitored. Water pumped to the distribution from used deep wells has considerably high hardness and it could be necessary to study alternatives to treat the water in order to reduce the water hardness. According to APA-Canal the better quality ground water sources could most probably not be found near by town of Clrai and only action to be considered (if ground water source is used) could be implementation of proper treatment process. At present, water is supplied to the town 20 hours per day (excluding wells No 1 and 2 which are operated only periodically). In addition to above mentioned, there are plans to connect the town of Clrai to a new water pipeline. This pipeline would connect Clrai to the water pipeline from town of Soroca. The investment is planned to be financed by the Government of Moldova. However, during the time of this study any financing decisions were not made. Currently the water supply network is divided into two (2) pressure zones; 1 zone supplied by gravity from two (2) reservoirs with capacities 500 m3 each, situated at the highest point of the town and 1 zone supplied directly by PS3 from intake water tank of pumping station PS3. Beginning of year 2007 there were 1,997 household-meters installed in apartments. The rate of metering for apartments is 92%. Level of metering for individual houses is 89.3%. All private apartment meters are size of DN 15 while size of meters installed at institutions and organizations vary from DN 15 to DN 50 depending on connection diameter. The consumption of unmetered consumers is considered 150 l/cap day. The energy efficiency for different water pumping stations (including intake wells) was calculated based on available data presented by Clrai Apa-Canal and given pump design parameters. Total energy consumption of pumping stations for water supply system in 2006 was 760,000 kWh. The average used energy consumption (kWh/m3) at different pumping stations was as follows:
rao1e 2005-01-17
SWECO INTERNATIONAL
4.5.4
Water intake, wells No 3-12: Water intake, wells No 1 and 2: PS2: PS3:
0.37 kWh/m3 0.7 kWh/m3 0.54 kWh/m3 0.28 kWh/m3
Sewerage System
4.5.4.1
Present System
The main sewerage network having length of 34.9 km is made of asbestos and cast iron pipelines. Network consist two (2) pumping stations out of which one (1) is the inlet pumping station for the WWTP and one (1) is used to pump sewerage from the town centre to the main pumping station of the wastewater treatment plant. WWTP is located some 2 km south-east from the town centre and some 2.2 km from the inlet pumping station. Only 5,000 inhabitants out of 16,500 are currently connected to network. WWTP, constructed in 1986, has a design capacity of 7,200m3/day and consists the following treatment units: - Horizontal grit removal (2 units); - Primary clarifiers (2 units) combined with primary sludge fermentation tanks (2 units); - Aeration tanks (2 units) and secondary clarifiers (4 units); - Contact stabilization tanks (2 units). - Sludge pumping station; - Sludge handling in sludge drying beds and sludge final disposal site; - Effluent wastewater treatment in biological ponds (2 units); and - Chlorination plant. At present only mechanical treatment (grit removal) and stabilization in biological ponds before discharging into river are in use.
4.5.4.2
The main sewerage network is from the end of 1960s and has not been renovated during past 40 years. The main material used is asbestos. Description of the sewerage network has been presented in the Table 4.5.4.
rao1e 2005-01-17
Table 4.5.4: Description of Clrai sewerage network.
SWECO INTERNATIONAL
Description Main collector 1 Main collector 2 Main collector 3 Street collectors and interior networks Total
Pipe Material Asbestos Cast Iron Asbestos Cast Iron
DN, mm 300 300 300 100150
Length, km 2.5 7.0 8.5 16.9 34.9
Operation period, years 21 40 48 21-48
The existing sewerage network (excluding pumping stations) could be considered to be in reasonable good condition. However, within this study any conditional analysis has not been carried out and it could only be estimated that at least proper flushing of pipelines and emptying of manholes will be needed. Still, the sewerage network covers only small part of the town and only some 30 % of inhabitants are currently connected to the sewerage system. In order to provide proper sanitation services the first priority regarding sewerage system would be enlargement of the network to cover more water consumers. In General, all mechanical equipment within two (2) existing sewerage pumping stations are in a very poor condition. Most of the mechanical parts are worn out and old pumps, valves and pipelines are at the end of their operational lifetime. Only one pump has been replaced by a modern pump (Grundfos). In addition to that there is no adequate monitoring for operation. Existing WWTP is at the end of its operational lifetime. Furthermore, the area where the plant is situated does not belong to the municipality, but to a nearby village of Tuzora and Clrai ApaCanal pays for rent of land. Taking into consideration the condition of existing structures and machineries and insufficient process technology it could be recommended that the whole treatment plant will be replaced with new modern and more compact WWTP taking into account current and future wastewater flows and loads. The new WWTP should be placed closer to the town on the area which belongs to the municipality. It shall be noted that within this study only visible conditional analysis were carried out and proper analysis of existing structures would be needed during next project phase.
rao1e 2005-01-17
SWECO INTERNATIONAL
4.5.4.3
Sewerage pumping station which serves the town district has capacity of 26 m3/h and is operated depending on the quantity of the incoming wastewater, average being 2-3 hours per day. The inlet pumping station to the WWTP with capacity of 160 m3/h is operated approximately 3 hours per day.
Table 4.5.5: Wastewater pumps.
PS District PS
Pump type CM 100/65/200 CM 100/65/200 CD 160/45 Grundfos FG-200/32
Status reserve operated reserve reserve operated
Head (H, design), m 65 65 45 35 32
Flow (Q, design), m3/h 26 26 160 300 300
Power (P, design), KW 11 11 37 46 100
Main PS
The wastewater volume received at WWTP in 2006 was 113,000 m3, including: - wastewater from private households, 68,400 m3; - wastewater from business technological repairs, 25,000 m3; and - wastewater from budgetary organizations, 19,600 m3. The treatment of wastewater is basically made only naturally in biological ponds thus process units and mechanical equipment within aeration and primary and secondary clarification are not in operational condition. The effluent quality in 2006 according to the analysis made by the Ecological Inspection has been presented in the Table 4.5.6.
Table 4.5.6: The effluent quality at Clrai WWTP in 2006.
rao1e 2005-01-17
Parameter SS BOD5 Ammonia Nitrates Phosphates
Inlet concentration 287 490 23 0.47 21.8
After treatment 76 165 21.8 0.38 16.7
requirement 5.0 3.0 0.5 0.08 0.5
SWECO INTERNATIONAL
Thus the lack of proper treatment facilities (treatment only in biological bonds) the wastewater quality does not meet the requirements set by Moldavian authorities. However, taken into consideration the treatment only in biological ponds the treatment result is reasonable good and reported SS reduction being 74 %, BOD5 reduction being 66 %. Test result indicates that the used method for taking samples from the effluent wastewater is most probably insufficient and real reductions could be on lower level than reported. In 2006 the local design company EIG-Proiect made a design for new WWTP. However, according to Clrai Apa-Canal the construction works have not been started due the lack of funds. The energy efficiency for district sewerage pumping stations was not calculated thus pumped wastewater amounts were not known. Based on available data presented by Clrai Apa-Canal and given pump design parameters the average used energy consumption for main sewerage pumping station was only 0.22 kWh/m3. This indicates that the actual pumped wastewater amount has been lower than reported. Total energy consumption of sewerage operations (excluding WWTP data was not available) in 2006 was 73,400 kWh. 4.5.5 Prioritising of needed Investments for years 20092013
4.5.5.1
In order to prepare preliminary water demand and wastewater projections the water and wastewater flows were analysed for the last three (3) years (20042006). Preliminary water demand and wastewater projections for the year 2013 are based on general assumptions as follows: - The connection rate to the water supply network is 85 %; - Per capita consumption in Clrai in 2013 is 120 litres/capita/day; - The connection rate to the sewerage system is 60 %; and - Wastewater flow will be significantly bigger due the connection of more industry utilities in the sewerage network.
rao1e 2005-01-17
SWECO INTERNATIONAL
In addition to above mentioned, some assumption related to rehabilitation of the water supply network were made as follows: - Due repairing and maintenance work and installation of new pipelines for new housing areas the amount of leakages from the water supply network have estimated to decrease some 20 %; - Due installation of new in-house flow meters and due better accounting system amount of unaccounted water is estimated to decrease some 15 % (billed water demand per capita will increase); and - Due better in-house flow measurement and possible increase in water tariffs per capita consumption has estimated to decrease some 10 %. Preliminary water and wastewater flow projections for Clrai are summarised below in Table 4.5.7.
Clrai
Population connected to the Water Supply network Population connected to the Sewerage network Water pumped to the Distribution Non-Revenue Water Average total flow to WWTP 4.5.5.2 Needed Investments
Year 2006 Value Unit 9000 capita 5000 capita 555 m3/d 62 33 % 20 308 62 l/cap/d % l/cap/d m3/d l/cap/d
rao1e 2005-01-17
Investment need estimations are done for the period of years 20072013 in order to secure sufficient operation of water supply and sanitation systems and to provide water supply and wastewater treatment for more inhabitants in Calarasi. The new water sources and/or pipeline to connect city of Calarasi by new water pipeline to
SWECO INTERNATIONAL
city of Balti have not been taken into consideration as short term investment needs. Thus the project to implement the water pipeline from city of Balti to Calarasi is under preparation and discussions on governmental level it is difficult to estimate needs for new investments related to water intake in city of Calarasi. It could be possible that in near future the government of Moldova makes the decision to extend the water pipeline from Balti to Telenesti and further to Calarasi. In that case the investment would be financed from the state budget. However, at this moment it is not known if the pipeline is even constructed to Telenesti or if the pipeline extension to Calari could be constructed until year 2013. Still, it would be feasible to wait until this issue is solved between the government authorities and city city of Calarasi. Due this reason, the investments on new water treatment plant (to remove hardness from the ground water) for city of Calarasi has not considered to been feasible as proposed short-term investments. Short-term investments needed for water supply system are listed below, and serves as a basis for the proposed investment packages: - Rehabilitation of 3 existing deep wells for increasing the volume of produced water; - Rehabilitation of network which is older than 30 years (> 20 km); - Continuing of installation of in-house water meters; - Construction of new network including household connections and in-house water meters for new consumers for at least 5,000 inhabitants (>20 km); and - Procurement of leak detection equipment, asphalt cutter machine. In general, both sewerage network and WWTP require urgent rehabilitation and reconstruction works to enable reliable operation of the network and to fulfil the treatment requirements set by Moldovan authorities. The investments needed for sewerage system are listed below, and serves as basis for the proposed investment packages: - Flushing of existing sewerage network; - Enlargement of the network to cover at least 9,000 new inhabitants; - Reorganising the existing septic tank emptying system including supply of proper vehicle for this purpose;
rao1e 2005-01-17
SWECO INTERNATIONAL
- Procurement of sewerage cleaning equipment; - Complete renovation of district and WWTP inlet pumping stations; and - Construction of new WWTP for capacity of 1,200 m3/day.
4.5.5.3
Preliminary cost estimations for proposed investments packages within water supply and sanitation services are only preliminary estimations and will only be used as help in preparation of suitable investment packages in Feasibility Phase of the project. Proposed investment packages have been prepared so that there are two different packages; 1st investment package for works which shall be carried out in the very near future (within 1-2 years) and 2nd investment package for other works which must be implemented in order to secure the water and sanitation operations in long term: 1st Investment Package: 1.2 million USD in total Renovation of existing water intakes and construction of 10 km of new water supply network, 1.0 million USD; and Supply of 1 new vehicle to be used for flushing sewerage system and 1 vehicle for septic tank emptying purposes, 0.2 million USD. 2nd Investment Package, 8.0 million USD in total Rehabilitation of 20 km of water supply network and construction of 10 km of new water supply network, 3.0 million USD; and Renovation and/or construction of 20 km of sewerage network including renovation of sewerage pumping stations and construction of new WWTP, 5.0 million USD.
rao1e 2005-01-17
SWECO INTERNATIONAL
5
5.1
Cueni
General
Cueni town is located in the south-east part of Republic of Moldova, at a distance of 83 km from the capital town.
Figure 5.1.1: Location of Cueni

rao1e 2005-01-17
SWECO INTERNATIONAL
The official number of inhabitants is around 20500. The real number was, despite emigration to other countries and to other places in Moldova, by the Mayor and persons met estimated to be 21000, as there is a not registered immigration to Cueni from the surrounding rural areas. Some of those who left the town for other countries and rural areas in Moldova have now started to come back and also opened new business in the town. The industry in the town stopped almost completely during the worse years, but now at lest 50% of the capacity is used again. Foreign investors will start a factory for readymade clothes. There were during many years only few children in the day nurseries, but now they are full. Water supply has increased from a low standard to 18 hours per day. The Mayor, the Apa-Canal Director and others met are therefore optimistic for the future development of the town. The town is just now planning a new district for 600 lots for small houses.
5.2
5.2.1
History The first water services in Cueni date back to mid 40ies. The water and wastewater services together with other municipal technical services were then state owned and operated under the local authorities. In 2000 water and wastewater and all other technical services, such as street cleaning and solid waste management, were transferred to the town and functioning as a department in the town council. In 2004 the Town Council of Cueni started a separate ApaCanal. The Mayor and the Director think the state owned water services were better for the economy of the utility, as subsidies were regular and the central ministries decided tariffs covering all costs. The municipal budget does not allow any regular subsidies, and the local Town Council, consisting of many retired persons, has so far not approved enough high tariffs. Apa-Canal has therefore a tough public information work ahead to learn its customers understand the need for tariffs covering all costs. They believe anyway it will be possible to raise the tariffs enough also to cover costs for a new loan. They compare with the investments for natural gas already carried out. When installation of natural gas made life better, people were willing to pay.
rao1e 2005-01-17
SWECO INTERNATIONAL
5.2.2
The Owner. How the Owner Governs Apa-Canal The Municipality is the owner of the Municipal Services Utility, and the company is from organizational point of view placed as a department in the Town Administration under the Town Council. The Town Council appoints the Director. The present Director came to the utility 3 years ago. Before that he was during one and a half year director for the district heating company. He is fully entitled to take any decision in the daily operation of the utility. He has tight contacts with the owner and meets the Mayor every Monday and the Town Council every second week.
5.2.3
Legal Aspects The Communal Services Utility has its own statutes but no separate service agreement with its owner describing for instance the level of service to the customers. The owner keeps according to the Mayor anyway the service quality under control. There is also a written schedule for water supply. The Municipality is the owner of all the assets, and Apa-Canal operates them. The town had previously, in addition to the Moldavian state regulatory framework, local regulations for industries discharge of effluents to the municipal wastewater system. They are now planning to prepare new regulations.
5.2.4
Organization and Management The organization chart for the Municipal Enterprise Apa-Canal in Cueni is presented below. The Director makes changes then and then in the organization and a new change is probable after the elections in June.
rao1e 2005-01-17
SWECO INTERNATIONAL
Director
EngineerChief
Power and mechanical engineer Water supply and sanitation engineer WWTP engineer
SecretaryAssistant
Chief of consumer department
Economist
HR Manager Lawyer
Chief Accountant Goods bookkeeper Salary bookkeeper Accountantcashier
Purchasing agents (2)

Economic pattern consumer inspector
Population consumer inspector
Storekeeper
Meter installers (2)
Figure 5.2.1: Organization of Communal Services Utility Cueni
The utility has no formal management team. The Director has daily meetings with approximately 10 of the heads of departments and others for the daily operation. He has also meetings with the chief engineer, the accountant and the person responsible for energy. There are no minutes of meetings. These meetings include also the main internal information in the utility. The Communal Services Utility has 2 own computers and 1 borrowed. One is used for accounting and two commercial activities such as billing. They are now planning to include also supply, material and pay roll. They are using software 1C. They have an IT specialist training the personnel. The type of management is, as in most companies visited, to major extent a top-down management with information upwards and orders downwards. Principals of accountable management or management by objective are not known. The Director is to some extent using bonuses and other incentives for some of the personnel. As an example the Director has decided a minimum amount to be collected by the collectors. If they are more successful, they are getting a part of the money exceeding the minimum collection level. Workers may also sometimes work at piece-rates. The director estimates the time
rao1e 2005-01-17
SWECO INTERNATIONAL
needed for a certain work, and if the work is carried out in a shorter time the workers will be paid according to the estimated time. The heads of departments have to follow a given budget but they have no incentives and no formal rights supporting their work. The utility carried out the last major investment in year 2006. The project included new equipment for 400000 lei to a pumping station. The Director and his personnel organized and managed the project. 5.2.5 Staff. Efficiency and training needs Apa-Canal has now 66 employees. When the Director came 3 years ago there were 104 employees. The number of employees will continue to decrease. As the number of number of inhabitants connected to the water services is 5216, the productivity based on this is 79 consumers per employee. The number of connections is 2321 and to companies and budget organizations 152, thus in total 2473 connections. The efficiency based on this figure is 37 connections per employee. The average age of the staff is around 35 years. The level of training and education is rather good. Five persons in the informal management team have university degree and a number of other persons have other medium and high degree studies. Training is anyway needed in all areas, but the utility has no plan for training as they do not have any financial means for supporting this. The Director is convinced that training is needed and would be interested also in financial support if the company had a better economy. Periodic training seminars in the technical issues, e.g. last technology developments in wastewater treatment, pumps, electric motors, etc. and seminars in financial and safety issues, etc would support the development of the utility. The average salary is according to the Director enough high for keeping important staff but not for attracting new personnel. The utility can however not always pay the salaries in time due to its financial situation. Two of the interviewed persons said that it is possible to keep personnel in the utility only because they have no alternatives in Cueni.
rao1e 2005-01-17
SWECO INTERNATIONAL
5.2.6
Estimation of Consumption. Billing and Collection 96% of all the customers have meters, 2986 meters in apartment houses and 2028 meters in individual houses. The customers own the meters. Consumption norms, 150 litres/day and person, are used for customers without meters. Collectors from Apa-Canal are reading the meters. There are 6 collectors, which means that per collector there are approximately 840 customers with meters plus some costumer without meters. The collectors distribute the bills monthly when reading the meters. The customers may pay at Apa-Canal, in banks and in post offices. The collection rate 2006 was slightly over 100% during 2006, which can be seen below. Billed for business entities in 2006 - 1234026 lei. Paid by business entities in 2006 1309724 lei. Billed for population in 2006 1219835 lei. Paid by population in 2006 1262526 lei. This is a high figure considering the economic situation in the town. A doctor has less than 100 USD per month in salary. The pension is around 400 lei per month. For a family with two persons working, payment of services may take around 50% of the total income according to one of the interviewed persons. In case a customer does not pay, Apa-Canal has three steps of actions: 1) Notification, 2) suing to court if the debt is over 100 lei and 3) Cutting of the supply.
5.2.7
Relations to customers and other stakeholders The utility gives information to its customers in media, especially in the local TV, which gives best result. Customers are often calling. The meter readers give also information. Visits from school classes or other groups have not happened yet, but the Director is interested in the idea. This is more or less what is done. Therefore there is much more to do for the utility to improve its relations to the customers and the society.
rao1e 2005-01-17
SWECO INTERNATIONAL
5.2.8
Consultants Comments The utility has had a good development during the three last years: reduction of personnel to almost half the number, increased time of water supply per day, rather young personnel, high collection rate despite harsh economic situation in the town. The level of education is rather good. Despite these improvements there are many areas to improve, such as IT, type of management, level of training and education to mention some. The staff efficiency, 37 connections per employee (or 79 consumers per employee), is low. The rate of meters, 96%, is good. The company has very close contacts with its owner and the roles of the owner and operator can probably be better defined and more separated for better use of each partys capacity. Also the form of management may be improved, as in most of the utilities visited. Further comments, see section 15.
5.3
5.3.1
Social environment in Cueni
5.3.1.1
Population
Number of population for Cueni Town as at 1st of January 2007 is the following:

(Thou.) 20.5 20.5 1.3 20.5
rao1e 2005-01-17
SWECO INTERNATIONAL
5.3.1.2
Education and health
Education institutions are the following: 2 gymnasiums, 3 theoretical high schools Mihai Eminescu, A Puskin. and A. Mateevici, a polyvalent school and 6 preschooler institutions. Health system is composed of Cueni Hospital with 450 beds and more than 100 doctors and nurses. The Centre of family doctors has 40 doctors and 58 assistants.
5.3.1.3
Estimation of Household Revenues Average nominal monthly salary - National level Average nominal monthly salary - Cueni County Disposable household income (national average per household member) Average monthly pension (national level) Average household disposable income in the county (per member) Average monthly pension at county level Number of persons in household Average household (no of persons) Pensioner household (no of persons) Average household disposable income in the county (per household) Average monthly pensioner household revenues at county level (per household) Lei Lei Lei Lei Lei Lei
Cueni 2004 2005 1,103.1 1,318.7 706.0 870.5 491.4 325.3 314.5 208.2 568.6 383.4 375.3 253.1
No. No. Lei Lei
3.0 1.8 943.5 374.8
3.0 1.8 1,126.0 455.6
5.3.2
Economic environment in Cueni
5.3.2.1
rao1e 2005-01-17
Natural resources
Total surface of the town is 10,030 ha out of which the agricultural fields are representing 5,980 ha (59.6%).
SWECO INTERNATIONAL
5.3.2.2
Total length of public roads is 73.5, out of which 29.2 km are asphalted.
5.3.2.3
Economy
Cueni has a developed economy. In town are 125 companies with limited liability, 332 individual enterprises and 3 agricultural households.
5.3.2.4
Industry
Main branches of the economy are: alimentary industry, bakery industry and construction industry. Volume of industrial production in Cueni Raion, compared to the total industrial production in Republic of Moldova, is presented in the following table:
Table 5.3.3: Volume of Industrial Production Evolution Cueni Raion
Volume of industrial production in 2006 Total out of which Cueni
Total production on Republic of Moldova increased with 26% during the period 2004-2006. For Cueni Raion, the production increased significantly in 2005 with 42%, and decreased in 2006, compared to 2005, with 23%.
5.3.2.5
Financial situation of Commercial Companies in Cueni Raion, compared to the total financial situation of Republic of Moldova, is presented in Table 5.3.4. As can be observed from the table, the number of profitable enterprises is increasing at national level, but the percentage of
rao1e 2005-01-17
SWECO INTERNATIONAL
profitable enterprises in total approximately the same (46%).
reporting
enterprises
remains
Average number of employees at national level kept a stable trend. In Cueni Raion, during the analyzed period, the average number of employees registered a decrease of 14%. Financial result before tax recorded a negative value in 2004. However, in 2005, the financial result was positive (7 mil lei) and continued to increase 2.5 times in 2006, to a value of 17.6 mil lei.
Financial status Number of reporting enterprises, out of which Profitable enterprises Enterprises with loss Average Number of employees Financial result before tax (profit/loss) -mil. Lei Sales revenues-mil. Lei Receivables related to commercial invoices and budget compensation -total, mil. Lei Debts -mil. Lei
Jan.-Sept. 2004 Total Cueni

29423 11289 13906 572786 2790 53031 266 116 104 6620 -17.1 252.4

31870 12380 14893 570143 3424 66870 293 119 123 6392 7 370.4

34700 13155 16532 569698 3689 79052 335 116 154 5641 17.6 369.8
19140
155.7
22717
193.7
26867
199.2
61291
496.9
68420
612.1
81804
629.1
Sales revenues increased considerably in 2005 (47% compared to 2004) and continued with a stable evolution in 2006. Receivables related to commercial invoices and budget compensation recorded a growth of 24% in 2005 and a growth of 3% in 2006. During the analyzed period, debts increased with 23% in 2005, continuing with a growth of 3% in 2006, compared to 2005.
rao1e 2005-01-17
SWECO INTERNATIONAL
5.4
5.4.1
Financial Aspects
5.4.2
5.4.2.1
Table 5.4.1: Operating result evolution - Cueni
Source: Water Utility from Cueni
2004 136.7 133.0 3.7 166.4 12.1 3.3 59.8 46.0 13.8 21.6 16.0 27.3 26.2 (29.6)
2005 157.3 153.0 4.3 181.2 15.0 3.9 80.2 62.2 18.0 22.5 33.5 20.6 5.5 (23.8)
2006 180.2 171.5 8.7 213.4 10.2 2.6 105.8 82.7 23.2 16.7 39.2 32.5 6.4 (33.2)
In 2006, all operating revenues result from water supply. The total operating result is negative for the entire period of analysis. The evolution of the structure of operating revenues is presented in the following chart:
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 5.4.1: Structure of Sales - Cueni

Structure of Sales
140.0 120.0
Thousand USD/year
100.0 80.0 60.0 40.0 20.0 2004 2005 2006
Water Wastew ater
The level of revenues increased in the last years as result of a combined effect of invoiced quantity increase combined with adjustment of tariffs. The evolution of the water losses is presented in the table below:
Table 5.4.1: The Evolution of Non Revenue water 2004-2006 - Cueni
2004 Th. m3 338.3 123.0 -64%
2005 Th. m3 347.6 171.8 -51%
% 3% 40%
2006 Th. m3 370.1 180.9 -51%
% 6% 5%
Table 5.4.2: The Evolution of Invoiced quantity 2004-2006 - Cueni
Evolution of invoiced quantity Water Inhabitants Private companies and institutions Waste water
2004 Th. m3 123.0 113.5 9.5 69.6
2005 Th. m3 171.8 158.8 13.0 99.1
2006 % Th. m3 39.7% 180.9 39.9% 166.5 36.8% 42.4% 14.4 109.1 % 5.3% 4.8% 10.8% 10.1%
rao1e 2005-01-17
SWECO INTERNATIONAL
Inhabitants Private companies and institutions

47.5 22.1
72.8 26.3
53.3% 19.0%
72.8 36.3
0.0% 38.0%
The water consumption increased in the last years mainly as result of increase of water delivered to both inhabitants and companies and institutions The weight of water delivered to companies and institutions is low (represents only 8% in total invoiced water). Because the level of tariff for companies and institutions is significantly higher than for domestic customers, these entities have the tendency to find water from other sources (have their own sources) and to pay only sewerage services to the utility. The delayed adjustment of tariff compared with the cost increases had a negative impact on the performances of the water utility. The water utility cannot control the tariff adjustment process, which is the prerogative of the Local Council. The water utility can propose tariff increases based on cost increase but the Local Council takes the final decision. The evolution of the structure of total operating costs is presented in the following chart:
Figure 5.4.2: The Structure of Operating Costs - Cueni
Structure of operating cos ts 15.2%
E nergy
16.8%
18.4%
O ther costs
49.6%

rao1e 2005-01-17
The most important cost elements are personnel costs (wages, salaries and related taxes), which represents 49.6% of operating
SWECO INTERNATIONAL
expenditures in 2006 and other costs, which represents about 16.8% of operating expenditure in 2006. The salaries have increased in nominal terms every year. The increase of salaries has to be performed based on premises stipulated in the law regarding evolution of salaries in the public sector. The evolution of operating costs is presented in the following chart:
Figure 5.4.3: Evolution of operating costs - Cueni

120.0 100.0 Thousand USD/ye 80.0 2004 60.0 40.0 20.0 E nergy P ersonnel (salaries and related taxes) O ther costs 2005 2006
Personnel costs have increased considerably during the analyzed period. Energy cost increased also in 2006, after a decrease in 2005, while other costs recorded a decreasing tendency over the period.
5.4.2.2
Table 5.4.3: The Level of Account Receivables as at December 31, 2006 - Cueni
rao1e 2005-01-17
31.12.2006 USD % 16,642 87.7% 2,327 12.3% 0.0% 18,969 100.0%
SWECO INTERNATIONAL
The management of the company needs to have among its priorities the increasing of the collection level. In the last years the water utility succeeded to maintain its collection ratio to high levels. In the current conditions, it is important to maintain the level of the outstanding debt at low levels (at least to maintain this level constant) to be able to generate sufficient cash to pay the current obligations (mainly the energy bill). This is essential for a sound development. The level of short-term liabilities has increased continuously during the period. A breakdown of the short-term liabilities is presented in the following table:
Table 5.4.4: Evolution of short-term liabilities (amounts in Thousand USD) - Cueni
2004 40.8 8.1 13.8 4.5 1.6 12.8
2005 46.7 9.1 12.8 11.2 3.9 9.7
2006 66.2 10.7 21.9 7.5 7.3 18.8
Aging of liabilities to the social fund is presented in the following table:

Table 5.4.5: Aging of liabilities to social fund - Cueni
31.12.2006 USD % 7,394 100.0% 0.0% 0.0% 7,394 100.0%
Table 5.4.6: Aging of liabilities to state and local budgets - Cueni
rao1e 2005-01-17
31.12.2006 USD USD 15,449 71.0% 6,304 29.0% 0.0% 21,753 100.0%
SWECO INTERNATIONAL
5.4.2.3
Tariff analysis
Figure 5.4.4: Water Tariff Evolution - Cueni
3.00 2.50 2.00 D estic om custom ers Instutions
2.68 2.68
2.62 2.62
2.51 2.51
2.56 2.56
USD/m
1.50 1.00 0.50 2004 2005 2006 2007 0.37 0.36 0.40 0.47
The last tariff increase for water services was in January 2007. Water tariffs for domestic customers were adjusted in 2006 and 2007 while the tariffs for companies and institutions remained the same over the period. The tariff evolution of the wastewater services for the last years is presented in Figure 5.4.5.
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 5.4.5: Sewerage Tariff Evolution Cueni

1.20
1.08 1.08
1.06 1.06
1.01 1.01
1.02 1.02
1.00 D estic om custom ers
0.80
USD/m
0.60 0.47 0.40 0.32 0.38 0.32
P ublic Institutions
0.20
2004 2005 2006 2007
Only the wastewater tariffs for domestic consumers were adjusted during the period. For the future the utility should consider the possibility and to take all the necessary actions to adjust the tariff more often to avoid the negative effects of the cost increases due to the inflation. In the future the water utility will have to cover also the possible debt service related to the loan from the World Bank. Briefly, the methodology for approving tariffs consists of the following steps: The utility specialists are preparing a study for tariff adjustment The study is sent to the Local Council and ANRE for approval.
According to the management team of the utility, the level of approved tariff is usually lower than their request. The management team considers that a tariff increase will solve most of the financial problems of the utility. One of the most wide spread idea about tariff increase in Moldova is to increase more of tariffs for private entities and institutions and to increase less the tariffs for inhabitants. In most of the cases this is mainly a political decision with the purpose of maintaining a lower pressure on the domestic customers.
rao1e 2005-01-17
SWECO INTERNATIONAL
This approach leads to an increase of the cross-subsidization between entities (private companies and institutions) and inhabitants. This discourages the economic development.
5.4.2.4
Even if the utility has recorded achievements in the last years, financial management is still far from the requirements of a modern utility. A lack of skills and human resources leads to limitations in the activities performed by the Finance Department. The accounting department consists: 1 chief accountant, 1 economist, 2 accountants, and 1 cashier. The company has 3 computers: 2 for keeping records on population and 1 for accounting. Company has software for accounting, made by companys programming stuff. They are on the way to enter the accounting data into the computer. The financial management is limited to good management of payments, and is unable to give effective support to the overall management decision-making process, particularly the good management of the growth potential. Without minimizing the technical and implementation problems that the utility has to face in the near future, the financial planning area is most in need of enhancement and restructuring efforts. We recommend the introduction of cost accounting by creating cost centres for the main activities (water and sewerage). There is important to find out the performances of each sector. We recommend the extensive use of computer for financial management. Accounting, billing and collection, financial forecast are just a few items which can be performed more efficient by using a computer. Even if the utility has only one computer, its degree of usage is still very low. The process of financial planning does not include all the parties that should be involved with financial planning matters and has not the necessary prediction-correction role.
rao1e 2005-01-17
The management team of the utility has to prepare a long-term strategy to assure the sustainable development. This analysis can be
SWECO INTERNATIONAL
used as a starting point in preparing this strategy. Without a clear strategy for sustainable development of the activity, the utility continue to survive but with very limited potential and lower and lower performance. 5.4.3 Financial Selection Criteria By applying the criteria mentioned under section 2.4.3, the scores obtained by the water Operator from Cueni are presented in the following table:
Table 5.4.7: Scores for the Water Utility from Cueni
Historical liabilities Liabilities to Suppliers, Social Fund and State of Local Budgets Total Operating revenues Weight of Liabilities in Total Revenues Number of points Tariff adjustment Last tariff adjustment was in January 2006 In the period 2004-2007 there was only 1 tariff adjustment Total Operating ratio Operating revenues Operating profit Operating revenues/operating costs Points Account receivables collection period Trade receivables(A) Sales (B) (A/B)*365- days Points Total points
rao1e 2005-01-17
2006 USD 66,163 180,198 36.7% 6 Points 4 3 7 2006 USD 180,198 213,402 0.84 0 2006 MDL 245 2,253 40 10 23
SWECO INTERNATIONAL
The results are analyzed in the final conclusions chapter when the decision regarding the introduction of Cueni in the 10 list towns is analyzed.
5.5
5.5.1
Technical Aspects
Specific Task Objectives related to Technical Analysis The specific tasks of this sub assignment for the Pre-Feasibility Phase were clarified together with the Client in the beginning of the assignment. The tasks agreed were as follows: To prepare water and wastewater balances for 15 target towns to describe the present situation and water and wastewater projections for the year 2013; to assess the present status and condition of present water supply and sanitation facilities in 15 target towns in order to evaluate the need for replacements and/or needed rehabilitation on short-term basis; and to prepare preliminary short-term investment program for years 20092013 for the 15 target towns in order to improve ad develop the present functional level of their water supply and sewerage services.
5.5.2
Water supply and sewerage in Cueni Water is supplied via one (1) main water supply network, having length of approximately 92 km. Only some 5,200 inhabitants are currently connected to the water supply network while more than 15,000 inhabitants are dependable on private wells. Water intake consists of ten (10) deep wells, out of which only two (2) are in operation while eight (8) wells are taken out of use while. Water storage consists of three (3) underground water reservoirs. From wells water is first pumped to two (2) water reservoirs located at pumping station PS2. Chlorination is done manually by dozing chlorine solution directly to the water reservoirs. Water distribution network has two (2) separate pumping stations which are used to increase the pressure for multi-storey buildings.
rao1e 2005-01-17
SWECO INTERNATIONAL
The total length of main sewerage network is 44 km. Sewerage network has four (4) sewerage pumping stations out of which one (1) is the inlet pumping station for the WWTP. Only some 3,000 inhabitants out of 20,500 are connected to sewerage network while the rest are using septic tank system or dry lavatories. However, the number of septic tank users is not known. The wastewater treatment plant was taken into operation in 1956 and was extended with tertiary treatment in 1985. At present, biological or tertiary treatment is not in use and only treatment method used is stabilizing in biological ponds. In the following sections the water and wastewater balances and the technical status of water supply and sanitation facilities as well needed investments on preliminary level have been described in detail. 5.5.3 Water Supply System
5.5.3.1
Present System
Water intake consists of ten (10) deep wells, out of which only two (2) are in use. Both operated deep well has a submersible Moldovan made pump, type ECV with capacities of 63 and 10 m3/h. Water storage consists of three (3) underground water tanks. The total capacity of operated wells is 1,800 m3/day. Approximately 5,200 inhabitants out of 20,500 are currently connected to the water supply network. From deep wells water is first pumped to two (2) separate underground water reservoirs (capacities 150 and 250 m3) located at intake pumping station PS2. From PS2 water is partially delivered directly to the network and partially to one (1) underground water reservoir (with capacity of 3,000 m3) located in the town centre. From this reservoir water is supplied to the network by gravity. The only treatment method used is chlorination to underground water reservoirs within PS2. There is existing chlorination plant located at pumping station PS2 site but it is badly worn out and is taken out of use. Dilution and dozing of chlorine solution is done manually directly to the water reservoirs. The data of water quality from deep wells was not available during this study.
rao1e 2005-01-17
SWECO INTERNATIONAL
In addition to above mentioned water distribution network has two (2) separate pumping stations which are used to increase the pressure for multi-storey buildings. Capacities of different pumping stations are presented in Table 5.5.1.
Table 5.5.1: Centrifugal pumps used for pumping stations.
Nr of deep well PS2
Pump type K 100-65/250 K 60/80
Head (H, design), m 65 20
Flow (Q, design), m3/h 90 50
Booster station for 9-level K 20/30 60 20 buildings Booster station for 5-level K 8/18 18 8 buildings Water distribution network consists of steel, cast iron and polyethylene pipes. The range of diameters is from 32 mm to 300 mm. The total length of network is 92 km. Different lengths of used pipeline materials and age of the network have been presented in Table 5.5.2.
Table 5.5.2: Water Supply Network in town of Cueni.
Material Steel
DN 32-50 70-100 150-200 250-300 Sub-total 100-150 200 250-300 Sub-total 50-100 100 Sub-total Total
< 10 years, km
10-20 years, km
1.1 1.1
Cast iron
20-30 years, km 18 5.0 6.8 0.8 30.6 8.3 1.2 2.8 12.3
30-40 years, km
6.1 6.1
<40 years , km 5.5 7.5 10.5 3.6 27.1 3.5 0.8 4.3
Total km
58.8
22.7 10.3 91.8
Polyethy lene
3.9 6.4 10.3
5.5.3.2
rao1e 2005-01-17
All used pumps within operated deep wells and pumping stations were replaced with Russian made pumps in 2006 and are considered
SWECO INTERNATIONAL
to be in a reasonable good condition. However, pumps are working at a decreased efficiency rate. Both operated deep wells are equipped with flow meters. Existing chlorination plant is in a poor condition and is not operated. Existing machinery is not in use and dilution and dozing of chemical is carried out manually. During the last 40 years the water distribution network has not been renovated at all. However, there is existing design for replacement of some 3 km of main pipeline and it is informed by Apa-Canal that financing for this investment would be available from National Ecological Fund. The technological losses in the town of Cueni according to the calculations of Technical University of Moldova constitute 39.2% of produced water while the total losses are 51.1 %. The main cause of water losses were reported to be bursts due to wear of old pipelines. Furthermore, most of reported bursts were registered within household connections. Reported bursts in 2003 there were 24 units while in 2004 it was 31 units and in 2005 51 and in 2006 54 units. The highest rate of bursts was registered from the steel network with size of DN 100 DN 200. Together with renovation of the existing network the main focus shall be paid in extension of network in order to provide water supply for more inhabitants.
5.5.3.3
The deep well No. 2 with a capacity of 63 m3/h operates permanently. The well No. 3 with a capacity of 10 m3/h is used as a reserve well and operates periodically to cover peak demand. At present, Cueni water utility is intended to drill a new deep well in Valul lui Traian district (currently design is undergoing) which will assure necessary water demand. The only water treatment process used is chlorination to underground water tanks. Dilution and dozing of chlorine solution is done manually directly to the water reservoirs. Pumped water flows are metered.
rao1e 2005-01-17
SWECO INTERNATIONAL
PS2 is operated between 6:00 - 24:00 hrs. District pumping stations (for multi-storey buildings) are operated between 6:00-9:00 hrs, 12:00-14:00 hrs and 17:00-20:00 hrs. Currently the water supply network is divided into two (2) pressure zones; zone 1 supplied from pumping station PS2 and zone 2 supplied by gravity from the reservoir with capacity 3,000 m3. Due to high wearing of the existing network the pressure is kept at 2.2 to 2.5 bars to avoid huge leakages. Beginning of year 2007 there were 5,014 household-meters installed, including 2,986 in private apartments and 2,028 in individual houses. The level of population within metering covers 96 %. Level of metering for institutions and business entities is 100 %. All private apartment meters are size of DN 15 while size of meters installed at institutions and organizations vary from DN 15 to DN 50. The energy efficiency for water supply pumping stations was not calculated thus pumped water amounts and used energy consumptions were not known. Total energy consumption of water supply operations in 2006 was 508,000 kWh. 5.5.4 Sewerage System
5.5.4.1
Present System
The main sewerage network having length of 44.2 km is made of asbestos, cast iron and ceramics pipelines. Network consist four (4) pumping stations out of which three (3) are in use; one (1) is the inlet pumping station for the WWTP and the other two (2) are used to pump sewerage from different part of the town to the inlet pumping station of the wastewater treatment plant. WWTP is located some 1 km east from the town centre. Only some 3,000 inhabitants out of 20,500 are currently connected to network. WWTP, constructed in 1956, has a design capacity of 10,000 m3/day and consists the following treatment units: Grit removal (2 units); Primary multistage decanters (10 units); Biological filters (2 units) Aeration tanks (8 units);
rao1e 2005-01-17
SWECO INTERNATIONAL
Secondary clarifiers (2 units); Biological ponds (2 units); Sludge pumping building and blowers station; Sludge disposal site; Chlorination plant; and Contact stabilization tank.
At present the biological treatment is not in use and only wastewater treatment method used stabilization in biological ponds. There is a separate storm-water system in Cueni, which discharges water directly to Botna river. The system doesnt belong to Cueni Apa-Canal but is property of Cueni Waste Management Utility.
5.5.4.2
The main sewerage network is more than 30 years old and has not been renovated during past 30-40 years. The main material used is asbestos, ceramics and cast iron. Description of the sewerage network has been presented in the Table 5.5.3.
Pipe Material
DN 400 300 250 200 150 100 250 200 250 200 160 300 100
Length, km 2.1 5.8 2.9 3.3 2.9 3.8 2.4 3.4 2.2 6.0 3.6 4.6 1.3 44.2
Asbestos
Cast iron Ceramics Cast iron 1

1
Operation period, years 40 30-40 30-40 30-50 25-40 30-50 25-40 25-40 40-50 30-50 35-50 30-50 20-30
Total
Pressure pipeline
rao1e 2005-01-17
The existing sewerage network (excluding pumping stations) could be considered to be in reasonable good condition. However, within this study any conditional analysis has not been carried out and it could only be estimated that at least proper flushing of pipelines and
SWECO INTERNATIONAL
emptying of manholes will be needed. Still, the sewerage network covers only small part of the town and only some 58% of all consumers and 17 % of inhabitants are currently connected to the sewerage system. In order to provide proper sanitation services the first priority regarding sewerage system would be enlargement of the network to cover more water consumers. In General, all mechanical equipment within three (3) operated pumping stations are in a very poor condition. Most of the mechanical parts are worn out and old pumps, valves and pipelines are at the end of their operational lifetime. In addition to that there is no adequate monitoring for operation. Also, existing Wastewater Treatment Plant is at the end of its operational lifetime. Taken into consideration the condition of existing structures and machineries and insufficient process technology it could be recommended that the whole treatment plant will be replaced with new modern and more compact WWTP taken into account current and future wastewater flows and loads. For new WWTP there is a possibility to use area reservation next to the existing plant. It shall be noted that within this study only visible conditional analysis were carried out and proper analysis of existing structures would be needed during next project phase.
5.5.4.3
Sewerage pumping station which serves the Old Cueni district having capacity of 100 m3/h operates depending on the quantity of the incoming wastewater, average being 3-4 times per day for 20-25 minutes. Pumping station from Stadion district pumps water for 15-20 minutes in every 1.5 hours. The inlet pumping station to the WWTP operates approximately 20 minutes per hour. The wastewater volume received at WWTP in 2006 was 109,000 m3, including some 73,000 m3 from private households, some 27,000 m3 from business utilities and some 9,100 m3 from institutional consumers. At present the biological treatment is not in use and only wastewater treatment method used stabilization in biological ponds. The effluent quality in 2006 has been presented in the Table 5.5.4.
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 5.5.4: The effluent quality at Cueni WWTP in 2006.
Parameter pH SS Dry residuals BOD5 Chlorides Ammonia Nitrites Phosphates
Unit mg/l mg/l mg/l mg/l mg/l mg/l mg/l
Effluent concentration 8.1 25.9 818.0 106.0 89.3 17.5 0.3 2.9
Requirement < 8.5 5 1,000 3.0 300 0.5 0.08
Thus the lack of proper treatment facilities the wastewater quality does not meet the requirements set by Moldovan authorities. The energy efficiency for sewerage pumping stations was not calculated thus pumped wastewater amounts were not known. Total energy consumption of sewerage operations in 2006 was 32,000 kWh. 5.5.5 Prioritising of needed Investments for years 20092013
5.5.5.1
In order to prepare preliminary water demand and wastewater projections the water and wastewater flows were analysed for the last three (3) years (20042006). Preliminary water demand and wastewater projections for the year 2013 are based on general assumptions as follows: - The connection rate to the water supply network is 60 %; - Per capita consumption in Cueni in 2013 is 160 litres/capita/day; and - The connection rate to the sewerage system is 50 %. In addition to above mentioned, some assumption related to rehabilitation of the water supply network were made as follows: - Due repairing and maintenance work and installation of new pipelines for new housing areas the amount of leakages from the water supply network have estimated to decrease some 25 %;
rao1e 2005-01-17
SWECO INTERNATIONAL
- Due installation of new in-house flow meters and due better accounting system amount of unaccounted water is estimated to decrease some 20 % (billed water demand per capita will increase); and - Due better in-house flow measurement and possible increase in water tariffs per capita consumption has estimated to decrease some 10 %. Preliminary water and wastewater flow projections for Cueni are summarised below in Table 5.5.5.
Cueni
Population connected to the Water Supply network Population connected to the Sewerage network Water pumped to the Distribution Non-Revenue Water Average total flow to WWTP 5.5.5.2 Needed Investments
Investment need estimations are done for the period of years 20072013 in order to secure sufficient operation of water supply and sanitation systems and to provide water supply and wastewater treatment for more inhabitants in Cueni. Short-term investments needed for water supply system are listed below, and serves as a basis for the proposed investment packages: - Drilling a new deep well to assure the necessary water demand; - Rehabilitation of network which is older than 30 years (> 36 km); - Continuing of installation of in-house water meters (at least 600 pieces) and 4 water-meter on main pipelines; - Construction of new chlorination plant; - Construction of new network including water meters for new consumers for new town districts (> 15 km); - Rehabilitation of pumping station;
rao1e 2005-01-17
SWECO INTERNATIONAL
Rehabilitation of underground water tanks; Procurement of leak detection equipment; Procurement of excavator, vacuum cleaner vehicle; and Implementation of automation and water flow metering for water intakes.
In general, both sewerage network and WWTP require urgent rehabilitation and reconstruction works to enable reliable operation of the network and to fulfil the treatment requirements set by Moldovan authorities. The investments needed for sewerage system are listed below, and serves as basis for the proposed investment packages: - Flushing of existing sewerage network; - Rehabilitation of 5.6 km of worn out network; - Enlargement of the network to cover at least 10,000 new inhabitants; - Rehabilitation of pumping stations; - Reorganising the existing septic tank emptying system including supply of proper vehicle for this purpose; - Renovation of district and WWTP inlet pumping stations; and - Reconstruction of new WWTP for capacity of 1,200 m3/day.
5.5.5.3
Preliminary cost estimations for proposed investments packages within water supply and sanitation services are only preliminary estimations and will only be used as help in preparation of suitable investment packages in Feasibility Phase of the project. Proposed investment packages have been prepared so that there are two different packages; 1st investment package for works which shall be carried out in the very near future (within 1-2 years) and 2nd investment package for other works which must be implemented in order to secure the water and sanitation operations in long term: 1st Investment Package: 1.5 million USD in total Renovation of existing water intakes and implementation of new chlorination equipment 0.1 million USD; and Construction of 15 km of new water supply network, 1.4 million USD.
rao1e 2005-01-17
2nd Investment Package, 10.5 million USD in total
SWECO INTERNATIONAL
Rehabilitation of 30 km of water supply network including renovation of pumping stations and purchasing leak detection equipment, 4.0 million USD; and Renovation and/or construction of 20 km of sewerage network including renovation of sewerage pumping stations and construction of new WWTP, 6.5 million USD.
rao1e 2005-01-17
SWECO INTERNATIONAL
6
6.1
Drochia
General
Drochia is located approximately 170 km northwest of the capital of the Republic of Moldova.
Figure 6.1.1: Location of Drochia

rao1e 2005-01-17
SWECO INTERNATIONAL
The official number of inhabitants is around 21000. According to the Mayor the real number should rather be around 23000, taken into account both considerable emigration to other countries and not registered immigration from the surrounding rural areas. The town has, as many other places, agriculture and food related industry. It has for instance the only sugar factory left in Moldova after the fall of the Soviet Union. A German company owns now this factory. There is also a railway. The economic situation has improved during the last years and is expected to continue to improve. It might anyway be difficult to raise the tariffs to afford a credit for investments for Apa-Canal. An alternative could be to sell land. The Mayor mentioned as planned investments in the town a heating station for nursery schools, repair of schools and sport halls and repair of roads. The town has also recently approved 27 lots for construction of buildings. Water services are delivered in three pressure zones. Zone A has water supply 24 hours per day, zone B and C 11 hours per day.
6.2
6.2.1
History The first water services in Drochia date back to the late 60ies. The water and wastewater services together with other municipal technical services were then state owned and operated under the local authorities. The water and wastewater services were changed to the present legal status in 1997. The Town Council is now involved in financing of Apa-Canals projects. Previously the state was involved in everything.
6.2.2
The Owner. How the Owner Governs Apa-Canal The Municipality is the owner of the Municipal Services Utility, and the company is from organizational point of view placed as on of the departments in the Town Administration under the Town Council.
rao1e 2005-01-17
SWECO INTERNATIONAL
Town Council
Town Administration
Apa-Canal
Trade Centre
Housing service
Figure 6.2.1: Simplified organization chart for the Town of Drochia.
The Mayor appoints the Director, who also reports to the Mayor. The present Director came from other business to the utility 1 years ago. 6.2.3 Legal Aspects Apa-Canal is a Communal Services Enterprise and has its own statutes but no separate service agreement with its owner describing for instance the level of service to the customers. Apa-Canal is the owner and operator of all the assets. The town has no local regulations in addition to the Moldavian state regulatory framework. 6.2.4 Organization and Management The director described the organization chart for the Municipal Enterprise Apa-Canal in Drochia as presented below. It is the same as when he came besides the Committee dealing with not official connection infringements. Seven persons are included in the Committee for dealing with not official connection infringements, mainly heads of sections. The committee meets twice per month. The Deputy Director is in charge of investments and credits. The utility has no formal management team. The Director has daily meetings with leading personnel. He reports monthly to this group about repairs carried out, collection, major cost items etc. There is a
rao1e 2005-01-17
SWECO INTERNATIONAL
sort of cost centres, and he reports monthly the results for these. There is no fixed agenda and no minutes of meetings.
Director Deputy Director
Chief engineer
Water
Wastewater
Commercial and Billing
Power engineers
Accounting
Human resources
Economist
Construction section
Laboratory
Meter readers
Committee for dealing with not official connections
Figure 6.2.2: Organization chart for the Municipal Enterprise Apa-Canal in Drochia
The utility has 2 computers. One is used for accounting and the other for commercial activities such as billing. The legal specialist is also using the accountants computer. The computers are connected to each other. The software for accounting is according to the Director developed by local IT specialists. The users of the computers have relevant training and know-how. The heads of departments have no own budget. The Director decides successively the use of money. The heads of departments and other personnel have no bonuses or other forms of incentives. They have obligations but no formal rights supporting their work. The Director has reflected on introducing some sort of bonus, but the financial situation has been too difficult to try this. The type of management seems thus to be strictly a top-down management with information upwards and orders downwards. Principals of accountable management or management by objective are not known. The Director expressed an interest in trying new organization and management models if proposed.
rao1e 2005-01-17
SWECO INTERNATIONAL
The utility carried in 2006 out investments for 1.7 million lei. During 2006 2007 there are projects for 3.31 million lei mainly financed by the Social Investment Fund but partly also by the Town Council. Director and his personnel are organizing and managing the projects. The utility has a development plan. 6.2.5 Staff. Efficiency and training needs Apa-Canal has now 74 employees. Of them15 are administrators, 13 working with commercial and billing activities, 20 in the water department and 26 in the wastewater department. The number of employees is rather stable. The number of households connected to the water supply is 10200 and to the wastewater services 7650. This should, according to the Director, be multiplied by a factor 1.7 to get the number of persons, thus approximately 17300 persons for water and 13000 persons for wastewater. The number of commercial and budget organizations is around 120. The efficiency based on number of persons connected to water is 234 consumers per employee. The efficiency based on number of customers is around 140 customers per employee. The number of connections is around 2000 to private houses and 60 to apartment buildings plus the approximate120 to commercial and budget organizations. The efficiency based on this figure is 29 connections per employee. The average age of the staff is around 50 years. There is presently no need to employ any specific type of personnel. The level of training and education is rather good. Generally there is a need for training in financial and technical subjects, but the Director could not specify any specific subjects. The company is generally interested in training but has not prepared any plan for training. Most training is carried out as on-the-job training. The average salary is around 1700 lei per month. This is according to the Director enough high for keeping important staff.
rao1e 2005-01-17
SWECO INTERNATIONAL
6.2.6
Estimation of Consumption. Billing and Collection Approximately 80% of all the population has meters, although the quality is not satisfying. 100% of the companies and budget organizations have meters. The customers own the meters. Consumption norms are used for customers without meters. ApaCanal has 7 meter readers for households and 3 for companies and budget organizations. The latter are also working with the households. The meter readers distribute the bills monthly when reading the meters. The customers may pay at Apa-Canal, in banks and to the meter readers. The collection rate has improved and has during the two last years the following: Year Category Population Other customers Water 96% 90% 2005 Wastewater 95% 89% Water 98% 97% 2006 Wastewater 96% 97%
In case a customer does not pay, Apa-Canal is using all methods available - notification, suing to court and cutting of the supply, although they are not always successful. 6.2.7 Relations to customers and other stakeholders The utility gives information to its customers in media, especially in the local TV and radio. People are also coming if they have any problems. The meter readers give also information. Visits from school classes or other groups do not exist. 6.2.8 Consultants Comments The utility seems to have had rather small improvements from institutional and management point of view during the last years.
rao1e 2005-01-17
The rate of meters for population, 80%, can be improved. The collection rate, 96-98%, is high and improving.
SWECO INTERNATIONAL
The staff efficiency is 140 customers per employee and 29 connections per employee, which is slightly better than the average company visited. The organization chart shows that the technical personnel are subordinated both to the chief engineer and directly to the director, which is uncommon. The special committee dealing with unofficial connections is a good solution considering the present situation. The utility has experience from managing investments, which also is an advantage. The level of education seems to be acceptable although there are needs for some improvements. The level of salary is good enough to keep qualified personnel. The utility must be more computerized. Further comments, see section 15.
6.3
6.3.1
Social environment in Drochia
6.3.1.1
Population
Number of population for Drochia as at 1st of January 2007 is the following:


(Thou.) 20.7 20.7 21
rao1e 2005-01-17
SWECO INTERNATIONAL
6.3.1.2
Education system of the town consists in 5 kinder gardens, 2 medium schools with 820 pupils, 3 high schools with 2,386 pupils and a polyvalent school. Regarding the health system, it consists of Raion hospital with 380 beds, centre of family doctors and 16 pharmacies. 133 medics and 302 assistants are working in this sector.
6.3.1.3

Drochia 2004 2005 1,103.1 1,318.7 930.7 1,180.6 491.4 325.3 414.6 274.5 568.6 383.4 509.1 343.2
Estimation of Household Revenues Average nominal monthly salary - National level Average nominal monthly salary - Drochia County Disposable household income (national average per household member) Average monthly pension (national level) Average household disposable income in the county (per member) Average monthly pension at county level Number of persons in household Average household (no of persons) Pensioner household (no of persons) Average household disposable income in the county (per household) Average monthly pensioner household revenues at county level (per household) Lei Lei Lei Lei Lei Lei
No. No. Lei Lei
3.0 1.8 1,243.8 494.0
3.0 1.8 1,527.2 617.8
6.3.2
Economic environment in Drochia
6.3.2.1
Natural resources
rao1e 2005-01-17
Total surface of the Drochia town is 1830 ha, out of which agricultural fields represent 439.4 ha. The total surface of intra town fields is 864 ha, forests represent 83 ha. The town has also a lake with a total surface of 30 ha.
SWECO INTERNATIONAL
6.3.2.2
Economy
In Drochia town are registered 1,884 economic agents, most of them are authorized individuals.
6.3.2.3
Industry
Town economy is based on 20 large economic agents. Todays industry is represented by modern enterprises, which are processing almost all types of agricultural products: tobacco, corn, seed, milk, meat.
Volume of industrial production in Drochia Raion, compared to the total industrial production in Republic of Moldova, is presented in the following table:
Table 6.3.3: Volume of Industrial Production Evolution Drochia Raion
Volume of industrial production in 2006 Total out of which Drochia
Total production on Republic of Moldova increased with 26% during the period 2004-2006. For Drochia Raion, the production increased considerably with 32%, demonstrating an improvement of the local industry environment.
6.3.2.4
Financial situation of Commercial Companies in Drochia Raion, compared to the total financial situation of Republic of Moldova, is presented in the following table:
rao1e 2005-01-17
SWECO INTERNATIONAL
Jan.-Sept. 2004 Total Drochia

29423 11289 13906 572786 2790 53031 19140 61291 253 98 126 13944 -22.5 1092.2 199.3 1843.0

31870 12380 14893 570143 3424 66870 22717 68420 267 125 122 13330 69.0 1423.1 273.4 771.4

34700 13155 16532 56969 8 3689 79052 26867 81804 302 127 147 12149 180.6 1962.5 353.3 799.4
As can be observed from the table above, the number of profitable enterprises increased at national level, but the percentage of profitable enterprises in total reporting enterprises remained approximately the same (46%). In Drochia Raion, number of reporting enterprises increased with 19%, and the percentage of profitable enterprises increased from 38% in 2004 to 42% in 2006. Average number of employees at national level kept a stable trend. In Drochia Raion, during the analyzed period, the average number of employees registered a decrease of 13%. Financial result before tax recorded a negative value in 2005 of -22.5 mil lei. For 2005 and 2006, financial result increased considerably, reaching a value of 69 mil lei in 2005 and almost a triple value in 2006 -180.6 mil lei. Sales revenues increased in almost doubled in the period under review, increasing with 179%. Receivables related to commercial invoices and budget compensation increased with 77% in 2006, compared to 2004. During the analyzed period, debts recorded a significantly decline of 56% in 2006, compared to 2004.
rao1e 2005-01-17
SWECO INTERNATIONAL
6.4
6.4.1
Financial Aspects
6.4.2
6.4.2.1
Table 6.4.1: Operating result evolution - Drochia
Operating result for the year Amounts in Thou. USD Operating revenues Sales Revenues from services Other revenues Operating costs Material expenses Third parties services Personnel expenses Salaries Social insurance taxes Other costs for water and sewerage Depreciation Energy cost Costs related to other activities Operating result
Source: Water Utility from Drochia
2004 136.4 119.8 16.6 188.6 13.2 4.4 79.9 61.5 18.5 18.9 21.6 50.7 (52.2)
2005 222.7 141.8 33.6 47.3 201.0 14.9 3.9 84.7 65.6 19.0 11.5 21.8 64.2 21.7
2006 252.1 216.3 26.2 9.6 275.3 23.3 6.6 139.9 109.3 30.6 20.7 22.5 62.4 (23.2)
In 2006, approximately 52% of the operating revenues result from water supply and 34% from wastewater operations. The total operating result was negative for 2004 and 2006. Positive value is recorded in 2005, even of the tariffs for institutions were reduced.
rao1e 2005-01-17
SWECO INTERNATIONAL
The evolution of the structure of operating revenues is presented in the following chart:
Figure 6.4.1: Structure of Sales Drochia
Structure of Sales
140.0 120.0 100.0 80.0 60.0 40.0 20.0 2004 2005 2006
Thousand USD/y
W ater W astewater
Source: Water Utility from Drochia Revenues for water increased in the period analysis, with a rate of growth larger than the one registered by wastewater revenues. The evolution of the water losses is presented in the table below:
Table 6.4.2: The Evolution of Non Revenue water 2004-2006 - Drochia
2004 Th. m3 600.9 112.9 -81%
2005 Th. m3 659.9 125.7 -81%
% 10% 11%
2006 Th. m3 681.4 153.8 -77%
% 3% 22%
The level of non-revenues water is important and the utility will try to decrease the losses in the following years. One of the main purposes of the investment promoted with financial resources from The World Bank loan is to decrease the water losses. The evolution of invoiced quantities is presented in the following table:
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 6.4.3: The Evolution of Invoiced quantity 2004-2006 - Drochia
2004 Th. m3 112.9 94.6 18.3 105.8 66.3 39.5
2005 Th. m3 125.7 102.7 23.0 109.9 70.8 39.1
2006 % Th. m3 11.3% 153.8 8.6% 128.3 25.7% 25.5 3.9% 6.8% -1.0% 137.2 90.9 46.3 % 22.4% 24.9% 10.9% 24.8% 28.4% 18.4%
The water consumption increased quite significantly in the last years mainly as result of both increase of water delivered to inhabitants and institutions. The weight of water delivered to companies and institutions is low (represents only 16% in total invoiced water). Because the level of tariff for companies and institutions is significantly higher than for domestic customers, these entities have the tendency to find water from other sources (have their own sources) and to pay only sewerage services to the utility. Company receives amounts from the local budgets, and uses them to cover losses produced by inadequate tariff adjustments. Amounts are registered as revenues from financial activity. The company is submitting a request to the town hall and then negotiates the amounts that will be received (usually, the received amounts are smaller than the requested ones). The evolution of the structure of total operating costs is presented in the following chart:
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 6.4.2: The Structure of Operating Costs - Drochia

18.4%
22.6%
E nergy
8.2%
O ther costs
50.8%
The most important cost elements are personnel costs (wages, salaries and related taxes), which represents 50.8% of operating expenditures in 2006 and energy costs, which represents about 22.5% of operating expenditure in 2006, followed by other costs (18.4%) The weight of energy costs increased in 2005 and then decreased in 2006 to the value mentioned before. The salaries have increased in nominal terms every year. The increase of salaries has to be performed based on premises stipulated in the law regarding evolution of salaries in the public sector. This element is more or less not under the control of the water utility. Due to lack of financial resources the last mandatory salary increases was not yet implemented. The evolution of operating costs is presented in the following chart:
Figure 6.4.3: Evolution of operating costs - Drochia
Evolution of operating costs

160.0 140.0 Thousand USD/ye 120.0 100.0 80.0 60.0 40.0 20.0 E nergy P ersonnel (salaries and related taxes) O ther costs 2004 2005 2006
rao1e 2005-01-17
SWECO INTERNATIONAL
Personnel costs recorded the most important evolution in the period under analysis, for almost 65% in 2006, compared to 2005.
6.4.2.2
Table 6.4.4: The Level of Account Receivables as at December 31, 2006 - Drochia
31.12.2006 USD % 28,269 45.6% 25,195 40.6% 8,541 13.8% 62,006 100.0%
The account receivables from commercial customers consist of the following main debtor: TERMOCOM (former district heating company): 330 thousand MDL; The management of the company needs to have among its priorities the increasing of the collection level. In the last years the water utility succeeded to maintain its collection ratio to high levels. In the current conditions, it is important to maintain the level of the outstanding debt at low levels to be able to generate sufficient cash to pay the current obligations. This is essential for a sound development. The level of short-term liabilities has decreased in the last years, but the total level is relatively high. A breakdown of the short-term liabilities is presented in the following table:
Table 6.4.5: Evolution of short-term liabilities (amounts in Thousand USD) - Drochia
rao1e 2005-01-17
2004 237.9 25.4 21.9 74.6 81.8 34.2
2005 180.0 34.7 10.1 84.8 38.7 11.7
2006 157.1 18.7 14.5 72.2 36.2 15.4
SWECO INTERNATIONAL
The aging of the liabilities to the social fund is presented in the following table:
Table 6.4.6: Aging of liabilities to social fund - Drochia
31.12.2006 USD % 12,274 17.0% 24,609 34.1% 35,358 48.9% 72,242 100.0%
Table 6.4.7: Aging of liabilities to state and local budgets - Drochia
31.12.2006 USD USD 13,267 36.6% 11,735 32.4% 11,201 30.9% 36,203 100.0%
Company has outstanding debts toward Borni Service of 61,000 MDL and 34,000 MDL to Holda Argintie. The current situation of the fixed assets is rather poor. The utility did not have resources in the last years for major repairs and investments. The need for performing the investment is high. If no major investments will be performed in the following years, the operating cost will increases and will affect the capability of the utility to deliver water to the town.
6.4.2.3
Tariff analysis
Historically, tariff levels have been effectively imposes by the Ministry of Communal Services and Territorial Development. Because of the institutional restructuring and decentralization, the utility may increase the tariffs without the approval of the central authorities but with the approval of the local authorities (municipality) and ANRE. The domestic tariff level is calculated based on the total cost per cubic meter plus a profit allowance (between 5-10%). Changes would be applied following significant increases in costs, mainly electricity.
rao1e 2005-01-17
SWECO INTERNATIONAL
The evolution of invoiced quantity, the increase of prices for energy and the increase of salaries should have been the main factors affecting the evolution of tariffs. The tariff evolution of the water tariffs for the last years is presented in the following chart:
Figure 6.4.4: Water Tariff Evolution - Drochia
4.00 3.50 3.00 3.73 3.73 3.04 3.04
2.92
2.92 D estic om custom ers Instutions
USD/m
2.50 2.00 1.50 1.00 0.50 2004 2005 2006 0.61 0.60 0.57
For domestic customers, the tariff remained the same over the period under analysis. Tariffs for institutions and commercial companies were decreased in 2005 by the Local Council mainly due to lack of resources, and kept the same in 2006. Evolution presented in the chart is the result of exchange rate between MDL and USD. Tariff for institutions and commercial companies are very high, compared to the tariff for customers, therefore a cross-subsidization is used in Drochia. The tariff evolution for wastewater in the last years is presented in the following chart:
Figure 6.4.5: Sewerage Tariff Evolution - Drochia
2.50
2.00
1.95
1.95 1.59 1.59 D estic om custom ers
1.52
1.52
USD/m
1.50 P ublic Institutions
1.00
0.50
0.28
0.28
0.27
2004 2005 2006

rao1e 2005-01-17
SWECO INTERNATIONAL
For domestic customers, the tariff remained the same over the period under analysis. Tariffs for institutions and commercial companies were decreased in 2005 by the Local Council mainly due to lack of resources, and kept the same in 2006. Evolution presented in the chart is the result of exchange rate between MDL and USD. Tariffs for institutions and commercial companies are very high, compared to the tariff for customers. For the future the utility should consider the possibility and to take all the necessary actions to adjust the tariff more often to avoid the negative effects of the cost increases due to the inflation. In the future the water utility will have to cover also the possible debt service related to the loan from the World Bank. Briefly, the methodology for approving tariffs consists of the following steps: The utility specialists are preparing a study for tariff adjustment The study is sent to the Local Council and ANRE for approval.
6.4.2.4
Financial management is still far from the requirements of a modern utility. A lack of skills and human resources leads to limitations in the activities performed by the Finance Department.
rao1e 2005-01-17
SWECO INTERNATIONAL
The accounting department consists of 3 persons: 1 cashier accountant, 1 materials accountant, 1 salary accountant, 1 economist, 1 chief accountant and 1 computer plus another from Town hall. Population is kept on the computer. Book keeping is manually made. The financial management is limited to good management of payments, and is unable to give effective support to the overall management decision-making process, particularly the good management of the growth potential. Without minimizing the technical and implementation problems that the utility has to face in the near future, the financial planning area is most in need of enhancement and restructuring efforts. We recommend the introduction of cost accounting by creating cost centres for the main activities (water and sewerage). There is important to find out the performances of each sector. We recommend the extensive use of computer for financial management. Accounting, billing and collection, financial forecast are just a few items, which can be performed more efficient by using a computer. The process of financial planning does not include all the parties that should be involved with financial planning matters and has not the necessary prediction-correction role. The management team of the utility has to prepare a long-term strategy to assure the sustainable development. This analysis can be used as a starting point in preparing this strategy. Without a clear strategy for sustainable development of the activity, the utility continue to survive but with very limited potential and lower and lower performance. 6.4.3 Financial Selection Criteria By applying the criteria mentioned under section 2.4.3, the scores obtained by the water Operator from Drochia are presented in the following table:
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 6.4.8: Scores for the Water Utility from Drochia
The results are analyzed in the final conclusions chapter when the decision regarding the introduction of Drochia in the 10 list towns is analyzed.
rao1e 2005-01-17
SWECO INTERNATIONAL
6.5
6.5.1
Technical Aspects
6.5.2
Water supply and sewerage in Drochia Water intake consists of seven (7) deep wells, out of which only three (3) is in use. Two (2) of used three (3) wells are recently renovated while five (5) wells are waiting for renovation. All seven wells are located at same water intake area. Normally only well No 3 is enough to be used for whole water production (some 1,500 m3/day). From used wells water is pumped first to two (2) separate underground water reservoirs which are located at water intake area. From reservoirs water is pumped (by pumping station PS 1) through 3.2 kilometres long pressure pipeline to four (4) separate underground water reservoirs located in the town centre within the main water distribution pumping station (pumping station PS 2). Water supply network is divided into three different pressure zones. Zone 1 is the gravity pressure zone and water is supplied to this network directly from the underground reservoirs. The highest pressure in Zone 1 is 20 meter. Zones 2 and 3 are pressure zones which are served directly to the network by three (3) recently renovated centrifugal pumps placed at main water supply pumping station located by underground reservoirs have pressure 40 meter (Zone 2) and 20 meter (Zone 3).
rao1e 2005-01-17
SWECO INTERNATIONAL
Water supply network have a total length of approximately 75 km. Only some 10,000 (50 %) inhabitants are currently connected to the water supply network while more than 10,000 inhabitants are dependable on private wells. The only water treatment method used is chlorination to underground water tanks by the pumping station PS 2. However, the chlorination is done manually by pouring chlorine solution directly to the reservoir only when needed (when the quality of water does not correspond to set norms). The total length of main sewerage network is approximately 45 km. Sewerage network has two (2) district pumping stations (SPS 1 and SPS 2) out of which one (1) (SPS 2) is recently renovated. In addition to that there is an inlet pumping station for the WWTP, which is located on some 30 meter higher level than the town centre some 3.0 km south from the town centre. The pressure pipeline from main district pumping station (SPS 2) to the WWTP has length of 3.0 km. Only some 10,000 inhabitants out of 21,000 are connected to sewerage network while the rest are using septic tank systems or dry lavatories. However, the number of septic tank users is not known. The wastewater treatment plant was taken into operation in 70s representing complete biological treatment process. In general, the wastewater treatment plant is in a very poor condition and proper operation of the plant is basically impossible. At present the wastewater flow to the treatment plant is only some 400 m3/day while the design capacity of the plant is 3,500 m3/day. In the following sections the water and wastewater balances and the technical status of water supply and sanitation facilities as well needed investments on preliminary level have been described in detail. 6.5.3 Water Supply System
6.5.3.1
Present System
rao1e 2005-01-17
Water intake consists of seven (7) deep wells, out of which only one (1) is in use and five (5) are waiting for renovation. All seven wells are located at same water intake area. Every operated deep well has a submersible Moldavian made pump, type ECV with design capacities of 25 and 63 m3/h. Water storage consists of two (2) separate
SWECO INTERNATIONAL
underground water reservoirs which are located at water intake area and four (4) separate underground water reservoirs located in the town centre within the main water distribution pumping station (pumping station PS 2). The total capacity of water intake (three wells in operation, 600-1,500 m3/day each) is 3,500 m3/day. Approximately 10,000 inhabitants out of 21,000 are currently connected to the water supply network. Water supply network have a total length of approximately 70 km. Only some 10,000 (50 %) inhabitants are currently connected to the water supply network while more than 10,000 inhabitants are dependable on private wells. In addition to that there are 104 business utilities connected to water supply network. From used wells water is pumped first to two (2) separate underground water reservoirs and further by pumping station PS 1 through 3.2 kilometres long pressure pipeline to four (4) separate underground water reservoirs located in the town centre within the main water distribution pumping station (pumping station PS 2). Water pumping station PS 1 is equipped with three centrifugal pumps out of which two are not in operational condition while only one could be operated. The used pump (type: D-200/95) is 30 years old and end of its operational lifetime. From PS 2 water is pumped to water supply network which is divided into three different pressure zones. Zone 1 is the gravity pressure zone and water is supplied to this network directly from the underground reservoirs. The highest pressure in Zone 1 is 20 meter. Water is pumped form PS 2 directly to zones 2 and 3 with three (3) recently renovated centrifugal pumps. The highest pressure in Zone 2 is 40 meter and in Zone 3 20 meter. In addition to that there are also several private deep wells, which are property of groups of private households. The only treatment process used is chlorination to underground water tanks within PS 2. However, the chlorination is done manually by pouring chlorine solution directly to the water reservoir only when needed (when the quality of water does not correspond to set norms). At present, the quality of water from deep wells corresponds to Moldavian Normative on Potable Water (see Table 6.5.1). According to Apa-Canal the chlorination is not needed if water is supplied 24 hours per day.
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 6.5.1: Analysed water quality. Data is provided by town of Drochia.
Parameter Colour Turbidity Odour pH Dry residuals Nitrites Chlorides Sulphates Ammonia
Unit grade mg/l grade mg/l mg/l mg/l mg/l mg/l
Requirement 20 1.5 2 9 1,000 45 350 500 2.0
Actual 5.1 0.46 No smell 7.7 850 6.2 90 180 0.6
Used underground water tanks within PS 1 (2 units) have capacities of 2 x 1,000 m3 (2,000 m3 in total) and reservoirs within PS 2 have capacities of 2x 300 m3, 2,000 m3 and 1,000 m3 (3,600 m3 in total). Water distribution network consists of asbestos, steel, cast iron and PVC pipes. The range of diameters is from DN 50 to DN 160. The total length of network is 75 km out of which 6.7 kilometre is renovated in 2006 and 7.0 kilometre is about to be renovated in 2007 (by May some three (3) kilometre already renovated). Different lengths of used pipeline materials and age of the network have been presented in Table 6.5.2.
Table 6.5.2: Water Supply Network in town of Drochia.
Material Steel Polyethylene Asbestos Cast iron PVC Total
DN 50-100 100-150 100 150 110-160 110-160
< 10 years, km 9
30-40 years, km
40-50 years, km 8.5
> 50 years, km 12 22
10 9 14 14 18.5 34
Total km 8.5 9 12 22 10 14 75
6.5.3.2
rao1e 2005-01-17
In General, centrifugal pumps and other mechanical equipment within water intake and PS 1 are in a very poor condition. Most of the mechanical parts are worn out and old pumps are working at a decreased efficiency rate. Basically only one deep well is in operation. Water meters are not connected to control system and operation is not monitored.
SWECO INTERNATIONAL
Dilution and dozing of chlorination chemical is carried out manually. Water reservoirs have not been renovated for 50 years. During the past 2 years the water distribution network has partially been renovated and some 9 kilometres of old asbestos and cast iron pipelines have been replaced with new polyethylene pipelines. However, most of the network is still made of asbestos and cast iron being older than 40 years. Drochia Apa-Canal has reported several problems with old pipelines. Problems includes the rate for reported bursts some 5 to 6 per day An-accounted water losses in 2006 constituted 540,000 m3 (78% from the water volume pumped to the distribution), including (reported by Apa-Canal of Drochia): Leaks, 200,000 m3/year (37 %); False metering readings, 27,000 m3/year (5 %); Illegal connections, 38,000 m3/year (7 %); Other non-revenue water, 270,000 m3/ year (50 %)
The main cause of water losses are often bursts in water network due to wear of very old pipelines. In addition to that valves are worn out and dont assure necessary grade of closure. The poorest condition of network has been reported to be the network of old sugar factory in pressure zone 2, whish is mainly from the year of 1956 and has newer renovated. During years 2006 and 2007 Apa-Canal has renovated 13.7 km (by end of 2007) of main water supply pipelines including connections to most of the multi-storey buildings and administrative buildings in the town centre. However, still some 60 km of network should be renovated within the near future. Apa-Canal self has estimated that the most urgent renovation need is for 41 km of network and in especially in pressure Zone 2, where the need is for some 28 km of existing network including customer connections. Together with renovation of the existing deep wells, PS 1, water reservoirs and the existing water supply network (starting from the network of old sugar factory in Zone 2 the main focus shall be paid in extension of network in order to provide water supply for more inhabitants. In addition to above mentioned the existing pressure pipeline from PS 1 to PS 2 (3.2 km) shall be replaced.
rao1e 2005-01-17
SWECO INTERNATIONAL
According to Apa-Canal, in order to connect all inhabitants of the town of Drochia to the water supply network, it requires extensions of pressure zones 1 and 3. Zone 1, which is supplied by gravity, should be extended to cover the housing areas on the other side of the railway by installing approximately some 20-30 km of new network (including customer connections). Zone 3 should be extended to the northern part of the town by installing approximately some 10-20 km of new network (including customer connections).
6.5.3.3
The deep well No. 3 with a capacity of 63 m3/h operates permanently. Wells No. 1 and 2 with a capacity of 25 m3/h each, operates if needed. All wells pump water to intake reservoirs of PS1, which is used to pump water to the intake reservoirs of pumping station PS2. From PS2 water is supplied to three different pressure zones. Zone 1 is supplied by gravity 24 hours per day. Zones 2 and 3 are supplied by PS2 directly to the network on average 11 hours per day. The only water treatment process used is chlorination to underground water reservoirs within PS2. However, the chlorination is done manually by pouring chlorine solution directly to the water tank if needed. Pumped water flows are not metered and operation is not monitored automatically. According to the analysis from past years the quality of supplied water is good and corresponds to set Moldavian norms for drinking water. Currently, all the water which is pumped to the distribution (1,500 m3/day on average) is taken from deep well No 3. However, if the amount of non-revenue water (78 %) could not be degreased some more wells must be taken into operation when the network is extended to cover all inhabitants in the town of Drochia. This would mean renovation of one (1) to two (2) of existing deep wells. In addition to above mentioned, there are plans to connect town of Drochia to Soroca-Bli water pipeline. This 42 kilometres long pipeline would connect Drochia to the water pipeline from town of Soroca. The investment is planned to be financed by the Government of Moldova. However, during the time of this study any financing decisions were not made.
rao1e 2005-01-17
Beginning of year 2007 there were some 8,000 inhabitants living in houses with household-meters installed. According to Apa-Canal all
SWECO INTERNATIONAL
business utilities in Drochia were having flow meters installed. The level of population within metering covers 40%. Level of metering for institutions and business entities is 100%. All private apartment meters are size of DN 15 while size of meters installed at institutions and organizations vary from DN 15 to DN 50 depending on connection diameter. The energy efficiency for water supply pumping stations was calculated Based on available data presented by Drochia Apa-Canal and given pump design parameters. The average used energy consumption for water intake was 0.83 kWh/m3 and the average used energy consumption for district pumping stations was 0.46 kWh/m3. Total energy consumption of water supply operations in 2006 was 990,000 KWh. 6.5.4 Sewerage System
6.5.4.1
Present System
The main sewerage network is 52 years old having length of 45.4 km and made of asbestos, cast iron and concrete. Network consist two (2) district pumping stations out of which one (1) is renovated and one in a need of full renovation and/or replacement. In addition to these two pumping stations there is also the inlet pumping station for the WWTP located at treatment plant site some 3 kilometre south from the town centre. Only some 7,650 inhabitants out of 21,000 are currently connected to sewerage network. WWTP, constructed in 70s, has a design capacity of 3,500 m3/day and consists the following treatment units: rao1e 2005-01-17
Horizontal grit chamber; Primary sedimentation tanks; Biological filtration (filtrate material gravel); Secondary sedimentation; Sludge handling in drying beds and stabilization bonds; Biological ponds for effluent wastewater; Sludge pumping stations; Chlorination plant; and Unfinished blower building.
The current flow (year 2006) to the treatment plant has been some 400 m3/day meaning that the plant is operated with only some 10 %
SWECO INTERNATIONAL
of the design capacity. At present grit removal, primary clarification and biological filtration are in operation. Still, due a rather poor condition of process units and very long retention times the proper treatment is very difficult. Treated wastewater led to biological pond before discharging into the recipient. Retention time in the pond is very long and due evaporation the amount of discharged wastewater is considerably small.
6.5.4.2
The main sewerage network is from the year of 1955 and has not been renovated during past 52 years. The main material used is asbestos but also cast iron and concrete pipelines are used. The existing sewerage network (excluding one (1) renovated pumping station) could be considered to be in very poor good condition. However, within this study any conditional analysis has not been carried out and it could only be estimated that at least proper flushing of pipelines, emptying of manholes and replacement of poorest condition sections (some 12 kilometres) of the network will be needed. Still, the sewerage network covers only some 30 % of inhabitants and some 13,000 inhabitants are currently not connected to the sewerage system. In order to provide proper sanitation services for all inhabitants in the town of Drochia the first priority regarding investments in sewerage system would be enlargement of the network to cover as many water consumers as possible. This would mean some 30-40 kilometres of new sewerage network and at least 1-2 new district sewerage pumping stations. In General, the existing district sewerage pumping station which is not renovated (SPS 2) must be totally replaced. All of the mechanical parts are worn out and not in use. Also the pumping station building (SPS 2) is in a very poor condition. For new sewerage pumping station there is a possibility to use area reservation on the existing pumping station site. The renovated district sewerage pumping station, which delivers wastewater from the town centre to the WWTP (SPS 1), is in a considerably good condition. However, it should be equipped with proper flow metering. Existing Wastewater Treatment Plant is at the end of its operational lifetime. Taken into consideration the condition of existing structures and machineries and insufficient process technology it could be
rao1e 2005-01-17
SWECO INTERNATIONAL
recommended that the whole treatment plant will be replaced with new modern and more compact WWTP taken into account current and future wastewater flows and loads. For new WWTP there is a possibility to use area reservation on the existing plant site. However, the existing WWTP is located on rather high level and wastewater is currently pumped to the treatment plant from the town centre some 30 meters lower level. During the next project phases it would be feasible to find a new location for WWTP from lower ground level so that most of the produced wastewater could be led to the treatment plant by gravity. This would bring considerable savings in pumping costs of raw wastewater from the town districts. It shall be noted that within this study only visible conditional analysis were carried out and proper analysis of existing structures would be needed during the next project phases.
6.5.4.3
Sewerage pumping station SPS 1 which delivers wastewater to the WWTP has capacity of 50 m3/h operates depending on the quantity of the incoming wastewater, average being 8 hours per day. District pumping station SPS 2 is not in operation. The inlet pumping station to the WWTP with capacity of 80 m3/h operates approximately 5 hours per day. The wastewater volume received at WWTP in 2006 was 154,000 m3 (400 m3/day, only 10 % of the design capacity). At present grit removal, primary clarification and biological filtration are in operation. Still, due a rather poor condition of process units and very long retention times the proper treatment is very difficult. Treated wastewater is led to biological pond before discharging into the recipient. Retention time in the pond is very long and due evaporation the amount of discharged wastewater is considerably small. Only used mechanical equipment at WWTP are pumps for inlet pumping of wastewater and pumps used for pumping sludge from primary clarification to sludge stabilization bonds. The effluent quality in 2006 according to the information received from the town of Drochia has been presented in the Table 6.5.3.
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 6.5.3: The effluent quality at Drochia WWTP in 2006.
Parameter SS BOD5 Ammonia
Unit mg/l mg/l mg/l
Inlet After concentration treatment N/A 11 N/A 9.0 N/A 8.8
Requirement 5 3.0 0.5
Thus the very low influent flow and considerably poor condition of used process units and insufficient process control the proper treatment of wastewater is not possible. The wastewater quality does not meet the requirements set by Moldavian authorities (still, only BOD, ammonia and suspended solids are measured). However, taken into consideration the used treatment methods the treatment result is reasonable good and reported SS effluent concentration being only 9 mg/l and BOD5 concentration being only 11 mg/l. Test result indicates that the used methods for taking samples from the effluent wastewater and used laboratory analysis are most probably insufficient and real effluent concentrations could be on higher level than reported. The energy efficiency for sewerage pumping stations was not calculated thus pumped wastewater amounts were not known. In 2006 the energy consumption within sewerage pumping stations was 31,000 kWh while total energy consumption of sewerage system was 95,500 KWh. 6.5.5 Prioritising of needed Investments for years 20092013
6.5.5.1
In order to prepare preliminary water demand and wastewater projections the water and wastewater flows were analysed for the last three (3) years (20042006). Preliminary water demand and wastewater projections for the year 2013 are based on general assumptions as follows: - The connection rate to the water supply network is 80 %; - Per capita consumption in Drochia in 2013 is litres/capita/day; - The connection rate to the sewerage system is 70 %; and
150
rao1e 2005-01-17
SWECO INTERNATIONAL
- Wastewater flow will be significantly bigger due the connection of more inhabitants and industry utilities in the sewerage network. In addition to above mentioned, some assumption related to rehabilitation of the water supply network were made as follows: - Due repairing and maintenance work and installation of new pipelines for new housing areas the amount of leakages from the water supply network have estimated to decrease some 40 %; - Due installation of new in-house flow meters and due better accounting system amount of unaccounted water is estimated to decrease some 30 % (billed water demand per capita will increase); and - Due better in-house flow measurement and possible increase in water tariffs per capita consumption has estimated to decrease some 20 %. Preliminary water and wastewater flow projections for Drochia are summarised below in Table 6.5.4.
Drochia Population connected to the Water Supply network Population connected to the Sewerage network Water pumped to the Distribution Non-Revenue Water Average total flow to WWTP
6.5.5.2
Needed Investments
rao1e 2005-01-17
Investment need estimations are done for the period of years 20072013 in order to secure sufficient operation of water supply and sanitation systems and to provide water supply and wastewater treatment for more inhabitants in Drochia. The new water sources
SWECO INTERNATIONAL
and/or pipeline to connect city of Drochia by new water pipeline to pipeline between city of Soroca and city of Balti have not been taken into consideration as short term investment needs. Thus the project to implement the water pipeline from city of Drochia to Soroca-Balti pipeline is under preparation and discussions on governmental level it is difficult to estimate needs for new investments related to water intake in city of Drochia. At this moment it is not known if this pipeline will be constructed until year 2013. Still, it would be feasible to wait until this issue is solved between the government authorities and city of Drochia. It shall be noted that the water quality within current water intake in Drochia is considerably good and meets quality requirements set by Moldavian government. However, at the moment the city of Drochia has only one water intake area in use and as a long-term investment need it could be considered to be feasible to find one more water source (new water intake or connection to Soroca-Balti pipeline) to secure the water supply if the quality of water deteriorates or amount of water within current water intake runs out. Due above mentioned reasons the investments on new water treatment plant and/or construction a totally new water intake for city of Drochia have not considered to be feasible as proposed short-term investments. Short-term investments needed for water supply system are listed below, and serves as a basis for the proposed investment packages: - Rehabilitation of PS 1 to secure 24 hours water supply; - Rehabilitation of two (2) of existing deep wells to secure amount of water for supply; - Rehabilitation of existing water reservoirs to secure the quality of supplied water; - Implementation of new chlorination plant within PS 2 to secure the quality of water delivered to the network from reservoirs within pumping station PS 2; - Rehabilitation of network within old sugar factory district (some 28 km); - Rehabilitation of other mains (some 13 km); - Continuing of installation of new in-house water meters; - Construction of new network including water meters for new consumers for at least 7,000 inhabitants (> 25 km); and - Implementation of automation and water flow metering for water intake and for PS 2.
rao1e 2005-01-17
SWECO INTERNATIONAL
In general, both sewerage network and WWTP require urgent rehabilitation and reconstruction works to enable reliable operation of sanitation operations and to fulfil the treatment requirements set for wastewater effluent quality by Moldovan authorities. The investments needed for sewerage system are listed below, and serves as basis for the proposed investment packages: - Flushing of existing sewerage network and emptying of manholes; - Renovation of district SPS 2; - Enlargement of the network (including 1-2 new sewerage pumping stations) to cover at least 4,000 new inhabitants; - Reorganising the existing septic tank emptying system including supply of one new vehicle for this purpose; - Reorganising the maintenance of sewerage network including supply of one new vehicle for flushing and cleaning of network; and - Reconstruction of new WWTP for capacity of 1,700 m3/day.
6.5.5.3
Preliminary cost estimations for proposed investments packages within water supply and sanitation services are only preliminary estimations and will only be used as help in preparation of suitable investment packages in Feasibility Phase of the project. Proposed investment packages have been prepared so that there are two different packages; 1st investment package for works which shall be carried out in the very near future (within 1-2 years) and 2nd investment package for other works which must be implemented in order to secure the water and sanitation operations in long term: 1st Investment Package: 1.2 million USD in total - Renovation of existing water intake and intake pumping station PS1 including new chlorination equipment, 0.2 million USD; and - Rehabilitation of existing water reservoirs and construction of 10 km of new water supply network, 1.0 million USD 2nd Investment Package, 13 million USD in total - Rehabilitation and extension of water supply network (45 km in total), 5.0 million USD; and
rao1e 2005-01-17
SWECO INTERNATIONAL
- Renovation and/or construction of 40 km in total of sewerage network including renovation of sewerage pumping station SPS2 and construction of new WWTP, 8.0 million USD.
rao1e 2005-01-17
SWECO INTERNATIONAL
7
7.1
Fleti
General
Fleti is located in the north-west part of Moldova, at some 130 km far from Chiinu.
Figure 7.1.1: Location of Fleti
rao1e 2005-01-17
SWECO INTERNATIONAL
The official number of inhabitants according to the National Institute for Statistics is 181001. The real number is according to the Mayor approximately the same, despite considerable emigration to other countries and including many students living in the town and not registered immigration to Fleti from the surrounding rural areas. The figure for the real number of inhabitants is according to the Mayor based on information collected from family doctors and on passport registrations. A great number of persons from surrounding villages are also living in the town during the weeks but going home over the weekends. After the collapses of the Soviet Union also the economy and municipal services of Fleti collapsed, and during the worst years water was distributed only twice per week. In 2004 water was supplied only 2 hours on Tuesday and 2 hours on Thursday. Now the economy of the town is improving and water is supplied 20 hours per day.
7.2
7.2.1
History The first water services in Fleti date back to year 1959. The water and wastewater services together with other municipal technical services were then state owned and operated under the local authorities. In 1997 the services were divided into two utilities but still owned by the state. In 2001 the state transferred the utility to the municipality. In 2004 the water and wastewater company and the company for other technical services, such as street cleaning and solid waste management, were combined again into the present Communal Services Utility Fleti. Now the utility has also other business such as hotel, construction, cultivation of fish in an artificial lake and cultivation of mushrooms.
7.2.2
The Owner. How the Owner Governs Apa-Canal The Municipality is the owner of the Communal Services Utility, and the company is from organizational point of view placed as a department in the Town Administration under the Town Council.
rao1e 2005-01-17
According to a census a couple of years ago the number of inhabitants was 14848.
SWECO INTERNATIONAL
The Mayor appoints the Director of the utility and the Town Council approves the appointment. The present Director came to the utility 23 ago. He worked as Chief engineer until 10 years ago when he became the director of the company. He is fully entitled to take any decision in the daily operation of the utility. The Town Council Budget decides budget and tariffs. Other questions are discussed with the Mayor and the deputy Mayor. 7.2.3 Legal Aspects The Communal Services Utility has its own statutes but no separate service agreement with its owner describing for instance the level of service to the customers. The statutes will be revised as the Communal Services Utility now has activities also related to food production. The Municipality is the owner of all the assets including both water and wastewater facilities, and the Communal Services Utility Fleti operates these facilities. The town has no local rules or regulations in addition to the Moldavian state regulatory framework. In contracts with industries the Communal Services Utility uses state rules for discharge of sewage to the municipal network. 7.2.4 Organization and Management The organization chart for Communal Services Utility Fleti is presented below. This organization was decided year 2004. The utility has a management team consisting of the Heads of Departments. The team has meetings each Monday at least partly following a fixed agenda for more general management questions. There are no minutes of meetings. The director takes notes himself in his personal notebook. The Communal Services Utility has 5 computers of which 3 for accounting and billing, 1 for the secretary and personnel responsible person and 1 for commercial and legal purposes. There is a Moldavian integrated management information system (MIS) called
rao1e 2005-01-17
SWECO INTERNATIONAL
Universal. The capacity and quality of that in comparison to for instance 1C is not known.
Director
Chief Engineer
Chief Accountant Accountants
Economist
Lawyer Technical Controller Sales agent
Assistant
Head of water supply and sewerage Water supply Engineer
Auxiliary service
Accountantcashier
Storekeeper
Wastewater network Engineer
Controllers
Wastewater Engineer
Business and Hotel administration Territory development and Sanitation Engineer
Mechanical Engineer
Safety Engineer
Energy service engineer
Head of Emergency Station
Figure 7.2.1: Organization of Communal Services Utility Fleti
rao1e 2005-01-17
The type of management stile is, as in most other companies visited in the project, to major extent a top-down management with information upwards and orders downwards. Principals of accountable management or management by objective are not
SWECO INTERNATIONAL
known, but after a brief description of these ideas, the Director told that he to some extent was using them in his work. The heads of departments have to follow a given budget but have no incentives and no formal rights supporting their work. The utility has an action plan including budget for each of the heads of departments, who has small possibilities to influence their work and the content of this document. 7.2.5 Staff. Efficiency and training needs Fleti Communal Services Utility has 132 employees of which 54 are working with the water and wastewater services. The number of households served is 3967 and the number of business and budget organizations is around 90. Al these can be seen as customers and the productivity based on this is 75 customers per employee. The number of connections is not known. The number of staff is increasing as the network is increasing. There are many ad hoc workers having farms or fruit gardens in the villages but doing a work for the utility then and then. The Director estimates the average age of the staff to be 45 50 years. There is a strong need for training in most technical and financial areas e.g. leak detection, technical training on both low and high level, welders, IAS, IT and management. There is also a need for some new personnel, especially IT personnel. Just now there are a few students from Chiinu, but they want to go back to the capital. The management of the company is interested in supporting training, also by financial means. The average salary in the whole company is around 1074 lei per month. For people working with water and wastewater it is some 1250 1300 lei per month. This is not enough high for attracting and keeping important staff. 7.2.6
rao1e 2005-01-17
Estimation of Consumption. Billing and Collection 74% of the household customers and 100% of the companies and budget organisations have meters. The customers own the meters.
SWECO INTERNATIONAL
Consumption norms are used for customers without meters. Customers are reading the meters themselves. The utility has also 3 meter readers visiting the customers every third month. That means around 700 customers per meter reader. The utility has also controllers checking the meter readers. The controllers distribute the bills except for bills to customers at a pace called Train Station to which regular post is used. The utilities accountants are sending the bills to companies directly. The customers may pay at Apa-Canal, in banks and in post offices. The collection rate 2006 was 105%. This high figure is due to payment of old debts and type of accounting. There is a long-term trend of improving collection rates, due to for instance better service making people more willing to pay. In case a customer does not pay, he gets first a notification. If he then does not pay the Services Utility may sue him, although this is very seldom, and finally the utility cut the supply. 7.2.7 Relations to customers and other stakeholders The Services Utility is to some extent following a quality programme and a guarantee in its relation to the customers and the society. They answer for instance on queries or complaints from customers within 12 hours. They have information to the customers on backside of the bills. They are giving information in media as TV and radio. Visits from school classes happen. They are following national environment rules. On the other hand there is much more to do, such as opening a homepage and further specify the quality to the customers, for instance maximum unforeseen interruptions in water supply to a customer per year. 7.2.8 Consultants Comments The utility has a lot of activities also beside the water and wastewater services. Therefore it is necessary to have clear cost centres defined, for instance in order to follow the development of the water and wastewater services and be able to carry out good quality benchmarking. The form of management described under section 2.3.4 is perhaps slightly better then at the majority of utilities visited. The staff efficiency is 75 customers per employee, which compared to the other utilities visited is slightly lower than the average utility visited.
rao1e 2005-01-17
SWECO INTERNATIONAL
There is a need to increase the average salary level making it possible to attract qualified personnel and there is also a need for training in many fields. The management seems to have an interest both in training and other improvements of the utility. The rate of meters for households, 74%, can be improved. The collection rate is very high. Further comments, see section 15.
7.3
7.3.1
Social environment in Fleti
7.3.1.1
Population
Number of population for Fleti town as at 1st of January 2007 is the following:

(Thou.) 18.1 18.1 18.1
7.3.1.2
In Fleti town are 6 preschooler institutions, 2 schools and one gymnasium in which are studying 1,090 pupils, 2 theoretical high schools for 1,744 pupils and a profession school for 145 students. Health protection system consists in 12 institutions, including: a hospital, a centre for family doctors, a maternity centre, an emergency station and 8 pharmacies. 122 doctors and 465 assistants are working the system.
rao1e 2005-01-17
SWECO INTERNATIONAL
7.3.1.3
Estimation of Household Revenues Average nominal monthly salary - National level Average nominal monthly salary - Fleti County Disposable household income (national average per household member) Average monthly pension (national level) Average household disposable income in the county (per member) Average monthly pension at county level Lei Lei Lei Lei Lei Lei
Fleti 2004 2005 1,103.1 1,318.7 728.6 866.8 491.4 325.3 324.6 214.9 568.6 383.4 373.7 252.0
No. No. Lei Lei
3.0 1.8 973.7 386.8
3.0 1.8 1,121.2 453.6
7.3.2
Economic environment in Fleti
7.3.2.1
Natural resources
Total surface of Fleti town is 2,642 ha, out of which the surface between towns represents 516 ha. Agricultural fields are the main component, representing 1.189 ha (44% from total). This indicator corresponds to medium urban localities, with a relatively high urbanization percentage.
7.3.2.2
rao1e 2005-01-17
Total length of roads in Fleti is 26.9 km, out of which 22.9 km are asphalted. Fleti town is not currently supplied with natural gas.
SWECO INTERNATIONAL
7.3.2.3
Economy
In Fleti town are registered 3,246 economic agents.
7.3.2.4
Industry
The main industrial branches are: light industry, machinery construction industry and processing industry for agricultural production. Volume of industrial production in Fleti Raion, compared to the total industrial production in Republic of Moldova, is presented in the following table:
Table 7.3.3: Volume of Industrial Production Evolution Fleti Raion
Volume of industrial production in 2006 Total

out of which Fleti
Current prices (mil. lei) 17533

160.6
2004 Compared to previous year (%) 106.9

139.9
Current prices (mil. lei) 21123.5

232.9

98.9
Current prices (mil. lei) 22243.2

329.7

100
Total production on Republic of Moldova increased with 26% during the period 2004-2006. For Fleti Raion, the production increased significantly with 45% in 2005, and continued to increase with 41% in 2006, demonstrating an improvement of the local industry environment.
7.3.2.5
Financial situation of Commercial Companies in Fleti Raion, compared to the total financial situation of Republic of Moldova, is presented in Table 7.3.4. As can be observed from the table, the number of profitable enterprises increased, but the percentage of profitable enterprises in total reporting enterprises remains approximately the same (46%). For Fleti Raion, number of reporting enterprises had a variable evolution, the percentage of profitable enterprises remained approximately the same -54%.
rao1e 2005-01-17
SWECO INTERNATIONAL
Average number of employees at national level kept a stable trend. In Fleti Raion, during the analyzed period, the average number of employees registered a decrease of 10%.
Jan.-Sept. 2004 Total Fleti

29423 11289 13906 572786 2790 53031 19140 61291 238 138 93 9383 9.5 311.7 106.9 366.4

31870 12380 14893 570143 3424 66870 22717 68420 212 115 84 9368 14.5 356.8 140.5 432.1

34700 13155 16532 569698 3689 79052 26867 81804 232 127 85 8466 10.9 353.2 137.9 410.3
Financial result before tax increased in 2005 with 52%, and in 2006 has decreased to value close to the value from 2004. Sales revenues increased in 2005 (14% compared to 2004), followed by a stable evolution in 2006. Receivables related to commercial invoices and budget compensation increased in 2005 with 32%, followed by a stable evolution in 2006. During the analyzed period, debts recorded an increase of 12% in 2006, compared to 2004.
7.4
7.4.1
Financial Aspects
7.4.2
Analysis of the historical financial performances In order to obtain a clear picture of the financial status of the company, we have briefly analyzed the financial statements for the
rao1e 2005-01-17
SWECO INTERNATIONAL
years ended at December 31, 2004, December 31, 2005 and December 31, 2006.
7.4.2.1
Table 7.4.1: Operating result evolution - Fleti
Source: Water Utility from Fleti
2004 163.0 79.9 69.7 13.4 210.5 210.5 (47.5)
2005 210.1 160.6 30.0 19.6 240.6 41.5 42.7 33.1 9.6 47.2 12.6 40.3 56.3 (30.5)
2006 252.5 186.1 46.6 19.7 280.5 32.0 54.8 42.8 12.0 46.8 7.1 37.4 102.5 (28.1)
In 2006, approximately 48% of the operating revenues result from water supply and 26% from wastewater operations. The total operating result is negative for the entire period of analysis with an improvement tendency in 2006 as result of tariff increases from the respective year. The evolution of the structure of operating revenues is presented in the following chart:
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 7.4.1: Structure of Sales - Fleti

Structure of Sales
140.0 120.0 100.0 80.0 60.0 40.0 20.0 2004 2005 2006
Thousand USD/y
W ater W astewater
The level of revenues increased in 2006 because, although the invoiced quantity slightly decreased, the tariffs increased significantly in compared to the previous year. The evolution of the water losses is presented in the table below:
Table 7.4.2: The Evolution of Non Revenue water 2004-2006 - Fleti
2004 Th. m3 311.1 148.4 -52%
2005 Th. m3 398.3 129.5 -67%
% 28% -13%
2006 Th. m3 370.6 123.8 -67%
% -7% -4%
Table 7.4.3: The Evolution of Invoiced quantity 2004-2006 - Fleti
Evolution of invoiced quantity Water Inhabitants Private companies and institutions Waste water
2004 Th. m3 148.4 127.7 20.7 81.8
2005
2006 % -4.4% -6.2% 6.5% -2.7%
Th. m3 % Th. m3 129.5 -12.7% 123.8 111.1 -13.0% 104.2 18.4 -11.1% 88.5 8.2% 19.6 86.1
rao1e 2005-01-17
SWECO INTERNATIONAL
Inhabitants Private companies and institutions

56.1 25.7
60.7 27.8
8.2% 8.2%
58.3 27.8
-4.0% 0.0%
The water consumption slightly decreased in the last years mainly as result of decrease of water delivered to inhabitants. In the last years, the evolution of water production delivered to companies and institutions of is the result of the poor economic situation of companies and public institutions. The weight of water delivered to companies and institutions is low (represents only 16% in total invoiced water). Because the level of tariff for companies and institutions is significantly higher than for domestic customers, these entities have the tendency to find water from other sources (have their own sources) and to pay only sewerage services to the utility. The delayed adjustment of tariff compared with the cost increases had a negative impact on the performances of the water utility. The water utility cannot control the tariff adjustment process, which is the prerogative of the Local Council. The water utility can propose tariff increases based on cost increase but the Local Council takes the final decision. The evolution of the structure of total operating costs for the water and wastewater activities is presented in the following chart:
Figure 7.4.2: The Structure of Operating Costs - Fleti
Structure of operating costs
21.0%
Energy
44.3%
Personnel (salaries and related taxes) Depreciation
Other costs
30.8% 4.0%
rao1e 2005-01-17
SWECO INTERNATIONAL
The most important cost elements are other costs mainly consisting of general and administrative expenses (44.3%), direct personnel costs (wages, salaries and related taxes), which represents 21% of operating expenditures in 2006 and energy costs, which represents about 30.8% of operating expenditure in 2006. The weight of energy costs was relatively constant in the last years. The salaries have increased in nominal terms every year. The increase of salaries has to be performed based on premises stipulated in the law regarding evolution of salaries in the public sector. This element is more or less not under the control of the water utility. Due to lack of financial resources the last mandatory salary increases was not yet implemented. The evolution of operating costs is presented in the following chart:
Figure 7.4.3: Evolution of operating costs - Fleti
100.0 90.0 80.0
Thousand USD/ye
70.0 60.0 50.0 40.0 30.0 20.0 10.0 E nergy P ersonnel (salaries and related taxes) O ther costs 2005 2006
The evolution of operating costs highlights the relatively prudent policy regarding expenditures in the last years due to lack of financial resources.
7.4.2.2
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 7.4.4: The Level of Account Receivables from Commercial customers as at December 31, 2006 - Fleti
31.12.2006 USD % 13,018 43.8% 8,584 28.9% 8,117 27.3% 29,719 100.0%
A breakdown of the account receivables from domestic companies and other commercial companies is shown in the following table:
Table 7.4.5: The Level of Account Receivables from domestic customers as at December 31, 2006 - Fleti
31.12.2006 USD % 131,900 8.3% 483,120 30.2% 982,700 61.5% 1,597,720 100.0%
The accounts receivable mentioned above are related in a proportion of 80% to the former Termocom, due to the translation of the data to their trial balance. The management of the company needs to have among its priorities the increasing of the collection level. In the last years the water utility succeeded to maintain its collection ratio to high levels. In the current conditions, it is important to maintain the level of the outstanding debt at low levels (at least to maintain this level constant) to be able to generate sufficient cash to pay the current obligations (mainly the energy bill). This is essential for a sound development. The level of short-term liabilities has slowly increased in the last years. The actual management of the utility has succeeded to reimburse the short-term credit contracted last yea. A breakdown of the short-term liabilities is presented in the following table:
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 7.4.6: Evolution of short-term liabilities (amounts in Thousand USD) - Fleti
2004 192.9 40.2 16.1 83.0 38.2 15.5
2005 200.3 32.4 12.7 107.3 30.2 17.8
2006 224.0 24.4 10.1 109.9 54.8 24.6
Table 7.4.7: Aging of liabilities to social fund - Fleti
31.12.2006 USD % 8,470 7.7% 28,563 26.1% 72,499 66.2% 109,531 100.0%
Table 7.4.8: Aging of liabilities to state and local budgets - Fleti
31.12.2006 USD USD 8,919 16.3% 14,173 25.8% 31,755 57.9% 54,847 100.0%
7.4.2.3
Tariff analysis
Historically, tariff levels have been effectively imposes by the Ministry of Communal Services and Territorial Development. Because of the institutional restructuring and decentralization, the utility may increase the tariffs without the approval of the central authorities but with the approval of the local authorities (municipality) and ANRE.
rao1e 2005-01-17
SWECO INTERNATIONAL
The domestic tariff level is calculated based on the total cost per cubic meter plus a profit allowance (between 5-10%). Changes would be applied following significant increases in costs, mainly electricity. The evolution of invoiced quantity, the increase of prices for energy and the increase of salaries should have been the main factors affecting the evolution of tariffs. The tariff evolution of the water tariffs for the last years is presented in the following chart:
Figure 7.4.4: Water Tariff Evolution - Fleti
3.00 2.65 2.50 2.00 D estic om custom ers 1.34 1.34 Instutions 2.65
2.68
2.68
USD/m
1.50 1.00
0.60 0.50 2004 2005 0.32
0.61
2006
The last tariff increase for water services was in 2006, of approximately 5%. The tariff evolution of the sewerage tariffs for the last years is presented in the following chart:
Figure 7.4.5: Sewerage Tariff Evolution - Fleti
rao1e 2005-01-17
SWECO INTERNATIONAL

1.80 1.60 1.40 1.20 D estic om custom ers 0.88 0.88 P ublic Institutions 0.47 0.47 0.25 0.15 0.43 C m om ercial custom ers 1.69 1.69
USD/m
1.00 0.80 0.60 0.40 0.20 2004
2005
2006
Wastewater tariffs increased continuously over the period, 2.94 times in 2006, when compared to 2004, for domestic customers and 3.84 times for commercial customers and pubic institutions. For the future the utility should consider the possibility and to take all the necessary actions to adjust the tariff more often to avoid the negative effects of the cost increases due to the inflation. In the future the water utility will have to cover also the possible debt service related to the loan from the World Bank. Briefly, the methodology for approving tariffs consists of the following steps: The utility specialists are preparing a study for tariff adjustment The study is sent to the Local Council and ANRE for approval.
rao1e 2005-01-17
SWECO INTERNATIONAL
7.4.2.4
Even if the utility has recorded achievements in the last years, financial management is still far from the requirements of a modern utility. A lack of skills and human resources leads to limitations in the activities performed by the Finance Department. The accounting department consists of 7 persons: 1 chief accountant, 3 accountants and 1 economist; sales unit: 3 persons. The utility has 5 computers: 3 in the accounting unit, 1 for the sales unit and 1 for secretary unit. They purchased an accounting software from own resources, called Soft Universal Accounting Chisinau. Currently they are keeping electronic records. The financial management is limited to good management of payments, and is unable to give effective support to the overall management decision-making process, particularly the good management of the growth potential. Without minimizing the technical and implementation problems that the utility has to face in the near future, the financial planning area is most in need of enhancement and restructuring efforts. We recommend the introduction of cost accounting by creating cost centres for the main activities (water and sewerage). There is important to find out the performances of each sector. We recommend the extensive use of computer for financial management. Accounting, billing and collection, financial forecast are just a few items which can be performed more efficient by using a computer. Even if the utility has only one computer, its degree of usage is still very low. The process of financial planning does not include all the parties that should be involved with financial planning matters and has not the necessary prediction-correction role. The management team of the utility has to prepare a long-term strategy to assure the sustainable development. This analysis can be used as a starting point in preparing this strategy. Without a clear strategy for sustainable development of the activity, the utility continue to survive but with very limited potential and lower and lower performance.
rao1e 2005-01-17
SWECO INTERNATIONAL
7.4.3
Financial Selection Criteria By applying the criteria mentioned under section 2.4.3, the scores obtained by the water Operator from Fleti are presented in the following table:
Table 7.4.9: Scores for the Water Utility from Fleti
Historical liabilities Liabilities to Suppliers, Social Fund and State of Local Budgets Total Operating revenues Weight of Liabilities in Total Revenues Number of points Tariff adjustment Last tariff adjustment was in July 2005 In the period 2004-2007 there were 2 tariff adjustments Total Operating ratio Operating revenues Operating profit Operating revenues/operating costs Points Account receivables collection period Trade receivables(A) Sales (B) (A/B)*365- days Points Total points
2006 USD 224,014 252,482 88.7% 2 Points 2 3 5 2006 USD 186,110 178,054 1.05 6 2006 MDL 1,981 2,444 296 0 13
The results are analyzed in the final conclusions chapter when the decision regarding the introduction of Fleti in the 10 list towns is analyzed.
rao1e 2005-01-17
SWECO INTERNATIONAL
7.5
7.5.1
Technical Aspects
Specific Task Objectives related to technical Analysis The specific tasks of this sub assignment for the Pre-Feasibility Phase were clarified together with the Client in the beginning of the assignment. The tasks agreed were as follows: To prepare water and wastewater balances for 15 target towns to describe the present situation and water and wastewater projections for the year 2013; to assess the present status and condition of present water supply and sanitation facilities in 15 target towns in order to evaluate the need for replacements and/or needed rehabilitation on short-term basis; and to prepare preliminary short-term investment program for years 20092013 for the 15 target towns in order to improve ad develop the present functional level of their water supply and sewerage services.
7.5.2
Water supply and sewerage in Water intake consists of 21 deep wells, out of which 12 are renovated and eight (8) in use. 13 well are taken out of operation (out of these 13 four (4) are renovated but nine (9) are in need of complete restoration). Used 8 wells are all located at same water intake area situated some 3 km west from the town centre. Normally four (4) wells are used at same time for whole water production (some 1,000 m3/day). From used wells water is pumped first to two (2) separate underground water reservoirs which are placed at pumping station PS2 site. PS2 is located near the water intake area and reservoirs serves as intake basins for pumps. From PS2 water is pumped to two (2) separate reservoirs located at district pumping station PS3 site situated on high level in the town centre. Water supply network is divided into two (2) different pressure zones. Zone 1 is supplied from water tower (water from PS3) while zone 2 is the gravity pressure zone and supplied directly from the underground reservoirs. The pressure in zone 1 and zone 2 varies between 10 to 30 metres. The main network is constructed in 1963 1978 and has a total length of approximately 41 km. Only some 8,000 (45 %)
rao1e 2005-01-17
SWECO INTERNATIONAL
inhabitants are currently connected to the water supply network while more than 10,000 inhabitants are dependable on private wells. The only water treatment method used is chlorination to underground water tanks by the pumping station PS 2. The dilution of chlorine and dozing of chlorine solution is done manually directly to the reservoirs once per day. The total length of main sewerage network is approximately 31 km. Sewerage network is constructed in 1972 1981 and has two (2) district pumping stations (SPS1 and SPS2) out of which one (1) (SPS2) is also a inlet pumping station for the WWTP which is located some 3 km south-west from the town centre. The pressure pipeline from main district pumping station (SPS2) to the WWTP has length of 2.9 km. Only some 2,400 inhabitants out of 18,100 are connected to sewerage network while the rest are using septic tank systems or dry lavatories. However, the number of septic tank users is not known. The wastewater treatment plant was taken into operation in 1976 having design capacity of 10,000 m3/day. In 1981 the plant was upgraded to represent complete biological treatment process. In general, the wastewater treatment plant is in a satisfactory condition and some of the mechanical equipments have been recently replaced. Still, some of the treatment units are in a very poor condition and have insufficient capacities. At present the wastewater flow to the treatment plant is only some 235 m3/day while the design capacity of the plant (year 1981) is 1,500 m3/day. In the following sections the water and wastewater balances and the technical status of water supply and sanitation facilities as well needed investments on preliminary level have been described in detail. 7.5.3 Water Supply System
7.5.3.1
Present System
rao1e 2005-01-17
Water intake consists of 21 deep wells, out of which 12 are renovated and eight (8) in use. 13 well are taken out of operation (out of these 13 four (4) are renovated but nine (9) are in need of complete restoration). Used 8 wells are all located at same water intake area situated some 3 km west from the town centre. Normally four (4) wells are used at same time for whole water production (some 1,000
SWECO INTERNATIONAL
m3/day). Water storage consists of two (2) separate underground water reservoirs which are located at water intake area (within PS2) and two (2) separate underground water reservoirs located in the town within the water distribution pumping station PS3. The total capacity of water intake (three wells in operation, 600-1,500 m3/day each) is 3,500 m3/day. Approximately 10,000 inhabitants out of 21,000 are currently connected to the water supply network. All water is supplied from reservoirs located at district pumping station PS3 site. The network is divided into two (2) different pressure zones. Zone 1 is supplied from water tower located at PS3 site (water is delivered to the tower by PS3) while zone 2 is the gravity pressure zone and supplied directly from the underground reservoirs. The pressure in zone 1 and zone 2 varies between 10 to 30 metres. To avoid higher pressures in the Zone 2 in lower part of the town the network is equipped with pressure reducing valves. Water supply network have a total length of approximately 41 km. Only some 8,000 (45 %) inhabitants are currently connected to the water supply network while more than 10,000 inhabitants are dependable on private wells.From used eight (8) wells water is pumped first to two (2) separate underground water reservoirs located at PS2 site. From reservoirs water is pumped by PS2 through 2 kilometres long pressure pipeline to two (2) separate underground water reservoirs located within PS3. Water pumping station PS2 is equipped with three recently installed (year 2003) centrifugal pumps, which are in a good operational condition. PS3 is renovated (pumps, valves and frequency converter) in 2006 and has three (3) centrifugal pumps in operation. The only treatment process used is chlorination to underground water tanks within PS2. However, dilution and adding of chlorine solution is done manually directly to water reservoirs once per day. The water quality is measured approximately 23 times per week. At present, mainly due high ammonia the quality of water does not correspond to Moldavian Normative on Potable Water (see Table 7.5.1).
Table 7.5.1: Analysed water quality measured from used deep wells. Data is provided by town of Faleti.
rao1e 2005-01-17
Parameter Colour Turbidity Taste

Water Supply and Sanitation Implementation Unit 12 June 2007 FINAL Pre-Feasibility Study Report
Unit Grade mg/l Grade
Requirement 20 1.5 2
Actual 25 0.38-1.7 1
191
SWECO INTERNATIONAL
Parameter pH Hardness Dry residuals Nitrites Chlorides Copper Fe Ammonia
Unit Mol/l mg/l mg/l mg/l mg/l mg/l mg/l
Requirement <9 7 1,000 45 350 1.0 0.3 2.0
Actual 8.4-8.5 1.6-2.3 988-1,171 0 33-34 0 0.25-0.5 2.8-3.8
Used underground water tanks within PS2 (2 units) have capacities of 2 x 500 m3 (1,000 m3 in total) and reservoirs within PS3 have capacities of 1x 500 m3 and 1x300 m3 (800 m3 in total). The main water distribution network is from 1963-1978 consists of asbestos, steel and cast iron and polyethylene pipes. The range of diameters is from DN 50 to DN 300. The total length of network is 41 km out of which 6 kilometres are renovated in 2006. Different lengths of used pipeline materials and age of the network have been presented in Table 7.5.2.
Table 7.5.2: Water Supply Network in town of Faleti.
Material Steel Cast iron Asbestos
DN 150 250-300 100 200-300 50-76 100-150 Total
< 10 years, km
10-30 years, km
30-40 years, km 10.5 5.2 8.9 5.8 6.3 4.7 41.4
Total , km
41.4
Table 6.5.2 illustrates the situation in Faleti at the end of the year of
2005 and does not include newly (in 2006) installed polyethylene pipelines (some 6.0 kilometre which have replaced old cast-iron and asbestos pipelines).
rao1e 2005-01-17
SWECO INTERNATIONAL
7.5.3.2
In General, centrifugal pumps and other mechanical equipment used for water intake are in satisfactory condition. However, pipelines from water intake wells to the reservoirs at PS2 should be replaced. Pumped water amounts from different wells are not measured and operation is not monitored. Existing chlorination plant is not in operational condition and dilution and dozing of chlorination chemical is carried out manually. Water reservoirs within PS2 and PS3 have not been renovated since construction in 1963. In 2006 the water distribution network has partially been renovated and some 6 kilometres of old asbestos and cast iron pipelines have been replaced with new polyethylene pipelines. However, most of the network is still made of old asbestos, steel and cast iron being older than 30 years. Apa-Canal has reported several problems with old pipelines (mainly within asbestos and steel pipelines). The number of reported bursts was 187 in 2006. An-accounted water losses in 2006 constituted 250,000 m3 (67% from the produced water amount), including leaks, false metering readings and illegal connections. Due a very high number of bursts some 30 km of existing network including customer connections could be considered to be in need of urgent renovation. Also automation of pumping stations PS2 and PS3 is needed. Also existing water reservoirs are in need of complete renovation. Together with renovation of the existing water supply network the main focus shall be paid in extension of network in order to provide water supply for more inhabitants. It would also be feasible to connect both pressure zones with pumping stations so that water to these zones would be delivered directly from pumping stations not from reservoirs and/or water tower. However, this arrangement would increase the pressure in the network and could be feasible only after renovation of network first. Tentatively it could be estimated that needed network extension (to connect all inhabitants in Faleti to water supply) would be some 30 km of new polyethylene pipeline (including household connections and in-house flow meters).
rao1e 2005-01-17
SWECO INTERNATIONAL
Still, one of the main targets in order to secure a reliable water supply and a good water quality in town of Faleti would be finding a new water source for water intake. At present quality of water within water intake is suffering from very high ammonia concentrations which is mainly due heavy use of strong fertilisers in agriculture in 60s 80s. Still, it could be noted that ammonia concentrations in ground water are decreasing resulting lower measured values every year. However, it could be possible that ammonia concentrations are still too high for several decades. There are no suitable surface water sources (natural springs, rivers or lakes) in near by the town of Faleti. In 2004, Apa-Canal carried out comprehensive study to find out new suitable water intakes from ground water sources. During this time several test drillings were carried out and water quality and water amounts were analysed carefully. Still, suitable ground water sources were not found main reason being again considerably high ammonia concentration and/or insufficient amount of water in wound ground water basin. In addition to above mentioned, there have been aim to construct a water pipeline from river Prut to town of Faleti. This 23 kilometres long pipeline would have connected Faleti to the water treatment plant which would have been established by the river Prut. Construction of this system was actually started in 1980s but were newer finished including some 70 % of 23 km long pressure pipeline and some structures for water treatment plant. Still, original design (and construction works) for this system was made for 56,000 m3/day of water consumption. Current needed water amount for the town is some 1,000 m3/day only. However, during this Pre-feasibility Study Phase condition of above mentioned pipeline and or water treatment plant were not analysed and it is difficult to say how big part of existing structures could be used in future if the system is reconstructed.
7.5.3.3
Water pumping stations PS2 within water intake operates between 4:00 - 24:00 hrs (20 hrs per day). Pumped water amounts from different wells or at PS2 are not measured and operation is not monitored.
rao1e 2005-01-17
SWECO INTERNATIONAL
The only water treatment process used is chlorination to underground water reservoirs within PS2. However, the chlorination is done manually and operation is not monitored automatically. According to the analysis from past years the quality of supplied water is suffering from high ammonia concentration. Currently, all the water which is pumped to the distribution (1,000 m3/day on average) is taken from four (4) different wells. Currently there are eight (8) wells in operational condition and even if the amount of non-revenue water (67 %) could not be degreased the amount of water within current water intake is sufficient when the network is extended to cover all inhabitants in the town of Faleti. Beginning of year 2007 there were some 6,000 inhabitants living in houses with household-meters installed. According to Apa-Canal all business utilities in Faleti were having flow meters installed. The level of population within metering covers some 33 %. Level of metering for institutions and business entities is 100%. All private apartment meters are size of DN 15 while size of meters installed at institutions and organizations vary from DN 15 to DN 50 depending on connection diameter. The energy efficiency for different water pumping stations (including intake wells) was calculated based on available data presented by Apa-Canal and given pump design parameters. Total energy consumption of pumping stations for water supply system in 2006 was 532,000 kWh. The average used energy consumption (kWh/m3) at different pumping stations could not be calculated thus energy consumptions and pumped water amounts for each pumping station separately were not available. 7.5.4 Sewerage System
7.5.4.1
Present System
rao1e 2005-01-17
The main sewerage network is constructed in 1972-1981 having length of 31 km and is made of asbestos, cast iron, ceramic pipelines and steel. Network consist two (2) district pumping stations SPS1 and SPS2 out of which SPS2 is also the inlet pumping stations for WWTP and is renovated (pumps and valves only) in 2003. SPS1 is in a need of full renovation and/or replacement. WWTP is located some 2.5 kilometre south-west from the town centre. Only some 2,400
SWECO INTERNATIONAL
inhabitants out of 18,100 are connected to sewerage network while the rest are using septic tank systems or dry lavatories. However, the number of septic tank users is not known. The wastewater treatment plant was taken into operation in 1976 having design capacity of 10,000 m3/day. In 1981 the plant was upgraded to represent complete biological treatment process having design capacity of 1,500 m3/day and including the following treatment units: Grit chamber; Primary sedimentation tanks; Aeration; Secondary sedimentation; Sludge handling in sludge drying beds; Biological ponds for effluent wastewater; Sludge pumping station and compressor building; and Chlorination plant (not in use).
In general, the wastewater treatment plant is in a satisfactory condition and some of the mechanical equipment like some pumps and air blower has recently been replaced. Still, some of the treatment units are in a very poor condition and have insufficient capacities. The current flow (year 2006) to the treatment plant has been some 235 m3/day meaning that the plant is operated with only some 15 % of the design capacity. At present grit removal, primary clarification, aeration and secondary clarification are in operation. Still, due a rather poor condition of process units and very long retention times the proper treatment is very difficult. Treated wastewater is led to biological pond before discharging into the recipient. Retention time in the pond is very long and due evaporation the amount of discharged wastewater is considerably small (less than 150 m3/day on average) taken into consideration the size of the town.
7.5.4.2
The main sewerage network is from the 1972-1981 and has not been renovated during past 30 years. The main materials used are ceramics and asbestos but also cast iron and steel pipelines are used as follows:
rao1e 2005-01-17
- Gravity sewers (27 km in total): o Cast iron, DN 150:
4.3 km
SWECO INTERNATIONAL
o Asbestos, DN 150-300: o Ceramics, DN 150-300: o Steel, DN 300: - Pressure pipelines (3.8 km in total): o Steel, DN 100:
6.9 km 14.4 km 1.4 km 3.8 km
The existing sewerage network (excluding one (1) renovated (only pumps and valve) pumping station) could be considered to be in very poor good condition. However, within this study any conditional analysis has not been carried out and it could only be estimated that at least proper flushing of pipelines, emptying of manholes and replacement of poorest condition sections (some 20 kilometres) of the network will be needed. Still, the sewerage network covers only some 14 % of inhabitants and some 15,600 inhabitants are currently not connected to the sewerage system. In order to provide proper sanitation services for all inhabitants in the town of the first priority regarding investments in sewerage system would be enlargement of the network to cover as many water consumers as possible. This would mean some 30-40 kilometres of new sewerage network and at least one (1) new district sewerage pumping station. In General, the existing district sewerage pumping station SPS1 which is not renovated must be totally reconstructed. All of the mechanical parts are worn out and to be replaced. Also the intake tank for wastewater pumps shall be replaced. For new sewerage pumping station there is a possibility to use area reservation on the existing pumping station site. The pumping station building within renovated sewerage pumping station SPS2 is in a very poor condition and should also be renovated. Also the intake tank for wastewater pumps shall be replaced and pumping station should be equipped with proper flow metering. Almost all mechanical equipment at existing WWTP is at the end of their operational lifetime. Taken also into consideration the condition of structures of existing process units and insufficient process technology it could be recommended that the whole treatment plant will be totally renovated. This would include process modifications (to make WWTP to have more suitable capacity for current wastewater flow) and new machineries. For new process units there is a possibility to use area reservation on the existing plant site.
rao1e 2005-01-17
SWECO INTERNATIONAL
It shall be noted that within this study only visible conditional analysis were carried out and proper analysis of existing structures would be needed during the next project phases.
7.5.4.3
Sewerage pumping stations SPS2 which delivers wastewater to the WWTP and district pumping station SPS1 operates depending on the quantity of the incoming wastewater. The wastewater volume received at WWTP in 2006 was 86,000 m3 (235 m3/day, only 16 % of the design capacity). At present grit removal, primary clarification, aeration and secondary clarification are in operation. Still, due a rather poor condition of process units and very long retention times the proper treatment is very difficult. Treated wastewater is led to biological pond before discharging into the recipient. Retention time in the pond is very long and due evaporation the amount of discharged wastewater is considerably small (less than 200 m3/day). Only used mechanical equipment at WWTP are one (1) air blower and pumps for pumping sludge from primary and secondary clarifications to sludge stabilization bonds. The effluent quality in 2006 according to the information received from the town of has been presented in the Table 7.5.3.
Table 7.5.3: The effluent quality at WWTP in 2006.
Parameter Dry residuals COD Ammonia
Unit mg/l mg/l mg/l
Inlet concentration N/A N/A N/A
After Requirement treatment 318 1000 121 30 32 0.5
Thus the very low influent flow and considerably poor condition of used process units and insufficient process control the proper treatment of wastewater is not possible. The wastewater quality does not meet the requirements set by Moldavian authorities (still, only COD, ammonia and suspended solids are measured). Total energy consumption at WWTP in 2006 was 145,000 kWh which was 1.6 kWh/m3 on average.
rao1e 2005-01-17
The average used energy consumption (kWh/m3) at sewerage pumping stations SPS1 and SPS2 could not be calculated thus
SWECO INTERNATIONAL
pumped water data was not available. The total energy consumption at SPS1 and SPS2 in 2006 was 24,000 kWh. 7.5.5 Prioritising of needed Investments for years 20092013
7.5.5.1
In order to prepare preliminary water demand and wastewater projections the water and wastewater flows were analysed for the last three (3) years (20042006). Preliminary water demand and wastewater projections for the year 2013 are based on general assumptions as follows: - The connection rate to the water supply network is 75 %; - Per capita consumption in 2013 is 140 litres/capita/day; and - The connection rate to the sewerage system is 50 %. In addition to above mentioned, some assumption related to rehabilitation of the water supply network were made as follows: - Due repairing and maintenance work and installation of new pipelines for new housing areas the amount of leakages from the water supply network have estimated to decrease some 30 %; - Due installation of new in-house flow meters and due better accounting system amount of unaccounted water is estimated to decrease some 20 % (billed water demand per capita will increase); and - Due better in-house flow measurement and possible increase in water tariffs per capita consumption has estimated to decrease some 15 %. Preliminary water and wastewater flow projections for Faleti are summarised below in Table 7.5.4.
Population connected to the Water Supply network Population connected to the Sewerage network
rao1e 2005-01-17
Water pumped to the Distribution
Year 2006 Value Unit 8000 capita 2400 capita 852 m3/d 107 l/cap/d
Year 2013 Value Unit 14000 capita 9000 capita 1960 m3/d 140 l/cap/d
SWECO INTERNATIONAL
Non-Revenue Water Average total flow to WWTP 7.5.5.2 Needed Investments
Year 2006 Value Unit 60 % % 64 l/cap/d 236 m3/d 98 l/cap/d
Year 2013 Value Unit 32 % % 44 l/cap/d 1100 m3/d 120 l/cap/d
Investment need estimations are done for the period of years 20072013 in order to secure sufficient operation of water supply and sanitation systems and to provide water supply and wastewater treatment for more inhabitants in Falesti. City of Falesti have decided to restart the project for implementation of the water pipeline from River Prut to city of Falesti in order to supply better quality water for the city. At the moment the project to reconstruct/complete the 23 km is under preparation and discussions on city level. At this moment it is not known if this pipeline will be constructed until year 2013. Still, it would be feasible to consider this as a needed short term investment thus there are no available ground water (or any other water sources) sources available in the near surroundings of the city. Water treatment plant and the pipeline could be considered to be important to secure the water supply if the quality of water within current water intake does not improve considerably. Short-term investments needed for water supply system are listed below, and serves as a basis for the proposed investment packages: - Reconstruction/completion of water treatment plant by the River Prut and 23 km long pressure pipeline from river Prut to city of Falesti; - Rehabilitation of existing network (some 15 km in need of urgent renovation); - Continuing of installation of new in-house water meters; and - Construction of new network including household connections and new water meters for new consumers for at least 6,000 inhabitants (> 25 km). If new WTP (by the River Brut) and the pipeline will not be constructed:
rao1e 2005-01-17
- Rehabilitation of PS2 to secure 24 hours water supply;

SWECO INTERNATIONAL
- Rehabilitation of existing water reservoirs to secure the quality of supplied water; - Implementation of new chlorination plant within PS2 to secure the quality of water delivered to the network from reservoirs within pumping station PS2; and - Implementation of automation and water flow metering for water intake and for PS 2. In addition to above mentioned Apa-Canal would also need a new excavator to be used for network rehabilitation works and for construction of new network. Also proper leak detection equipment would be needed. In general, both sewerage network and WWTP require urgent rehabilitation and reconstruction works to enable reliable operation of sanitation operations and to fulfil the treatment requirements set for wastewater effluent quality by Moldovan authorities. The investments needed for sewerage system are listed below, and serves as basis for the proposed investment packages: - Flushing of existing sewerage network and emptying of manholes; - Renovation of district SPS1; - Enlargement of the network (including one (1) new sewerage pumping stations) to cover at least 9,000 new inhabitants; - Reorganising the existing septic tank emptying system including supply of one new vehicle for this purpose; - Reorganising the maintenance of sewerage network including supply of one new vehicle for flushing and cleaning of network; and - Reconstruction of WWTP for capacity of 1,100 m3/day (1st stage) with enlargement possibility for capacity of 2,000 m3/day (2nd stage).
7.5.5.3
Preliminary cost estimations for proposed investments packages within water supply and sanitation services are only preliminary estimations and will only be used as help in preparation of suitable investment packages in Feasibility Phase of the project.
rao1e 2005-01-17
Proposed investment packages have been prepared so that there are two different packages; 1st investment package for works which shall
SWECO INTERNATIONAL
be carried out in the very near future (within 1-2 years) and 2nd investment package for other works which must be implemented in order to secure the water and sanitation operations in long term: 1st Investment Package: 1.2 million USD in total Renovation of existing water intake and intake pumping station including new treatment equipment for chlorination and ammonia removal, 0.5 million USD; Renovation of sewerage pumping station SPS1 and purchasing one (1) vehicle to be used for flushing the sewerage system, 0.2 million USD; and Rehabilitation of most critical parts of the water supply network, 0.5 million USD. 2nd Investment Package, 8.5 million USD in total Rehabilitation and extension of of water supply network (40 km in total), 4.0 million USD; and Renovation and/or construction of 20 km in total of sewerage network and complete renovation of WWTP, 4.5 million USD.
rao1e 2005-01-17
SWECO INTERNATIONAL
8
8.1
Floreti
General
Floreti is located on the left bank of river Raut, at a distance of 115 km from the capital town of Republic of Moldova.
Figure 8.1.1: Location of Floreti
rao1e 2005-01-17
SWECO INTERNATIONAL
The official number of inhabitants is 15300. According to passport registration the number is approximately 19000. According to the Mayor interviewed the real number is, despite emigration of some 5000 persons to other countries and due to not registered immigration to Floreti from the surrounding rural areas, around 21000. The town had previously water supply three hours twice per day but has since 2003 water supply 24 hours per day. Floreti has a draft General Urban Plan until year 2020 prepared at the end of 2006. The town has also a strategic plan for implementation of the urban development plan. The strategic plan is mostly technical but includes also rough costs. Every 4th year an action plan for implementation of the strategic plan is updated. During the last 4 year the town made investments for more than 12 million leis (approximately 1 million USD). In 2004 Floreti Town Council approved The Sustainable Development Strategy for 12 months (drafted with assistance of UNDP Moldova), where among main strategic objectives have been mentioned development and modernization of the water supply and sewerage system. The Strategy stipulates the following tasks: identification and rehabilitation of the water network illegally constructed, in accordance with applicable requirements extension of sewerage system, construction of water and sewerage network in new districts, modernization of WWTP, construction of connection to the SorocaBli water main and rehabilitation of Gura-Cinarului water wells.
8.2
8.2.1
History The first water and wastewater services in Floreti began 65 years ago. The water and wastewater services were then owned by the state and operated as a section of the local authorities. The Moldavian government approved year 2000 a law saying that change from a state owned services to a municipally owned Joint-Stock Company. Floreti Town Council decided therefore to establish the present SA Servicii Comunale Floreti in May 2001 by reorganizing the Apa-Canal Floreti and the housing utility Direcia de Producere a gospodriei locativ-comunale a raionului Floreti.
rao1e 2005-01-17
SWECO INTERNATIONAL
8.2.2
The Owner. How the Owner Governs the utility The utility is a joint-stock company, and the Floreti Town Council owns all the shares. Both the Director and the local authorities appreciate the new legal form. It results in more freedom and less bureaucracy. The director may himself make procurements as long as they are smaller than 25% of the capital of the company. He may also to some extent take bank loans for the company without approval from the Town Council. According to a new law in Moldova (March 2007) the Mayor appoints the Director. Previously it was the Town Council (and in year 2000 the Town Council selected a temporary commission for appointing the General Manager). Instead of a normal board of directors there is only one person from the Town Council representing the owner and formally functioning as a board. This is legally possible as there is only one owner. Town Council
Town Administration
SA Servicii Comunale Floreti
Figure 8.2.1: Principle organization chart for Floreti (The board or administrative council is not shown.)
The Director reports to board and to the Town Council. He has operational contacts with the Mayor. The Mayor reviews the tariffs and functions as an intermediate between the company and the Town Council, but the final approve of tariffs and consumption norms is made by the Town Council. The Town has no service agreement with SA Servicii Comunale Floreti describing for instance the level of service.
rao1e 2005-01-17
SWECO INTERNATIONAL
8.2.3
Legal Aspects The enterprise has its own statutes but no separate service agreement with its owner describing for instance the level of service to the customers. The utility SA Servicii Comunale Floreti is both the owner and operator of all the assets including both water and wastewater facilities, solid waste management facilities etc. Beside the national legislation Floreti has local rules for discharge of wastewater from enterprises to the municipal system.
8.2.4
Organization and Management The organization chart for the enterprise is presented below. The director has worked in his present position since 2000. The utility has no formal management team, but the Director has a meeting with the heads of departments, maximum 9 persons every morning for discussion of current problems. He has also meetings with his nearest persons every second week when he goes through what to do during the coming 2 weeks and what was not carried out during the last 2 weeks. These meetings are the main part of the internal information in the utility. The company has approximately 10 computers: accounting 2 plus one for the warehouse, economists 2, technical personnel 1 collection 2, secretary 1 and IT 1. The system is integrated. The Director has no computer due to the financial situation in the company. There is also a GIS but not complete and used. There is, at least partly, a functioning MIS. The Director is getting information on economy, personnel etc each month, sometimes every week and day. The information is printed out, as he has no computer. There are thus rather good technical tools for good internal information, although there is a need for some additional hardware and software, but there is a clear need for training in improved understanding of the possibilities to use the system for efficient information, how to involve the personnel in the utilities business and
rao1e 2005-01-17
SWECO INTERNATIONAL
development, how information should be efficiently used in the company. Apa-Canal has prepared an action plan for 2005, but an updated and improved version is needed.
rao1e 2005-01-17
SWECO INTERNATIONAL
Shareholders General Assembly Administrative Council Director

Deputy Director
Chief Accountant Chief Engineer Chief Economist
Dispatcher Solid waste Dept: Head 1 Loader 6 Guard 4 Landfill worker 4

TOTAL 15 pers.
Water Dept: Head 1 Machine operators:

G. Cainarului -5 PS No. 1 Floreti 5 PS No. 2 Floreti 4 Operator Marculesti 4 TOTAL 19 pers.
Technical Dept:
Sewerage Dept:
Head 1 Engineer 1 Technician 1 TOTAL 3 pers. Calculations & Control Dept: Head 1 Engineer 1 Lawyer 1 Controller 8 Operator 2 Locksmith 6
TOTAL 19 pers.
Head of Dept 1 Technology Engineer 1 Laboratory Worker 1 Welder -1 Locksmith 1

Machine Operators:
Refuse collection Division (Budget): Head 1 Sweeper - 49 Loader 4

TOTAL 15 pers.
WWTP 8 PS 8 Cleaner -0.5

TOTAL 28.5 pers.
Admin. Staff: Accountant 1 Economist 1 System Administrator 1 Lawyer 1 Marketing 1 Privatizing Specialist 1 HR specialist 1 Safety Engineer 1 Office Assistant 1 Cashier- 1 Cleaner 1
TOTAL 11 pers.
Green spaces Division (Budget): Head 1 Green spaces spec - 16 Road marks worker 1 Lake worker - 1
TOTAL 23 pers.
Electrical/Mechanical Dept: Head 1 Transport Division 35 Construction Division 6 Electrical Division 4 Emergency Water Division Floreti 14 Emergency Water Division MarculestiLunga 6.5 Houses and sewerage net operation Division 9
TOTAL 75.5 pers.
Figure 8.2.2: The Organization of SA Servicii Comunale Floreti

rao1e 2005-01-17
SWECO INTERNATIONAL
Personnel from the Energy section and the Calculations & Control Department are remunerated based on results. Personnel working with water and wastewater have no bonuses or other incentives. Principles of accountable managers or management by objective helping to engage the personnel in the utilities business and improvement are known to minor extent. There is rather much top down management and management by order. The heads of departments have to follow a given budget but have no formal rights and tools supporting their work and to great extent no incentives. 8.2.5 Staff. Efficiency and training needs The total number of personnel in the enterprise is now 218. Of these 77 are directly involved in water and wastewater according to the organization chart. If 50% of the administrative personnel and the persons specified as electricians and the personnel in the Calculations and Control Department and Technical Department are working with water and wastewater, the total number of personnel relevant for this analysis is approximately 118. The number of connections to the water system is 102 apartment buildings, 1689 individual houses and over 100 companies and budget organizations, thus in total approximately 1900 connection. This results in a productivity of 16 connections per employee. The number of inhabitants connected to the water services is now 13882. (The number of consumers connected to sewerage is 9625.) The number of commercial and budget organizations, most of them small and medium size, is over 100. The productivity in the water services based on the number of consumers is around 120 consumers per employee. The utilitys customers are situated not only in the town of Floreti but also in four other adjacent places - the town of Marculesti, the village of Marculesti, the village of Lunga and the village of Varvareuca, which should be considered when comparing efficiency with other towns in the report. Most of the heads of departments, engineers and specialists have an education in the right area for their work but mostly not high and modern enough. Therefore there is a need for training for practically
rao1e 2005-01-17
SWECO INTERNATIONAL
all the personnel. The company has presented the following needs for training. No Department 1 2 3 4 Administrative staff Water Department Sewerage Department Electrical/Mechanical Department TOTAL U.M. persons persons persons persons No of persons 9 3 1 9 22
New young specialists are also needed but expensive. The average salary in the company increased from 738 lei per month in 2004 to 1187 lei per month 2006, but that is not enough to attract and keep qualified personnel. Two young specialists were employed 2006, but one of them left the company after a short period. The company has since 2003 carried out a number of investments financed both by own means and by credits and grants from the Centre of Energy Production and Efficiency, US AID and the National Environmental Fund. They have thus experience from organizing and managing major investment projects. 8.2.6 Estimation of Consumption. Billing and Collection In year 2006 the rate of population with meters was 99% (5501 meters of which 4993 had a low sensibility causing losses of more than 28%). The customers buy and repair the meters on their own account. Consumption norms are used for customers without meters. The customers are mainly reading their meters themselves. ApaCanal has also its own meter readers visiting for instance customers not paying. Metering and billing is monthly. The customers living in the town pay their bills at the utility. In the surrounding areas the customers pay to collectors from the utility visiting them. The utility is planning to open possibilities to pay in banks and post offices in the future. The collection rate has developed as below:
rao1e 2005-01-17
SWECO INTERNATIONAL
Description TOTAL collected, thousand lei Calculated Collected % collection Population Calculated Collected % collection Other consumers Calculated Collected % collection
2003 3901,8 4385,4 112,4% 1186,0 1162,0 98,0% 2715,8 3223,4 118,7%
2004 3568,4 3673,5 102,9% 1.212,2 1.256,6 103,7% 3747,9 4365,3 116,5%
2005 5491,3 5561,0 101,3% 1.375,0 1.472,6 107,1% 4116,3 4088,4 99,3%
(9)2006 5831,6 5587,4 95,8% 1.219,1 1.127,0 92,4% 4612,5 4460,4 96,7%
The main explanation given for collection rates higher than 100% was that customers paid old debts. 8.2.7 Relations to customers and other stakeholders SA Servicii Comunale Floreti has no own homepage for external information but the Town Council has one where information is presented also about water and wastewater. The company is also informing the customers through TV and newspapers. At 10.00 12.00 on Mondays people are also visiting the utility in order to get information. No schools classes or other groups are invited for information. There is no internal or external quality programme defining for instance issues such as quality of water and sewage service, quality of public relations, water demand management and environmental questions. 8.2.8 Consultants Comments The utility is a Joint-Stock Company, which to some extent seems to be more efficient than the average utilities visited. There are however still lots of work to improve the institutional situation.
rao1e 2005-01-17
SWECO INTERNATIONAL
As the company does not work only with water and sewage, it is important that the company has clearly defined cost centres making it possible to use correct performance indicators for efficient benchmarking. If the number off connections reported is correct, the staff efficiency, 16 connections per employee, seems to be very low. Also measured as number of persons served, 120 per employee, is rather low. The figures might to some extent be explained by the fact that the utility is serving four places in addition to the town Floreti. The utility is one of the best computerized among the visited companies and has also a home homepage. The rate of meters, 99%, is very high. The collection rate, 96% is also good. The company is qualified for continued participation Ii in the project. Further comments, see section 15.
8.3
8.3.1
Social environment in Floreti
8.3.1.1
Population
Number of population for Floreti town as at 1st of January 2007 is the following:
rao1e 2005-01-17
(Thou.) 15.3 15.3 15.3
SWECO INTERNATIONAL
8.3.1.2
Floreti town has high capacity of institutional education, consisting in 2 kinder gardens, 3 medium schools, a primary school, Ion Creanga high school and a polyvalent professional school. Public health institutions located in Floreti town are the following: Centre of Family Medics, emergency medical assistance station, Raion hospital with 380 beds and medical check-up section with 18 specialized doctors. 146 doctors and 518 assistants are working in this field.
8.3.1.3
Estimation of Household Revenues Average nominal monthly salary - National level Average nominal monthly salary - Floreti County Disposable household income (national average per household member) Average monthly pension (national level) Average household disposable income in the county (per member) Average monthly pension at county level Number of persons in household Average household (no of persons) Pensioner household (no of persons) Average household disposable income in the county (per household) Average monthly pensioner household revenues at county level (per household) Lei Lei Lei Lei Lei Lei
Floreti 2004 2005 1,103.1 1,318.7 863.3 1,075.6 491.4 325.3 384.6 254.6 568.6 383.4 463.8 312.7
No. No. Lei Lei
3.0 1.8 1,153.7 458.3
3.0 1.8 1,391.3 562.9
rao1e 2005-01-17
SWECO INTERNATIONAL
8.3.2
Economic environment in Floreti
8.3.2.1
Natural resources
Total surface of Floreti town is 1,512 ha, out of which 762.6 ha (50.4%) are agricultural fields. Most of the agricultural fields are public property.
8.3.2.2
Total town roads have a length of 56.3 km, including 32.4 km of asphalted streets. Total gas pipes length is 53.5 km. 3,740 houses and apartments are connected to gas infrastructure, as also 60 economic agents are.
8.3.2.3
Economy
Economic potential of Floreti consists in 1,219 economic agents, 2.75 times more than the number registered in 1998.
8.3.2.4
Industry
The industrial sector is being represented by alimentary industry, light industry and construction materials industry. Industrial potential consists in 13 economic agents, including 6 large enterprises, out of which 4 are activating the processing industry, one in the light industry and one in the glass industry. All together are ensuring 98% of the total industrial production. Commercial sector is formed of 65 retail units, 4 markets and 10 units of public nourishment.
Table 8.3.3: Volume of Industrial Production Evolution Floreti Raion
Volume of industrial production in 2006 Total out of which Floreti

rao1e 2005-01-17
2004 Compared to previous year (%) 106.9 76
SWECO INTERNATIONAL
Total production on Republic of Moldova increased with 26% during the 2004-2006 period. For Floreti Raion, the production decreased significantly with 54%, demonstrating a Mayor improvement of the local industry environment.
8.3.2.5
Financial situation of Commercial Companies in By applying the criteria mentioned under section 2.4.3, the scores obtained by the water Operator from Fleti are presented in the following table: Raion, compared to the total financial situation of Republic of Moldova, is presented in the following table:
Jan.-Sept. 2004 Total Floreti

29423 11289 13906 572786 2790 53031 19140 61291 239 102 115 9166 16.5 453.1 233.6 801.2

31870 12380 14893 570143 3424 66870 22717 68420 253 124 110 9456 15.2 559.3 159.9 731

34700 13155 16532 569698 3689 79052 26867 81804 251 122 107 8642 -12.5 610.8 192.8 736.6
As can be observed from the table above, the number of profitable enterprises is increasing at national level, but the percentage of profitable enterprises in total reporting enterprises remains approximately the same (46%). In Floreti Raion, the number of enterprises slightly increased, but the percent of profitable enterprises increased. Average number of employees at national level kept a stable trend. In Floreti Raion, the average number of employees registered an increase of 3% and continued with a decrease of 9% in 2006.
rao1e 2005-01-17
SWECO INTERNATIONAL
Financial result before tax had a stable evolution in 2004 and 2005, recording a positive value of approximately 16 mi lei. In 2006, the financial result was negative. Sales revenues increased with 23 % in 2005 and continued to increase of 9% in 2006. Receivables related to commercial invoices and budget compensation decreased in 2005 with 32%, and for 2006, they increased with 20%. During the analyzed period, debts recorded a decline of 8% in 2006, compared to 2004.
8.4
8.4.1
Financial Aspects
8.4.2
8.4.2.1
Table 8.4.1: Operating result evolution - Floreti
Operating result for the year Amounts in Thou. USD Operating revenues Sales Revenues from services Other revenues Operating costs Material expenses Third parties services
2004 347.7 226.3 119.6 1.8 395.6 35.6 -
2005 388.0 251.9 125.6 10.5 431.4 31.9 -
2006 639.4 323.7 304.9 10.8 677.5 40.1 -
rao1e 2005-01-17
SWECO INTERNATIONAL
Personnel expenses Salaries Social insurance taxes Other costs for water and sewerage Depreciation Energy cost Costs related to other activities Operating result
Source: Water Utility from Floreti
85.4 55.7 29.7 83.0 16.1 55.4 120.0 (47.8)
112.0 74.6 37.4 86.1 27.9 47.9 125.6 (43.4)
118.3 92.6 25.8 103.9 28.4 44.7 342.2 (38.1)
In 2006, approximately 20% of the operating revenues result from water supply and 31% from wastewater operations. The total operating result is negative for the entire period of analysis with an improvement tendency in 2006 as result of tariff increases. The evolution of the structure of operating revenues is presented in the following chart:
Figure 8.4.1: Structure of Sales - Floreti
Structure of Sales
250.0
200.0
Thousand USD/y
150.0 W ater W astewater 100.0
50.0
2004 2005 2006
The level of revenues increased in 2006 because the invoiced quantity had an increasing trend and as well as the tariffs. The evolution of the water losses is presented in the table below:
Table 8.4.2: Evolution of Non Revenue water 2004-2006 - Floreti
Non-revenue water Pumped water Invoiced water Losses
rao1e 2005-01-17
2004 Th. m3 570.5 221.0 -61%
2005 Th. m3 % 576.2 1% 214.2 -3% -63%
2006 Th. m3 % 594.7 3% 227.7 6% -62%
SWECO INTERNATIONAL
The level of non-revenue water is important and the utility will try to decrease the losses in the following years. One of the main purposes of the investment promoted with financial resources from The World Bank loan is to decrease the water losses. The evolution of invoiced quantities is presented in Table 8.4.3 The water consumption slightly decreased in 2005, but in 2006 the trend was increasing again mainly as result of increase of water delivered to inhabitants.
Table 8.4.3: Evolution of Invoiced quantity 2004-2006 - Floreti
Evolution of invoiced quantity Water Inhabitants Institutions and commercial companies Waste water Inhabitants Institutions and commercial companies
2004 Th. m3 221.0 143.7 77.3 197.3 69.5 127.8
2005 Th. m3 % 214.2 -3.1% 147.8 66.4 211.9 75.1 136.8 2.9% -14.1% 7.4% 8.1% 7.0%
2006 Th. m3 227.7 165.4 62.3 235.4 80.8 154.6
% 6.3% 11.9% -6.2% 11.1% 7.6% 13.0%
In the last years, the evolution of water production delivered to companies and institutions is the result of the poor economic situation of companies and public institutions. The weight of water delivered to companies and institutions is low (represents only 27% in total invoiced water). Because the level of tariff for companies and institutions is significantly higher than for domestic customers, these entities have the tendency to find water from other sources (have their own sources) and to pay only sewerage services to the utility. The delayed adjustment of tariff compared with the cost increases had a negative impact on the performances of the water utility. The water utility can not control the tariff adjustment process, which is the
rao1e 2005-01-17
SWECO INTERNATIONAL
prerogative of the Local Council. The water utility can propose tariff increases based on cost increase but the final decision is taken by Local Council. The evolution of the structure of total operating costs is presented in Figure 8.4.2. The most important cost elements are personnel costs (wages, salaries and related taxes), which represents 35.3% of operating expenditures in 2006 and energy costs, which represents about 13.3% of operating expenditure in 2006. The weight of energy costs registered a decreasing trend in the last years.
Figure 8.4.2: Structure of Operating Costs - Floreti

E nergy
42.9%
35.3% Other costs
8.5%
The salaries have increased in nominal terms every year. The increase of salaries has to be performed based on premises stipulated in the law regarding evolution of salaries in the public sector. The company has approved the last salary increase of 28.6%. This element is more or less not under the control of the water utility. The evolution of operating costs is presented in the following chart:
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 8.4.3: Evolution of operating costs - Floreti

160.0 140.0
Thousand USD/ye
120.0 100.0 80.0 60.0 40.0 20.0 E nergy P ersonnel (salaries and related taxes) O ther costs 2004 2005 2006
The evolution of operating costs highlights the imprudent policy regarding expenditures in the last years.
8.4.2.2
Table 8.4.4: The Level of Account Receivables as at December 31, 2006 - Floreti
31.12.2006 USD % 84,818 53.6% 58,475 36.9% 15,062 9.5% 158,354 100.0%
The management of the company needs to have among its priorities the increasing of the collection level. In the last years the water utility succeeded to reduce its collection period, but not very significantly. In the current conditions, it is important to maintain the level of the outstanding debt at low levels (at least to maintain this level constant) to be able to generate sufficient cash to pay the current obligations (mainly the energy bill). This is essential for a sound development. The level of short term liabilities has slightly increased in the last years. A breakdown of the short-term liabilities is presented in the following table:
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 8.4.5: Evolution of short-term liabilities (amounts in Thousand USD) - Floreti
2004 275.3 50.8 10.8 143.8 58.3 11.6
2005 303.0 56.3 17.3 165.7 55.1 8.6
2006 341.8 45.4 18.2 185.3 92.9 -
The accounts payable are represented by a liability the company has to one of its supplier, which paid for them the energy invoices. The companys officials stated that this will be solved in the future. The utility still face outstanding debts regarding liabilities to the budgets due to insufficient financial resources. The utility has a memorandum agreement valid until 2008, but it does not respect it. The aging of the liabilities to the social fund is presented in the following table:
Table 8.4.6: Aging of liabilities to social fund - Floreti
31.12.2006 USD % 21,721 11.7% 48,243 26.0% 115,358 62.2% 185,322 100.0%
Table 8.4.7: Aging of liabilities to state and local budgets - Floreti
31.12.2006 USD USD 23,954 25.8% 27,642 29.8% 41,267 44.4% 92,862 100.0%
rao1e 2005-01-17
SWECO INTERNATIONAL
8.4.2.3
Tariff analysis
Historically, tariff levels have been effectively imposes by the Ministry of Communal Services and Territorial Development. Because of the institutional restructuring and decentralization, the utility may increase the tariffs without the approval of the central authorities but with the approval of the local authorities (municipality) and ANRE. The domestic tariff level is calculated based on the total cost per cubic meter plus a profit allowance (between 5-10%). Changes would be applied following significant increases in costs, mainly electricity. The evolution of invoiced quantity, the increase of prices for energy and the increase of salaries should have been the main factors affecting the evolution of tariffs. The tariff evolution of the water tariffs for the last years is presented in Figure 8.4.4. The last tariff increase for water services was in 28th of December 2006 for companies. For individuals, the last tariff increase was performed in 1st of October 2006.
Figure 8.4.4: Water Tariff Evolution - Floreti
1.80 1.60 1.40 1.20 D estic om custom ers Instutions 0.58 0.58 0.41 0.40 0.57 0.57 0.42 0.66 0.66 0.54 C m om ercial custom ers 1.55 1.55
USD/m
1.00 0.80 0.60 0.40 0.20 2004 2005 2006 2006
rao1e 2005-01-17
The water tariff for domestic customers recoded an increase adjustment by 10%; moreover, the tariffs for public institution were increased by 22% by the Local Council, as well as the tariffs for commercial customers. In this way, the Local Council is promoting a cross-subsidization policy between the commercial company and public institutions.
SWECO INTERNATIONAL
The tariff evolution of the sewerage tariffs for the last years is presented in the following chart:
Figure 8.4.5: Sewerage Tariff Evolution - Floreti

1.80 1.60 1.40 1.20 1.12 1.12 0.94 0.94 0.92 0.92 P ublic Institutions D estic om custom ers 1.71 1.71
USD/m
1.00 0.80 0.60 0.40 0.20 0.32
0.32
0.30
0.31
2004
2005
2006
2006
In the future the water utility will have to cover also the possible debt service related to the loan from the World Bank. Briefly, the methodology for approving tariffs consists of the following steps: The utility specialists are preparing a study for tariff adjustment The study is sent to the Local Council and ANRE for approval.
According to the management team of the utility, the level of approved tariff is usually lower than their request. The management team considers that a tariff increase will solve most of the financial problems of the utility. One of the most wide spread idea about tariff increase in Moldova is to increase more of tariffs for private entities and institutions and to increase less the tariffs for inhabitants. In most of the cases this is mainly a political decision with the purpose of maintaining a lower pressure on the domestic customers.
rao1e 2005-01-17
SWECO INTERNATIONAL
This approach leads to an increase of the cross-subsidization between entities (private companies and institutions) and inhabitants. This discourages the economic development.
8.4.2.4
Even if the utility has recorded achievements in the last years, financial management is still far from the requirements of a modern utility. A lack of skills and human resources leads to limitations in the activities performed by the Finance Department. In the financial department there are working 5 employees: 2 economists, 2 accountants and 1 cashier. The Company has 9 computers working in several departments: 2 computers in accounting; 1 computer for the economist; 1 computer for the secretary; 1 computer in the technical office; 2 computers in the commercial department (clients database); 1 server; The Company is using an accounting software (CONTREAL) bought with own financial resources. The financial management is limited to good management of payments, and is unable to give effective support to the overall management decision-making process, particularly the good management of the growth potential. Without minimizing the technical and implementation problems that the utility has to face in the near future, the financial planning area is most in need of enhancement and restructuring efforts. We recommend the introduction of cost accounting by creating cost centres for the main activities (water and sewerage). There is important to find out the performances of each sector. We recommend the extensive use of computer for financial management. Accounting, billing and collection, financial forecast are just a few items which can be performed more efficient by using a
rao1e 2005-01-17
SWECO INTERNATIONAL
computer. Even if the utility has only one computer, its degree of usage is still very low. The process of financial planning does not include all the parties that should be involved with financial planning matters and has not the necessary prediction-correction role. The management team of the utility has to prepare a long-term strategy to assure the sustainable development. This analysis can be used as a starting point in preparing this strategy. Without a clear strategy for sustainable development of the activity, the utility continue to survive but with very limited potential and lower and lower performance. 8.4.3 Financial Selection Criteria By applying the criteria mentioned under section 2.4.3, the scores obtained by the water Operator from Floreti are presented in the following table:
Table 8.4.8: Scores for the Water Utility from Floreti
Historical liabilities Liabilities to Suppliers, Social Fund and State of Local Budgets Total Operating revenues Weight of Liabilities in Total Revenues Number of points Tariff adjustment Last tariff adjustment was in December 2006 In the period 2004-2007 there were 3 tariff adjustments Total Operating ratio Operating revenues Operating profit Operating revenues/operating costs Points
rao1e 2005-01-17
2006 USD 341,777 639,440 53.4% 4 Points 4 4 8 2006 USD 639,440 677,521 0.94 2 2006
Account receivables collection period
SWECO INTERNATIONAL
Historical liabilities
Trade receivables(A) Sales (B) (A/B)*365- days Points Total points
2006 USD MDL 2,044 4,251 175 2 16
The results are analyzed in the final conclusions chapter when the decision regarding the introduction of Floreti in the 10 list towns is analyzed.
8.5
8.5.1
Technical Aspects
Specific Task Objectives Related to Technical Analysis The specific tasks of this sub assignment for the Pre-Feasibility Phase were clarified together with the Client in the beginning of the assignment. The tasks agreed were as follows: To prepare water and wastewater balances for 15 target towns to describe the present situation and water and wastewater projections for the year 2013; to assess the present status and condition of present water supply and sanitation facilities in 15 target towns in order to evaluate the need for replacements and/or needed rehabilitation on short-term basis; and to prepare preliminary short-term investment program for years 20092013 for the 15 target towns in order to improve ad develop the present functional level of their water supply and sewerage services.
8.5.2
Water supply and sewerage in Floresti Water is supplied via one (1) main water supply network having length of approximately 72.5 km, which covers Floresti, Marculesti cities and Marculesti, Lunga, Varvareuca villages. Approximately 13,900 inhabitants of Floresti (and surrounding villages which are connected to the network of Floresti) are currently connected to the water supply network while 5,300 inhabitants are dependable on
rao1e 2005-01-17
SWECO INTERNATIONAL
private wells. The total number of inhabitants in city of Floresti and surrounding villages is 19,200. The only source of water supply of towns, Marculesti and of villages Lunga, Marculesti and Vrvreuca is the ground water source of Gura Cinarului, situated near the river Cinari, 8 km west of Floreti. In 1980-1990, for water intake were drilled eight (8) wells situated on a length of 3200 m, at a distance of 300 m between each other. There are only three (3) wells operated permanently. All eight (8) wells serve the main water supply network. Water supply system has six (6) underground water tanks. The only treatment process used is chlorination to underground water tanks at pumping station PS1. The chlorination is done automatically at chlorination plant with a capacity of 1 kg/h. Chlorination installation is of soviet type Moskva. Currently the water is not chlorinated as bacteriological indices correspond to the sanitary requirements. After treatment, water comes to pumping station PS1, from which is pumped to separated water distribution networks Marculesti town, Lunga, Marculesti village and Varvareuca. The total length of main sewerage network is 20.9 km. Sewerage network has three (3) pumping stations out of which one (1) is the inlet pumping station for the WWTP, which is located to the east from the town centre. In Floreti all economical agents, social buildings and multilevel apartment blocks are connected to the sewerage system, while most of individual houses are using septic tank system or dry lavatories. However, the number of septic tank users is not known. There are no sewerage systems in Marculesti town, Lunga and Marculesti village. The wastewater treatment plant was taken into operation in 1973 representing complete biological treatment process. At present the treatment plant is in use, but the main part of installations is worn out. In the following sections the water and wastewater balances and the technical status of water supply and sanitation facilities as well needed investments on preliminary level have been described in detail.
rao1e 2005-01-17
SWECO INTERNATIONAL
8.5.3
Water Supply System
8.5.3.1
Present System
Water intake consists of eight (8) deep wells, out of which one (1) is not in use while three (3) are operated non-stop and four (4) are used as reserve. Every operated deep well has a submersible Moldovan made pump, type ECV (see Table 8.5.1). Water storage consists of six (6) underground water tanks. The total capacity of permanently operated three (3) wells is 2,880 m3/day. Approximately 13,900 inhabitants out of 19,200 are currently connected to the water supply network.
Table 8.5.1: Submersible pumps used for water intake (only wells which are in operational condition are presented).
Nr of deep well No.5 No.6 No.7 No.9 No.10 No.11 No.12
Pump type ECV 10-63-110 ECV 8-40-120 ECV 8-40-120 ECV 8-40-120 ECV 10-63-110 ECV 8-40-120 ECV 10-63-110
Head (H, design), m 110 120 120 120 110 120 110
Flow (Q, design), m3/h 63 40 40 40 63 40 63
Status In use reserve Reserve Reserve In use Reserve In use
The water from wells is pumped into two underground reservoirs with capacity of 250 m3 each (500 m3 in total) located at intake pumping station PS1. Chlorination is done manually to these two reservoirs. From PS1 water is delivered to two (2) separate underground water reservoirs situated in the town centre with capacity of 2,000 m3 each (4,000 m3 in total). From these two (2) reservoirs water is supplied to the distribution network by gravity. In addition to own water use delivers Apa-Canal also water to near by villages Marculesti and Lunga. Chlorination to the underground water reservoirs at PS1 is done automatically by chlorination equipment type Moskva. At present, the quality of water from deep wells does not correspond to Moldavian Normative on Potable Water main reason being high ammonia concentration (see Table 8.5.2).
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 8.5.2: Analysed water quality provided by town of Floreti.
Parameter Colour Odour Taste pH Hardness Dry residuals Nitrites Chlorides Sulphates Copper Fluorine Ammonia Coli form
Unit grade grade grade pH Mol/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l bact/l
Requirement 20 2 2 9 7 1,000 45 350 500 1.0 1.2 2.0 3
Actual 3.1 2 2 7.05 6.4 1,002 0.003 76 259.5 0.02 0.38 2.8 3
The pumping station PS1 equipped with four (4) TNS-180/85 pump with capacity of 180 m3/h each and is operated 24 hours per day. Pumps are running depending on the water level in intake reservoirs. PS2 is also operated 24 h/day and is equipped with two (2) centrifugal pumps with capacity of 320 m3/h each. Second pumping station PS2 on str. M. Viteazul is operated for pumping water into the distribution network of Floresti in the pressure zone. It is a reserve station and operates only in case when the pumping station on Independenei street is stopped. At the moment the pumps are stopped. The pumping station is equipped with two pumps of type: CD-320/50 with a capacity of Q=320 m3/h; H=50m, motor N=55 KW, n=3,000 rpm; and two pumps of type KM-100/65 with a capacity of Q=100 m3/h; H=50m, motor N=32 KW, n=3000 rpm. Water distribution network consists of steel, cast iron and polyethylene pipes. The range of diameters is from 50 mm to 200 mm. The total length of network is 23 km. Different lengths of used pipeline materials and age of the network have been presented in Table 8.5.3.
Table 8.5.3: Water Supply Network in town of Floreti.
rao1e 2005-01-17
SWECO INTERNATIONAL
DN Steel 100-150 200-300 Sub-total Cast iron 50-100 150-200 250-300 Sub-total Polyethylene 63-110 160-200 Sub-total Total
< 10 years, km 0.7 0.7
10-20 years, km 2.7 10.2 12.9 9.3 2.3 2.0 13.6
20-30 years, km 6.7 1.6 8.3 2.8 4.0 2.0 8.8
30-40 years, km
40-50 years, km
Total km
21.9 0.4 1.1 0.3 1.8
0.5 0.5
24.7
2.8 4.0 6.8
6.8 72.5
8.5.3.2
In General, centrifugal pumps and other mechanical equipment are in a very poor condition. Most of the mechanical parts are worn out and old pumps are working at a decreased efficiency rate. All wells have sanitary protection zones (according to the design made by the Design Institute Moldcomunproiect in 1989, no. 1-89-62) consisting of three sub-zones, as follows: - Strict sanitary protection zone, which represents the land around the well with radius of 50 m; - Sanitary protection zones of second and third level with regime of limited use of land, and is used according to the sanitary and ecological requirements. Second zone R=138 m, third zone R=341 m, total L=5280 m. Each well is equipped with a water distribution manhole (valves, manometers, water-meters and taps for chemical-bacteriological analysis of water) situated in buildings with metal door and lock. The outlet of the well is at a height of 0.5 m above ground and is hermetically sealed. In the building also is installed the electrical panel and automation for submersible pump. At present, the fencings of the strict protection area are deteriorated. It is needed 120 x 8 = 960 m of the reinforced concrete fencing for reparation.
rao1e 2005-01-17
SWECO INTERNATIONAL
Existing chlorination plant is in a poor condition. Currently the water is not chlorinated as the bacteriological indices correspond to the sanitary requirements. Centrifugal pumps and other mechanical equipment at PS1 and PS2 are in a very poor condition. The age of pumps is over 20 years and they need to be substituted by new ones. During the past 10 years the water distribution network has partially been renovated and some 6.8 kilometres of old cast iron and steel pipelines have been replaced with new polyethylene pipelines. However, most of the network is still made of steel being older than 10 years and only 6.8 km of the network are covered by polyethylene pipelines. Apa-Canal has reported several problems with old pipelines. Reported problems have been presented in the 8.5.4 and Table 8.5.5 The highest losses (44% of total losses) represents the leaks from all network in town as a result of bursts. Reported (by Floreti Apa-Canal) unaccounted water losses in 2006 were 367,000 m3. The losses from the individual sector (26% of total losses) represents the leaks from network, illegal connections and errors of meters of low quality. For reduction of these losses it is necessary to rehabilitate the network, especially those of steel and cast iron and to substitute the meters of Class A and B with ones of Class C with volumetric principle of work.
Table 8.5.4: Reported problems within Floreti water distribution pipelines.
DN 50-100 150-200 300 Total
Burst
Problem in pipelines Fissure Flute crack 11 125 10 3 38 7 10 1
Total 146 48 11 205
Table 8.5.5: Reported problems within Floreti water valves.
rao1e 2005-01-17
DN 50-100 150-200 300 Total
At flange 28 3
At valve 32 12 10
Total 60 15 10 85
SWECO INTERNATIONAL
Together with renovation of the existing network the main focus shall be paid in extension of network in order to provide water supply for more inhabitants.
8.5.3.3
The water in Floreti is supplied 24 hours/day. Water pumping at three (3) operated wells is automated and depends on the level of water in two storage reservoirs, 2 x 250 m3. Work of pumping station PS1 depends on the water use in the aforementioned localities. Permanently in use are only the wells no. 1461, no. 4277 and no. 1560. The rest are conserved and are Standby. Well no. 4182 due to the lack of water is not in use. The pumping station PS1 operates for pumping water from reservoirs 2x250 m3 in automatic mode (depending on the water level in reservoirs). According to the current necessities (operation of maximum 3 wells per day depending on the consumers demand), only one pump is in operation, which operates according to the parameters H=65 m, Q=220 m3/h for reservoir of 2000m3 at Independenei street (town of Floresti) and H=75 m, Q=185 m3/h for reservoir of 2,000 m3 at M. Viteazul street (town of Floresti). The water storage tanks in Mrculeti are supplied according to a time schedule in dependence of the consumers demand and fire fighting. First PS2 on Independentei Street is operated permanently 24 h/day. As during the day the consumption in the town vary from 320 m3/h to 10 m3/h, the pump is equipped with a frequency converter Danfoss VLT6000HVAC which maintains the constant pressure H=26 m (the necessary pressure for the peak point of the multilevel houses) and the flow-rate of water necessary in any moment by minimizing or increasing of motor revolutions automatically. Installation of this equipment allowed reducing the energy consumption of the pump by 28% and the number of bursts in distribution network. The average specific consumption of energy by the pump is currently 0.23 kWt/m3, which will decrease once the network will be extended in the gravity zone.
rao1e 2005-01-17
SWECO INTERNATIONAL
Second pumping station PS2 on M. Viteazul Street is operated for pumping water into the distribution network of Floresti in the pressure zone. It is a reserve station and operates only in case when the pumping station on Independenei Street is stopped. At the moment the pumps are stopped. The operator of the station regulates the flow of the water which passes through the station from 2,000 m3 tank into the gravity zone (lower part of the town). The only water treatment process used is chlorination to underground water tanks at PS1. Water pumped to the distribution from used deep wells contains considerably high concentration of ammonia. Still, it could be necessary to study alternatives to treat water in order to take ammonia out or to find substitutive water sources. However, the fact is that better quality ground water sources could most probably not be found and only actions to be considered could be implementation of proper treatment process or finding a proper surface water source which could require a water treatment plant and a several kilometres long pipeline thus there are no available surface water sources near . In addition to above mentioned, there are plans to connect town of Floresti to town of Balti by new water pipeline. This pipeline would connect Floresti to the water pipeline from town of Soroca. The investment is planned to be financed by the Government of Moldova. However, during the time of this study any financing decisions were not made. Currently the water supply network is divided into two (2) pressure zones: - lower zone by gravity for consumers situated in the lower part of the town; - pressure zone - multilevel houses and consumers from the upper part of the town. In order to meter the water consumption at the Gura Cinarului source, at the wells are installed flow-meters BT100 3 pcs, BT 80- 4 pcs. At the outlet of the pumping station PS1 Gura Cinari, ultrasonic flow-meters are installed on both two mains, d=300mm. At the inlet of the storage tanks - BT-150 4 pcs. At the outlet of the first PS2 - BT150 4 pcs. On the distribution network are installed flow-meters with D=40-100 mm for every separate district. At every multilevel house connection are installed meters of D=20-40 mm (100%). All business consumers are equipped with flow-meters at water connections (100%). The rate of population with installed meters is 99%. Currently 5,501 meters are installed, of which 4,993
rao1e 2005-01-17
SWECO INTERNATIONAL
meters of Class A and B and 508 meters of Class C. The meters of class A and B are of a low sensibility and after a water flow of approximately 70m3 begin to register errors. Thus, the water losses supplied to the multilevel houses as a result of sensibility is 28.3%. According to the viewpoint of the utility, resolving of this problem could be made by substitution of the old meters with those of class C. The efficiency for pumping cannot be calculated because the available data presented by Apa-Canal are not sufficient. Anyway, taking into consideration the fact, that all pumps are Moldovan-made or of soviet type, the efficiencies are very low. The energy consumption of water supply system is presented in Table 8.5.6.
Table 8.5.6: Energy consumption for water supply system, 2006
Parameter Well Well 10 Well 12 Well 6, 7, 9 and 11 Pumping station PS1 First pumping station PS2 Second Pumping station PS2
Unit kWh kWh kWh kWh kWh kWh kWh
Value 92,000 104,000 101,000 NA 229,000 91,000 2,600
The total energy consumption of water supply system in 2006 was 647,000 kWh. 8.5.4 Sewerage System
8.5.4.1
Present System
The main sewerage network having length of 20.9 km is made of asbestos, ceramics, steel and cast iron pipelines. Network consist three (3) pumping stations out of which one (1) is the inlet pumping station for the WWTP, one (1) is used to pump sewerage from the village of Marculesti to the district pumping station, and one (1) is a district pumping station, which pumps the wastewater from Marculesti town and Marculesti village to the inlet pumping station. WWTP is located to the east from the town centre.
rao1e 2005-01-17
SWECO INTERNATIONAL
The wastewater is collected from all industrial entities, schools, kindergartens and other organizations and multilevel houses. Most of individual houses are not connected to the sewer network due to the lack of the network in this district. In the town of Marculesti and villages Lunga and Marculesti there are no sewerage networks. Local wastewater treatment plants at schools and kindergartens are not operated. The biological treatment plant was designed by Moldhidrostroi in 1973 (no. 9844) with a capacity of 5.3 thousand m3/day and inlet concentrations as follows: - SS 630 mg/l - BOD5 372 mg/l Wastewater treatment plant includes: - Grit removal (4 units); - Primary sedimentation combined with primary sludge fermentations tanks (4 units); - Aeration tanks (5 units) and secondary clarification (5 units); - Sludge drying bed; - Biological ponds for effluent wastewater (3 units); and - Chlorination plant. At present the whole biological treatment process is effectuated. The discharge of the treated wastewater is made into the river Raut in the East part of the town.
8.5.4.2
The main sewerage network is from the beginning of 1980s and has not been renovated during past 30 years. The main material used is asbestos. Description of the sewerage network has been presented in the Table 8.5.7.
Diameter, (mm)
Up to 10 years (km)
Up to 20 years (km)
Up to 30 years (km) 1.2 0.2
Up to 40 years (km)
TOTAL (km)
Gravity network: Steel

rao1e 2005-01-17
150-200 300
235
SWECO INTERNATIONAL
Diameter, (mm) Sub-total
Up to 10 years (km)
Up to 20 years (km)
Up to 30 years (km) 1.4
Up to 40 years (km)
TOTAL (km) 1.4
Gravity network: Asbestos 200-300 400 Sub-total Gravity network: Ceramics 150-200 300-400 Sub-total Pressure network: Steel 150 300 Sub-total Pressure network: Cast iron 300 Sub-total TOTAL 1.7 1.7 1.7 20.9 1.5 1.5 3.0 2.3 2.9 5.2 2.8 1.7 4.5 4.5 1.8 1.8 10.0 2.3 2.3 0.5 0.5 1.0 3.3
The existing sewerage network (excluding pumping stations) could be considered to be in reasonable good condition. However, within this study any conditional analysis has not been carried out and it could only be estimated that at least proper flushing of pipelines and emptying of manholes will be needed. Still, the sewerage network covers only small part of the population. In order to provide proper sanitation services the first priority regarding sewerage system would be enlargement of the network to cover more water consumers. There are problems with inside sewerage network in the multilevel houses. Many houses need renovation of the sewerage system. In General, all mechanical equipment within three (3) existing sewerage pumping stations are in a very poor condition. Most of the mechanical parts are worn out and old pumps, valves and pipelines are at the end of their operational lifetime. In addition to that there is no adequate monitoring for operation.
rao1e 2005-01-17
SWECO INTERNATIONAL
Also, existing Wastewater Treatment Plant is at the end of its operational lifetime. Taken into consideration the condition of existing structures and machineries and insufficient process technology it could be recommended that the whole treatment plant will be replaced with new modern and more compact WWTP taken into account current and future wastewater flows and loads. For new WWTP there is a possibility to use area reservation next to the existing plant. It shall be noted that within this study only visible conditional analysis were carried out and proper analysis of existing structures would be needed during next project phase.
8.5.4.3
Network consist three (3) pumping stations out of which one (1) is the inlet pumping station for the WWTP, one (1) is used to pump sewerage from the village of Marculesti to the district pumping station, and one (1) is a district pumping station, which pumps the wastewater from Marculesti town and Marculesti village to the inlet pumping station. WWTP is located to the east from the town centre. All pumping stations work in automatic mode and pump wastewater when the reception reservoirs are full. The wastewater volume received by WWTP in 2006 was 366,000 m3, including: - wastewater from private households, 81,000 m3; and - wastewater from business technological repairs, 285,000 m3. The treatment of wastewater is a complete biological process. Technological equipment at aeration tanks and sedimentation tanks is worn out, but it is still in operation. The effluent quality in 2006 is presented in the Table 8.5.8.
Parameter SS BOD5 Ammonia
Unit mg/l mg/l mg/l
rao1e 2005-01-17
Inlet After concentration treatment 322.0 14.3 133.0 11.0 32.0 3.5
Requirement 5 3.0 0.5
SWECO INTERNATIONAL
Thus the lack of proper treatment facilities the wastewater quality does not meet the requirements set by Moldovan authorities. However, taken into consideration European standards, the treatment result is reasonable good and reported SS reduction being 96 %, BOD5 reduction being 91 % and even ammonia reduction being 89 %. Test result indicates that the used method for taking samples from the effluent wastewater is most probably insufficient and real reductions could be on lower level than reported. The efficiency for pumping cannot be calculated because the available data presented by Apa-Canal are not sufficient. Anyway, taking into consideration the fact that all the pumps are very old and at the end of their operational life time, the efficiencies could be considered to be very low. Total energy consumption for sewerage system in 2006 in was 214,000 kWh. 8.5.5 Prioritising of needed Investments for years 20092013
8.5.5.1 Preliminary Water and Wastewater Projections for 2013 In order to prepare preliminary water demand and wastewater
projections the water and wastewater flows were analyzed for the last three (3) years (20042006). Preliminary water demand and wastewater projections for the year 2013 are based on general assumptions as follows: - Some of the near by villages will be connected to water supply network of Floresti; - The connection rate to the water supply network is 90 %; - Per capita consumption litres/capita/day; and in Floresti in 2013 is 150
- The connection rate to the sewerage system is 50 %. In addition to above mentioned, some assumption related to rehabilitation of the water supply network were made as follows: - Due repairing and maintenance work and installation of new pipelines for new housing areas the amount of leakages from
rao1e 2005-01-17
SWECO INTERNATIONAL
the water supply network have estimated to decrease some 35 %; - Due installation of new in-house flow meters and due better accounting system amount of unaccounted water is estimated to decrease some 25 % (billed water demand per capita will increase); and - Due better in-house flow measurement and possible increase in water tariffs per capita consumption has estimated to decrease some 20 %. Preliminary water and wastewater flow projections for Floresti are summarised below in Table 8.5.9.
Table 8.5.9. Water and wastewater projections for year 2013.
Floresti Population connected to the Water Supply network Population connected to the Sewerage network Water pumped to the Distribution Non-Revenue Water Average total flow to WWTP 8.5.5.2 Needed Investments
Year 2006 Value Unit

13900 50002 1630 117 62 % 73 644 129 capita capita m3/d l/cap/d % l/cap/d m3/d l/cap/d
Year 2013 Value Unit

17000 8000 2550 150 33 % 49 1000 120 capita capita m3/d l/cap/d % l/cap/d m3/d l/cap/d
Investment need estimations are done for the period of years 20072013 in order to secure sufficient operation of water supply and sanitation systems and to provide water supply and wastewater treatment for more inhabitants in Floresti. The new water sources and/or pipeline to connect city of Floresti by new water pipeline to city of Balti have not been taken into consideration as short term investment needs. Short-term investments needed for water supply system are listed below, and serves as a basis for the proposed investment packages:
rao1e 2005-01-17
Estimation
SWECO INTERNATIONAL
- Rehabilitation of network (> 40 km); - Continuing of installation of in-house water meters; - Construction of new network including water meters for new consumers for at least 3,000 inhabitants (> 15 km); - Implementation of new chlorination plant and connection of used reservoirs to this plant; - Renovation of pumping stations; - Construction of protection areas for water intakes, replacement of existing pumps; and - Construction of treatment plant to eliminate ammonia. In general, both sewerage network and WWTP require urgent rehabilitation and reconstruction works to enable reliable operation of the network and to fulfil the treatment requirements set by Moldovan authorities. The investments needed for sewerage system are listed below, and serves as basis for the proposed investment packages: - Flushing of existing sewerage network; - Enlargement of the network to cover at least 3,000 new inhabitants; - Rehabilitation of 3.8 km of sewerage network; - Reorganising the existing septic tank emptying system including supply of proper vehicle for this purpose; - Renovation of district and WWTP inlet pumping stations; and - Reconstruction of new WWTP for capacity of 1,000 m3/day (1st stage) with enlargement possibility for capacity of 2,000 m3/day in total (2nd stage).
8.5.5.3
Preliminary cost estimations for proposed investments packages within water supply and sanitation services are only preliminary estimations and will only be used as help in preparation of suitable investment packages in Feasibility Phase of the project. Proposed investment packages have been prepared so that there are two different packages; 1st investment package for works which shall be carried out in the very near future (within 1-2 years) and 2nd investment package for other works which must be implemented in order to secure the water and sanitation operations in long term:
rao1e 2005-01-17
SWECO INTERNATIONAL
1st Investment Package: 1.2 million USD in total Renovation of existing water intake system including new treatment equipment for chlorination and ammonia removal, 0.5 million USD; Reconstruction of fine screening and grit removal and replacement of mechanical equipment within aeration at WWTP, 0.6 million USD; and Purchasing one (1) vehicle for flushing sewerage network, 0.1 million USD. 2nd Investment Package, 8.5 million USD in total Rehabilitation and extension of sewerage network including renovation of pumping stations, 2.5 million USD; and Rehabilitation and extension of water supply network (including pumping stations), 6.0 million USD.
rao1e 2005-01-17
SWECO INTERNATIONAL
9
9.1
Leova
General
Leova town is located on the bank of river Prut, at a distance of some 100 km south from the capital of Republic of Moldova.
Figure 9.1.1: Location of Leova
rao1e 2005-01-17
SWECO INTERNATIONAL
The official number of inhabitants is slightly over 11000. According to the Deputy Mayor the real number is, despite considerable emigration to other countries, estimated to be around 12600, as there is a lot of not registered immigration to Leova from the surrounding rural areas. Leova has a Town Development Plan for 2005 2015. It stipulates for 2005-2006 that water and wastewater systems should be rehabilitated and for 2005 2007 construction of a rainwater collection system.
9.2
9.2.1
History The first water services in Leova date back to year 1967. The water and wastewater services as well as all other technical municipal services were operated as a department in the town administration. In year 2000 a separate Municipal Enterprise Apa-Canal was established, but already 2001 all technical municipal services except heating were gather again into one Municipal Enterprise. The reason was financial problems for a separate water and sewage company.
9.2.2
The Owner. How the Owner Governs the Utility The Municipality is the only owner of the service utility. The utility consists of one of the divisions of the Town Administration and is called Municipal Enterprise Division for Production of Communal Housing Management. The Town Council appoints the Director of the utility, and he reports to the Deputy Mayor. The present Director came from the construction business to the municipal water company in 1998. He is fully entitled to take any decision in the daily operation of the utility. Tariffs and consumption norms have to be approved by the Town Council. Other Mayor questions have to pass a Steering Committee before approval by the Town Council.
9.2.3
Legal Aspects The enterprise has its own statutes but no separate service agreement with its owner describing for instance the level of service to the customers.
rao1e 2005-01-17
SWECO INTERNATIONAL
The Municipality is the owner of all the assets including both water and wastewater facilities. The enterprise operates these facilities. The enterprise has no local regulations to follow in addition to the Moldavian state regulatory framework. 9.2.4 Organization and Management The organization chart for the enterprise is presented below. It includes the whole enterprise, thus also other activities than water and wastewater services.
Manager
Chief Accountant
Engineer economist
Chief of WSS Department
Hotel
Construction and reparation engineer
Territory developm. and sanitation engineer
Operating engineer
Accountant
Accountantcashier, HR manager
Water supply engineer
Inspectors (6)
Sewerage engineer
Workers (22)
Workers (16)
Workers (8)
Workers (28)
Engineerchemist
Workers (18)
Engineerchemist
Figure 9.2.1: Organization of Leova Municipal Enterprise Division for Production of Communal Housing Management
In addition to common services such as e.g. water, sewage, street cleaning, solid waste and housing, the company has also sometimes some minor industrial production of for instance doors and windows. The company has also a small hotel business consisting of three rooms in the office building. The utility has a management team consisting of the director, the chief engineer, the chief accountant and a number of other persons, all together approximately 9 persons. This team has meetings each Monday. They have no fixed agenda and do not write any minutes of meetings. The heads of departments meet also every morning at
rao1e 2005-01-17
SWECO INTERNATIONAL
07.30 08.00 for daily reports and orders. This is the main form of internal information existing in the utility. The enterprise has bought mobile phones to each leader in order to facilitate the daily work. The enterprise has an action for development of the utility. The plan was prepared in 2004 by US AID and has been helpful for the development. The enterprise has two computers, none of them used due to lack of qualified personnel. For improved management and internal information as well as more efficient accounting the utility needs both modern hardware and software as well as qualified personnel. Principals of accountable management or management by objective are not used. The heads of departments have to follow a given budget but have no incentives and no formal rights supporting their work. 9.2.5 Staff. Efficiency and training needs The total number of personnel in the enterprise is 117. Of these 57 persons are working with the water and wastewater services. The number of household customers connected to water services is 10024 plus 41 companies and budget organizations. The productivity in the water services is therefore 177 customers per employee. There is no information on the number of connections. The number of household customers connected to the wastewater services is 5334 the companies and budget organizations to be added. The productivity based on that figure is 94 customers per employee. Most of the heads of departments, engineers and education in the right area for their work, many from universities and colleges. The utility has no training of the personnel, but expressed a need technical and financial personnel. specialists have an of them graduated elaborated plan for for training of both
rao1e 2005-01-17
From the point of view availability of personnel and its experience in organization of projects, procurement etc, the interviewed director and expressed that the utility has rather good capacity. However, they do not have enough experience or capacity for major investment projects and would therefore need external support of different kinds of specialists.
SWECO INTERNATIONAL
The average salary in the Municipal Enterprise is around 1200 lei per month. (The average salary for personnel working with water and wastewater services is not known.) There are few possibilities to get better salaries in the town, so this level seems to be enough high for attracting and keeping important staff. (The minimum wage level is only 700 lei per month.) The enterprise has a great need for training in many fields, e.g. in computerized accounting and billing etc. 9.2.6 Estimation of Consumption. Billing and Collection 75% of the villas and other individual houses have individual meters. Block meters are installed in 57% of the apartment buildings. Consumption norms are used for the other customers. Three meter readers from the water and wastewater service department of the Municipal Enterprise Division for Production of Communal Housing Management read the meters monthly. The enterprise tried in year 2001 to give their meter readers a bonus based on the result of collection (including also debts). The collection rate was then increased by 7-10%. The meter readers distribute the bills to be paid during the next month when reading the meters. The customers can pay the office of the utility and in three banks. In 2006 the collection rate was 97% for population and 98% for budget organizations. It is easier to disconnect companies than private households, and therefore also easier to get payment from the commercial customers not paying in due time. The collection rate is said to slowly improve. 9.2.7 Relations to customers and other stakeholders There is no internal or external quality programme defining for instance issues such as quality of water and sewage service, quality of public relations, water demand management and environmental questions. 9.2.8 Consultants Comments As the company is involved in more activities than water and wastewater services, it is important to have clear cost centres for each activity. This is important in order to correctly define the needs for tariffs and follow up costs, profit and different kinds of efficiency
rao1e 2005-01-17
SWECO INTERNATIONAL
and financial ratios. This makes it also possible to introduce efficient internal and external benchmarking. The action plan mentioned under 9.2.4 and prepared 2004 is good. It should probably be yearly updated and possibly changed to a complete business plan including an action plan. The rate of meters can be improved, but the collection rate is good. The staff efficiency, 177 customers per employee, is better than for the average utility visited, but may certainly be further improved. The formal management team is good. The IT situation must be improved. Further comments, see section 15.
9.3
9.3.1
Social environment in Leova
9.3.1.1
Population
Number of population for Leova town as at 1st of January 2007 is the following:

(Thou.) 11.2 11.2 11.2
9.3.1.2
Education system is formed of 2 preschooler institutions with a capacity of 140 pupils each, 3 schools having 1,590 pupils, a high
rao1e 2005-01-17
SWECO INTERNATIONAL
school with 280 students and a polyvalent school, preparing specialists in agriculture and light industry. Health protection is ensured by 10 medical institutions, including: a hospital, a clinic, an emergency station and 7 pharmacies. 83 doctors and 291 assistants are working in this sector.
9.3.1.3

Leova 2004 2005 1,103.1 1,318.7 653.4 756.0 491.4 325.3 291.1 192.7 568.6 383.4 326.0 219.8
Estimation of Household Revenues Average nominal monthly salary - National level Average nominal monthly salary - Leova Raion Disposable household income (national average per household member) Average monthly pension (national level) Average household disposable income in the county (per member) Average monthly pension at county level Number of persons in household Average household (no of persons) Pensioner household (no of persons) Average household disposable income in the county (per household) Average monthly pensioner household revenues at county level (per household) Lei Lei Lei Lei Lei Lei
No. No. Lei Lei
3.0 1.8 873.2 346.8
3.0 1.8 977.9 395.6
. 9.3.2 Economic environment in Leova
9.3.2.1
Natural resources
Leova has 4,319 ha, out of which 2,322 ha (53%) have agricultural purpose. From the total fields with agricultural destination, 1,571 ha are arable fields, 519 ha- fields and 234, 9 ha are representing multi annual plantations. The town area represents 563 ha.
rao1e 2005-01-17
SWECO INTERNATIONAL
9.3.2.2
The public road network has a length of 43 km, out of which 25% is asphalted.
9.3.2.3
Economy
In Leova town are registered 1,234 economic agents, out of which 1,100 are enterprises are created by individuals. The surface of 1,570 ha of agricultural fields is exploited by 438 agricultural households.
9.3.2.4
Industry
Volume of industrial production in Leova Raion, compared to the total industrial production in Republic of Moldova, is presented in the following table:
Table 9.3.3: Volume of Industrial Production Evolution Leova Raion
Volume of industrial production in 2006 Total out of which Leova
Total production on Republic of Moldova increased with 26% during the period 2004-2006. For Leova Raion, the production in 2006 remained approximately the same as the one registered in 2004, after a significant fall in 2005. Financial situation of Commercial Companies in Leova Raion, compared to the total financial situation of Republic of Moldova, is presented in Table 9.3.4. As can be observed from the table, the number of profitable enterprises is increasing at national level, but the percentage of profitable enterprises in total reporting enterprises remains approximately the same (46%).
rao1e 2005-01-17
SWECO INTERNATIONAL
Average number of employees at national level kept a stable trend. In Leova Raion, during the analyzed period, the average number of employees registered a decrease of 26%. Financial result before tax recorded a negative value in 2005. For 2006, financial result had a value of 3 mil Lei, 2.5 times larger than the result registered in 2004.
Jan.-Sept. 2004 Total Leova

29423 11289 13906 572786 2790 53031 19140 61291 96 30 62 3635 1.2 77.2 17.9 124.8

31870 12380 14893 570143 3424 66870 22717 68420 104 39 55 3116 -0.2 92.1 16.3 128.3

34700 13155 16532 569698 3689 79052 26867 81804 109 39 60 2693 3 107.2 25.3 140.1
Sales revenues increased in 2005 (28% compared to 2004) and continued to increase in 2006 (16% compared to 2005). Receivables related to commercial invoices and budget compensation recorded a stable evolution in 2004 and 2006 of approximately 17 mil Lei and increased significantly in 2006 with 55%. During the analyzed period, debts recorded a relative stable evolution, increasing with 12% in 2006.
9.4
9.4.1
Financial Aspects
rao1e 2005-01-17
SWECO INTERNATIONAL
9.4.2
9.4.2.1
Table 9.4.1: Operating result evolution - Leova
Source: Water Utility from Leova
2004 143.1 132.1 11.1 143.2 143.2 (0.1)
2005 160.9 147.6 13.4 169.7 169.7 (8.8)
2006 189.1 92.1 84.2 12.8 186.0 12.4 36.2 28.3 7.9 15.1 7.7 28.5 86.1 3.1
In 2006, approximately 48% of the operating revenues result from sales and 44% from services. The total operating result is negative for 2004 and 2005 with an improvement tendency in 2006. The evolution of the structure of operating revenues is presented in the following chart:
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 9.4.1: Structure of Sales - Leova

Structure of Sales
90.0 80.0 70.0
Thousand USD/y
60.0 50.0 40.0 30.0 20.0 10.0 2006 W ater W astewater O ther activities
As can be observed from the table above, other activities are bringing more revenues than water and wastewater activity. The evolution of the water losses is presented in the table below:
Table 9.4.2: The Evolution of Non Revenue water 2004-2006 - Leova
2004 Th. m3 198.9 114.7 -42%
2005 Th. m3 % 159.9 -20% 92.8 -19% -42%
2006 Th. m3 195.3 101.3 -48%
% 22% 9%
Table 9.4.3: The Evolution of Invoiced quantity 2004-2006 - Leova
rao1e 2005-01-17
2004 Th. m3 114.7 105.4 9.3 31.9 26.1 5.8
2005
2006 % 9.2% 4.1% 41.3% 6.6% -8.8% 52.7%
Th. m3 % Th. m3 92.8 -19.1% 101.3 80.2 -23.9% 83.5 12.6 35.5% 17.8 36.3 27.2 9.1 13.8% 4.2% 56.9% 38.7 24.8 13.9
SWECO INTERNATIONAL
In the last year, the evolution of water and wastewater was positive for private companies and institutions, recording a considerably increase in 2005 and 2006, due to the improvement of local business environment. The evolution may be positive for industry but the weight of water delivered to companies and institutions is low (17.57%). The level of metering is 70% but for 2005 and 2006, this level is increasing every day. Because the level of tariff for companies and institutions is significantly higher than for domestic customers, these entities have the tendency to find water from other sources (have their own sources) and to pay only sewerage services to the utility. The delayed adjustment of tariff compared with the cost increases had a negative impact on the performances of the water utility. The water utility can not control the tariff adjustment process, which is the prerogative of the Local Council. The water utility can propose tariff increases based on cost increase but the final decision is taken by Local Council. The evolution of the structure of total operating costs is presented in the following chart:
Figure 9.4.2: The Structure of Operating Costs - Leova
27.5%
28.6%
E nergy
7.7% 36.2%
O ther costs
The most important cost elements are personnel costs (wages, salaries and related taxes), which represents 36.2% of operating expenditures in 2006 and other costs, which represents about 27.5% close to the percentage registered by energy costs which are 26.6% of operating expenditure in 2006.
rao1e 2005-01-17
SWECO INTERNATIONAL
9.4.2.2
Table 9.4.4: The Level of Account Receivables from Commercial customers as at December 31, 2006 - Leova
31.12.2006 USD % 7,380 31.9% 3,770 16.3% 11,954 51.7% 23,103 100.0%
Main clients of the company are the budgetary institutions like hospital, town hall and kinder gardens. A breakdown of the account receivables from domestic customers is shown in the following table:
Table 9.4.5: The Level of Account Receivables from domestic customers as at December 31, 2006 - Leova
31.12.2006 USD % 5,092 6.0% 16,506 19.4% 63,636 74.7% 85,234 100.0%
The management of the company needs to have among its priorities the increasing of the collection level. In the last years the water utility succeeded to maintain its collection ratio to high levels. In the current conditions, it is important to maintain the level of the outstanding debt at low levels (at least to maintain this level constant) to be able to generate sufficient cash to pay the current obligations (mainly the energy bill). This is essential for a sound development. The level of short term liabilities has increased in 2005 and decreased on 2006. The actual management of the utility has succeeded to pay some of the current liabilities generated in the last year but the total level below the level of account receivables. A breakdown of the short-term liabilities is presented in the following table:
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 9.4.6: Evolution of short-term liabilities (amounts in Thousand USD) - Leova
2004 45.1 3.7 3.9 32.0 4.0 1.6
2005 54.9 2.1 5.2 44.1 1.4 2.1
2006 35.9 1.8 6.2 24.6 1.9 1.5
Table 9.4.7: Aging of liabilities to social fund - Leova
31.12.2006 USD % 0.0% 7,102 28.9% 17,480 71.1% 24,582 100.0%
Table 9.4.8: Aging of liabilities to state and local budgets - Leova
31.12.2006 USD % 1,923 100.0% 0.0% 0.0% 1,923 100.0%
The current situation of the fixed assets is rather poor. The utility did not have resources in the last years for major repairs and investments. The need for performing the investment is high. If no major investments will be performed in the following years, the operating cost will increases and will affect the capability of the utility to deliver water to the town.
9.4.2.3
rao1e 2005-01-17
Tariff analysis
Historically, tariff levels have been effectively imposes by the Ministry of Communal Services and Territorial Development. Because of the
SWECO INTERNATIONAL
institutional restructuring and decentralization, the utility may increase the tariffs without the approval of the central authorities but with the approval of the local authorities (municipality) and ANRE. The domestic tariff level is calculated based on the total cost per cubic meter plus a profit allowance (between 5-10%). Changes would be applied following significant increases in costs, mainly electricity. The evolution of invoiced quantity, the increase of prices for energy and the increase of salaries should have been the main factors affecting the evolution of tariffs. The tariff evolution of the water tariffs for the last years is presented in the following chart:
Figure 9.4.3: Water Tariff Evolution - Leova
2.00 1.80 1.60 1.40 D estic om custom ers Instutions 1.84 1.84
1.80
1.80
1.72
1.72
USD/m
1.20 1.00 0.80 0.60 0.40 0.20 2004 2005 2006 0.41 0.40 0.38
The last tariff increase for water services was in November 2003. Since then, the tariff remained the same as the Local Council did not approve other tariff adjustments. Evolution presented in the table above is slightly decreasing to the depreciation of the local currency. The tariff evolution of the wastewater tariffs for the last years is presented in the following chart:
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 9.4.4: Sewerage Tariff Evolution - Leova

1.80 1.60 1.40 1.20 1.67 1.67
1.63
1.63
1.56
1.56
D estic om custom ers
USD/m
1.00 0.80 0.60 0.40 0.20 2004 2005 2006 0.46 0.45 0.43 C m om ercial custom ers P ublic Institutions
For the future the utility should consider the possibility and to take all the necessary actions to adjust the tariff more often to avoid the negative effects of the cost increases due to the inflation. In the future the water utility will have to cover also the possible debt service related to the loan from the World Bank. Briefly, the methodology for approving tariffs consists of the following steps: The utility specialists are preparing a study for tariff adjustment The study is sent to the Local Council for approval.
According to the management team of the utility, the level of approved tariff is usually lower than their request. The management team wishes to request a tariff increase after elections. The management team considers that a tariff increase will solve most of the financial problems of the utility. One of the most wide spread idea about tariff increase in Moldova is to increase more of tariffs for private entities and institutions and to increase less the tariffs for inhabitants. In most of the cases this is mainly a political decision with the purpose of maintaining a lower pressure on the domestic customers. This approach leads to an increase of the cross-subsidization between entities (private companies and institutions) and inhabitants. This discourages the economic development.
rao1e 2005-01-17
SWECO INTERNATIONAL
9.4.2.4
Even if the utility has recorded achievements in the last years, financial management is still far from the requirements of a modern utility. A lack of skills and human resources leads to limitations in the activities performed by the Finance Department. The accounting department consists of 1 chief accountant, 1 accountant, and 1 cashier. Only one invoice is sent for all services provided. Invoices are paid at companys headquarters and 3 banks. Only the wages are calculated using a computer. Accounting is manually kept. The company bought an accounting program but did not implemented yet. The company has only 2 computers. The financial management is limited to good management of payments, and is unable to give effective support to the overall management decision-making process, particularly the good management of the growth potential. Without minimizing the technical and implementation problems that the utility has to face in the near future, the financial planning area is most in need of enhancement and restructuring efforts. We recommend the introduction of cost accounting by creating cost centres for the main activities (water and sewerage). There is important to find out the performances of each sector. We recommend the extensive use of computer for financial management. Accounting, billing and collection, financial forecast are just a few items which can be performed more efficient by using a computer. Even if the utility has only one computer, its degree of usage is still very low. The process of financial planning does not include all the parties that should be involved with financial planning matters and has not the necessary prediction-correction role. The management team of the utility has to prepare a long-term strategy to assure the sustainable development. This analysis can be used as a starting point in preparing this strategy. Without a clear strategy for sustainable development of the activity, the utility continue to survive but with very limited potential and lower and lower performance. 9.4.3
rao1e 2005-01-17
Financial Selection Criteria By applying the criteria mentioned under section 2.4.3, the scores obtained by the water Operator from Leova are presented in Table 9.4.5.
SWECO INTERNATIONAL
Table 9.4.5: Scores for the Water Utility from Leova
Historical liabilities Liabilities to Suppliers, Personnel, Social Fund and State of Local Budgets Total Operating revenues Weight of Liabilities in Total Revenues Number of points Tariff adjustment Last tariff adjustment was in 2003 In the period 2004-2007 there were 0 tariff adjustments Total Operating ratio Operating revenues Operating profit Operating revenues/operating costs Points Account receivables collection period Trade receivables(A) Sales (B) (A/B)*365- days Points Total points
2006 USD 35,937 189,116 19.0% 8 Points 0 0 0 2006 USD 92,062 99,866 0.92 2 2006 MDL 1,398 2,147 238 0 10
The results are analyzed in the final conclusions chapter when the decision regarding the introduction of Leova in the 10 list towns is analyzed.
9.5
9.5.1
Technical Aspects
Specific Task Objectives Related to Technical Analysis The specific tasks of this sub assignment for the Pre-Feasibility Phase were clarified together with the Client in the beginning of the assignment. The tasks agreed were as follows: To prepare water and wastewater balances for 15 target towns to describe the present situation and water and wastewater projections for the year 2013;
rao1e 2005-01-17
SWECO INTERNATIONAL
to assess the present status and condition of present water supply and sanitation facilities in 15 target towns in order to evaluate the need for replacements and/or needed rehabilitation on short-term basis; and to prepare preliminary short-term investment program for years 20092013 for the 15 target towns in order to improve ad develop the present functional level of their water supply and sewerage services.
9.5.2
Water supply and sewerage in Leova Water is supplied via one (1) main water supply network (having length of approximately 38 km), which is divided in two (2) different pressure zones. Approximately 10,000 inhabitants are currently connected to the water supply network while some 1,000 inhabitants are dependable on private wells. Water supply in Leova town is organized from the surface water intake on Prut River. The water is pumped through two pipelines of siphon type with diameter of 400 mm to the treatment plant, which is situated to the west from town centre. Water treatment process includes coagulation with chemicals, sedimentation, treatment, filtration through rapid sand filters and chlorination as final treatment. The treated water is stored in three (3) separate underground water tanks. From tanks water is pumped directly to water distribution network. All of water is pumped to distribution from the main water supply pumping station located at WTP site. At present the annual water amount pumped to the network (2006) has been some 195,300 m3/year. The total length of main sewerage network is 12.6 km. Sewerage network has three (3) pumping stations out of which one (1) is the inlet pumping station for the WWTP, which is located to the south from the town centre. Only 5,330 inhabitants out of 11,200 are connected to sewerage network while rest are using septic tank system or dry lavatories. However, the number of septic tank users is not known. The wastewater treatment plant was taken into operation in 1987 representing biological treatment process (treatment in aeration tanks). At present the reported wastewater flow to the treatment plant
rao1e 2005-01-17
SWECO INTERNATIONAL
is some 1,500 m3/day while the design capacity of the plant is 4,700 m3/day. In the following sections the water and wastewater balances and the technical status of water supply and sanitation facilities as well needed investments on preliminary level have been described in detail. 9.5.3 Water Supply System
9.5.3.1
Present System
Water intake consists of one (1) surface water intake from River Prut located some 1 km west from the town centre. Intake of water represents a receiving chamber with diameter of 4.5 m. The water flows through two mains with diameter of 400 mm and length of 55 m to the receiving chamber, wherefrom is pumped through two pipes of diameter 250 mm and 300 mm to the treatment plant located west from the town centre. The total capacity of two existing pumps at PS1 is 410 m3/h. Existing building and pipelines within pumping station PS1 are from 1970s and have newer been renovated. Water treatment plant has a design capacity of 6,000 m3/day and includes the following process units: - Inlet tank/vertical mixer for coagulation chemical (Aluminium Sulphate); - Flocculation chambers (3 units); - Sedimentation tanks (3 units); - Filtration in rapid sand filters (5 units); - Chlorination as final treatment; and - Underground water reservoirs for treated water (3 x 2,000 m3, 6,000 m3 in total). From underground water reservoirs water is pumped by main water supply pumping station PS2 to the distribution. At present the annual water amount pumped to the network (2006) has been some 195,300 m3/year, while the current total capacity of PS2 is some 300 m3/h (when all pumps are in operation at same time). Water supply network having total length of 38 km and made mainly of cast iron and steel is divided into two (2) different pressure zones as follows: - Zone 1 Supplied by PS2 and one (1) counter-tank with capacity of 1000 m3; - Zone 2 Supplied by PS3;
rao1e 2005-01-17
SWECO INTERNATIONAL
From PS2 water is pumped directly to the distribution network and partially to water counter-tank with capacity of 1000 m3, which covers peak demand. PS2 and counter-tank supply the main part of the town. Southern part of the town is supplied by pumping station PS3, which pumps water directly to the network. Approximately 10,024 inhabitants are currently connected to the water supply network while some 1,176 inhabitants are dependable on private wells. There are totally two (2) pumping stations which are used for water supply. Used pumps within different pumping stations are presented in Table 9.5.1.
Table 9.5.1: Pumps used for water supply in town of Leova (Only pumps which are in permanent use or reserve are presented).
Pumping Station Water Intake (PS1) PS2 PS3
Pump type D 320/50 K 90/35 CVE 350/23 WILO NP units) K 90/35 NKP 50/160
Year of installation 1990 2006 2004 (3 2005 NA NA
Head (H, design), m 50 25 62 78 35 35
Flow (Q, design), m3/h 320 90 225 75 90 75
There are totally three (3) underground water tanks (total capacity of 6,000 m3) at water treatment plant and one counter-tank with capacity of 1000 m3. The quality of treated water delivered for distribution in 2006 from WTP has been presented in Table 9.5.2. According to water analyses data the quality of produced water in town of Leova meets the requirements set by Moldavian authorities.
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 9.5.2: Analysed water quality provided by town of Leova. Data has been provided by town of Leova and represents yearly average values.
Parameter Turbidity Odor Taste pH Hardness Dry residuals Nitrites Chlorides Sulphates Ammonia Coli form
Unit mg/l grade grade pH Mol/l mg/l mg/l mg/l mg/l mg/l bact/l
Requirement 1.5 2 2 9 7 1,000 45 350 500 2.0 3
Actual 0.58 2 2 7.0 5.6 350 0.014 42.5 205.5 0.83 <3
Water distribution network consists of steel, cast iron, asbestos and polyethylene pipes. The range of diameters is from 100 mm to 400 mm. The total length of network is 38 km. Different lengths of used pipeline materials and age of the network have been presented in Table 9.5.3.
Table 9.5.3: Water Supply Network in town of Leova.
DN, mm Steel 100-200 250-400 Sub-total Cast iron 100-150 250-300 Sub-total Asbestos 250 Sub-total Polyethylene 100 Sub-total TOTAL
< 10 years, km
10-20 years, km 0.7 0.7
20-30 years, km
30-40 years, km 3.2 3.5 6.7
11.4 2.9 14.3 0.8 0.8 4.0 4.0 4.0
8.5 3.1 11.6
0.7
15.1
18.3
rao1e 2005-01-17
SWECO INTERNATIONAL
9.5.3.2
At the moment water is taken directly from river Prut and the water intake is reported to be very sensitive for the low water level in the river and for flooding. During the heavy rains the turbidity in the river water has reported to exceed 2,000 mg/l causing serious problems for the water treatment process. In General, centrifugal pumps and other mechanical equipment are in a reasonably good condition. Most of the old pumps have recently been replaced, and new pumps are working at a good efficiency rate. In general, mechanical parts and machineries and partly structures at WTP are in a very bad condition. Basically WTP has not been renovated since it was constructed in 1976 (only some urgent renovations have been carried out). Several years ago it was replaced the sand load of rapid filters. But the dimensions of new sand (1.2-2.0 mm) dont correspond to the necessary dimension of 0.8-1.2 mm, and sand filters dont filter water properly. For chemicals, are operated 3 reservoirs for dissolving, 3 storage reservoirs and 12 working reservoirs, which are necessary to be rehabilitated. Chlorination equipment of type LONI-100 is worn out and needs to be urgently replaced. It could be estimated that in order to provide reliable water supply for town of Leova the whole WTP will need a complete renovation in the near future. Within this study the condition of underground water reservoirs was not studied in detailed. However, according to the data received from Apa-Canal of Leova reservoirs have not been renovated in 20 years. During the past years the water distribution network was extended with 4 km of pipelines. However, during past 30 years it hasnt been renovated at all. Leova Apa-Canal has reported several problems with old pipelines. Reported problems have been presented in the Table 9.5.4 and 9.5.5.
Table 9.5.4: Reported problems within Leova water pipelines in 2006.
DN 50-100 150 200 TOTAL

rao1e 2005-01-17
bursts 97 97
fissures 12 12
spills 72 15 21 108
Total 181 15 21 217
SWECO INTERNATIONAL
Table 9.5.5: Reported problems at valves within Leova water network in 2006.
DN 50-100 200 300 TOTAL
Nr of reported problems 62 7 9 78
Technological losses and in the network have been studied and calculated by the Technical University of Moldova, and the following losses have been determined: - Technological losses 12.9% - Losses in network 33.19%. Un-accounted water losses in 2006 constituted 94,000 m3. The main cause of water losses are often bursts in water network due to wear of the pipes. The main focus shall be paid on rehabilitation of network in order to provide high quality water at necessary pressure for more inhabitants.
9.5.3.3
Pumping station PS1 and water treatment plant operate non-stop, providing to the town good quality drinking water. According to the analysis from year 2006 the quality of supplied water from WTP is good and corresponds to set Moldovan norms for drinking water. PS2 has the total capacity of 300 m3/h and operates up to 20 hours/day. The town is supplied with water 20 hours/day. Different pressure zones are supplied as follows: - Zone 1 Supplied by PS2 and one (1) counter-tank with capacity of 1000 m3, the average pressure being 6.5 bars; - Zone 2 Supplied by PS3, the average pressure being 6 bars. Several years ago the system was divided into three (3) pressure zones, and third pressure zone was supplied by a small pumping station. At present, the pressure from the main zone is enough to supply the third zone, and pumping station is taken out of operation.
rao1e 2005-01-17
SWECO INTERNATIONAL
Beginning of year 2007 there were metered 66% of total number of consumers. All private apartment meters are size of DN 15 while size of meters installed at institutions and organizations vary from DN 15 to DN 50 depending on connection diameter. In 2006, the total energy consumption at PS1 was 177,175 kW and 234,720 kW at PS2. The average used energy consumption at pumping stations was 0.31 KWh/m3. According to preliminary energy efficiency analysis all pumping station are running with reasonable good energy efficiency. 9.5.4 Sewerage System
9.5.4.1
Present System
The main sewerage network having length of 12.6 km is made of asbestos, ceramics, steel and cast iron pipelines. Network consist three (3) pumping stations out of which one (1) is the inlet pumping station for the WWTP, one (1) is used to pump sewerage from the town centre to the inlet pumping station of the wastewater treatment plant and one (1) pumping station is used to pump industrial water. WWTP is located to the south from the town centre. Only 5,334 inhabitants out of 11,200 are connected to sewerage network while the rest are using septic tank system or dry lavatories. However, the number of septic tank users is not known. WWTP, constructed in 1987, has a design capacity of 3,100m3/day and consists the following treatment units: - inlet chamber; - tangential sand traps; - primary decanters combined with primary sludge fermentation tanks; - aeration tanks; - secondary sedimentation tanks; - biological ponds; - sludge pumping station and blowers station, and - chlorination plant.
rao1e 2005-01-17
SWECO INTERNATIONAL
At present the biological treatment plant in aeration tanks is not in use and only wastewater treatment method is mechanical treatment and stabilization in ponds before discharging into river. There is also a separate storm-water system, which discharges water in a ditch at the lowest point of the town.
9.5.4.2
The main sewerage network is from the year of 1970s and has not been renovated during past 35 years. The main materials used are asbestos and ceramics. Description of the sewerage network has been presented in the Table 9.5.6.
Pipe Material Ceramics Asbestos Steel Cast iron TOTAL
DN, mm 200-250 300 100 200 300 500 100 300
Length, km 2.4 1.1 1.0 1.6 3.3 0.8 0.3 2.1 12.6
Operation period, years 35 35 35 35 35 35 20 20
The existing sewerage network (excluding pumping stations) could be considered to be in reasonable good condition. However, within this study any conditional analysis has not been carried out and it could only be estimated that at least proper flushing of pipelines and emptying of manholes will be needed. Still, the sewerage network covers only small part of the town and only some 48 % of inhabitants are currently connected to the sewerage system. In order to provide proper sanitation services the first priority regarding sewerage system would be enlargement of the network to cover more water consumers. In General, all mechanical equipment within three (3) existing sewerage pumping stations are in a very poor condition. Most of the mechanical parts are worn out and old pumps, valves and pipelines are at the end of their operational lifetime. In addition to that there is no adequate monitoring for operation.
rao1e 2005-01-17
SWECO INTERNATIONAL
Also, existing Wastewater Treatment Plant is at the end of its operational lifetime. Taken into consideration the condition of existing structures and machineries and insufficient process technology it could be recommended that the whole treatment plant will be replaced with new modern and more compact WWTP taken into account current and future wastewater flows and loads. For new WWTP there is a possibility to use area reservation next to the existing plant. At present, representatives from Czech Republic try to finance the rehabilitation of wastewater treatment plant. It shall be noted that within this study only visible conditional analysis were carried out and proper analysis of existing structures would be needed during next project phase.
9.5.4.3
The inlet pumping station to the WWTP with capacity of 250 m3/h operates approximately 2.5-3 hours per day. The wastewater volume received by WWTP in 2006 was 42,733 m3, including: - Wastewater from private households, 28,400 m3; - Wastewater from business technological repairs, and - Wastewater from institutions, 13,900 m3. 4,000 m3;
Wastewater treatment plant, having designed capacity of 4,700 m3/day, is operated at non-permanent flow-rate of 1500-2000 m3/day. The treatment of wastewater is made naturally in biological ponds thus the technological equipment at aeration tanks and sedimentation tanks are not in operation. The effluent quality in 2006 according to the analysis has been presented in the Table 9.5.7.
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 9.5.7: The effluent quality at Leova WWTP in 2006.
Parameter pH SS BOD5 Ammonia Nitrites Nitrates Phosphates
Unit mg/l mg/l mg/l mg/l mg/l mg/l
Inlet concentration 7.0 401 575 68.8 0.7 5.8 1.5
After treatment 8.0 42.5 245.0 42.0 0.7 2.7 1.2
Requirement < 8.5 5 3.0 0.5 0.08 40
Thus the very low influent flow and considerably poor condition of used process units and insufficient process control the proper operation of WWTP is not possible. The wastewater quality does not meet the requirements set by Moldovan authorities. However, taken into consideration the treatment only in biological ponds the treatment result is reasonable good and reported SS reduction being 89 %, BOD5 reduction being 57 % and even ammonia reduction being 39 %. Test result indicates that the used method for taking samples from the effluent wastewater is most probably insufficient and real reductions could be on lower level than reported. There are no data on energy consumption of wastewater pumping stations, as well as for wastewater treatment plant. However, taking into consideration the age of used pumps (more than 20 years), pumps energy efficiency is considered to be very low. 9.5.5 Prioritising of needed Investments for years 20092013
9.5.5.1
In order to prepare preliminary water demand and wastewater projections the water and wastewater flows were analysed for the last three (3) years (20042006). Preliminary water demand and wastewater projections for the year 2013 are based on general assumptions as follows: - The connection rate to the water supply network is 100 %; - Per capita consumption in Leova in 2013 is 120 litres/capita/day; and - The connection rate to the sewerage system is 70 %.
rao1e 2005-01-17
SWECO INTERNATIONAL
In addition to above mentioned, some assumption related to rehabilitation of the water supply network were made as follows: - Due repairing and maintenance work and installation of new pipelines for new housing areas the amount of leakages from the water supply network have estimated to decrease some 15 %; - Due installation of new in-house flow meters and due better accounting system amount of unaccounted water is estimated to decrease some 20 % (billed water demand per capita will increase); and - Due better in-house flow measurement and possible increase in water tariffs per capita consumption has estimated to decrease some 10 %. Preliminary water and wastewater flow projections for Leova are summarised below in Table 9.5.8.
Leova Population connected to the Water Supply network Population connected to the Sewerage network Water pumped to the Distribution Non-Revenue Water Average total flow to WWTP
9.5.5.2
Needed Investments
Investment need estimations are done for the period of years 20072013 in order to secure sufficient operation of water supply and sanitation systems and to provide water supply and wastewater treatment for more inhabitants in Leova. Short-term investments needed for water supply system are listed below, and serves as a basis for the proposed investment packages:
rao1e 2005-01-17
SWECO INTERNATIONAL
- Rehabilitation of water treatment plant (replacement of all mechanical parts and renovation of concrete tanks); - Rehabilitation of network which is older than 30 years (> 20 km); - Continuing of installation of in-house water meters; - Construction of new network including water meters for new consumers for at least 1,000 inhabitants (> 5 km); - Implementation of automation and water flow metering for water intake. In general, both sewerage network and WWTP require urgent rehabilitation and reconstruction works to enable reliable operation of the network and to fulfil the treatment requirements set by Moldovan authorities. The investments needed for sewerage system are listed below, and serves as basis for the proposed investment packages: - Flushing of existing sewerage network; - Enlargement of the network to cover at least 3,000 new inhabitants (up to 30 km of sewerage collector of DN150); - Reorganising the existing septic tank emptying system including supply of proper vehicle for this purpose; - Renovation of two (2) wastewater pumping stations and WWTP inlet pumping station; and - Construction of new WWTP for capacity of 1,000 m3/day (1st stage) with option for enlargement for total capacity of 2,000 m3/day (2nd stage).
9.5.5.3
Preliminary cost estimations for proposed investments packages within water supply and sanitation services are only preliminary estimations and will only be used as help in preparation of suitable investment packages in Feasibility Phase of the project. Proposed investment packages have been prepared so that there are two different packages; 1st investment package for works which shall be carried out in the very near future (within 1-2 years) and 2nd investment package for other works which must be implemented in order to secure the water and sanitation operations in long term: 1st Investment Package: 1.1 million USD in total Renovation of existing water treatment plant (mechanical parts, chemical dozing, and automation), 0.4 million USD;
rao1e 2005-01-17
SWECO INTERNATIONAL
Purchasing one (1) vehicle for septic tank emptying, 0.1 million USD; and Extension of water supply network with 5 km and implementation of automation system for water intake, 0.6 million USD.
2nd Investment Package, 10.0 million USD in total Rehabilitation and extension of sewerage network (40 km including renovation of pumping stations) and construction of new WWTP, 8.0 million USD; and Rehabilitation and extension of water supply network (20 km including pumping stations), 2.0 million USD.
rao1e 2005-01-17
SWECO INTERNATIONAL
10
10.1
Orhei
General
Orhei town is located in the centre of Republic of Moldova, on the left bank of Raut river, 35 km north of the capital on the road between Chiinu and Bli.
Figure 10.1.1: Location of Orhei
rao1e 2005-01-17
SWECO INTERNATIONAL
The official number of inhabitants was a few years ago 47000. The real number is now, considering emigration to Chiinu and to other countries and immigrants from the surrounding rural areas, estimated to around 34000 inhabitants. A census will be carried out during the summer 2007, and the result is expected to late summer 2007, probably September. The Mayor and the Apa-Canal Director informed that people have begun to come back to the town and also to start some new business activities resulting in a better economy for the town. Water services have also improved. In1999 there were water supply only 2*4 hours per day. Now there is water supply 24 hours per day.
10.2
10.2.1
History The first water pipes were laid already in 1911 when wooden pipes were used, but the more serious water services in Orhei date back to year 1932. The water and wastewater services as well as all other technical municipal services were owned by the state and operating as a section under the local authorities. The present Municipal Enterprise Apa-Canal was established in year 2000.
10.2.2
The Owner. How the Owner Governs the utility The Town is the only owner of the service utility. The utility consists of one of the departments of the Town Administration. The Town Council appoints the Director of the utility, and he reports to the Deputy Mayor responsible for technical questions. Beside he also reports twice per year to the Town Council. Tariffs and consumption norms are approved by the Town Council. The Town has no service agreement with Apa-Canal describing for instance the level of service.
10.2.3
Legal Aspects The enterprise has its own statutes but no separate service agreement with its owner describing for instance the level of service to the customers.
rao1e 2005-01-17
SWECO INTERNATIONAL
The Municipality is the owner of all the assets including both water and wastewater facilities. The enterprise operates these facilities. Beside the national legislation Orhei has local rules for metering, wastewater discharge from enterprises to the municipal system and regulations on payment for being a client. Apa-Canal has written agreements with all its customers. 10.2.4 Organization and Management The organization chart for the enterprise is presented below. The Director has worked in his present position since 2004. He was at the utility 1978 and has worked as electrician, head of a department, chief engineer and technical director. The utility has a formal management team working almost as a sort of owners council. It consists of a few persons from the utility, often heads of departments elected by the Director, plus 2-3 persons from the Town Council and one from the Town Administration. The persons representing the town are appointed by the Town authorities and are not paid for their work in the management team. Written regulations for the management team are just now under preparation. The management team are controlling and supporting the director. All major questions are discussed in the management team. When the management team has discussed and approved a question, it is normally not necessary to take it up with the Town Council. The management team does not deal with the daily operation of the utility. The management team is using a fixed agenda and writing minutes of meetings. For the daily operation of the utility the Director has a meeting every day with the head of production and other heads of departments. Apa-Canal has an integrated management information system. The system includes computers and software for accounting, for technical purposes and for commercial and billing, although it must be partly upgraded, especially for the commercial and billing. Information is open and spread in all directions in the utility.
rao1e 2005-01-17
SWECO INTERNATIONAL
Apa-Canal has prepared a very good document called Feasibility Study March 2007. There the company has defined its mission and strategic objectives. There is also a table listing approximately 40 indicators, of which many can be used as performance indicators in a possible future business plan.
rao1e 2005-01-17
SWECO INTERNATIONAL
When printing and binding the PreFS report: Change this page to the Excel sheet with A3 size and file name
\Moldavien\Info Towns from Ivan\Orhei\Organigrama Orhei
rao1e 2005-01-17
Figure 10.2.1: The Organization of Orhei Apa-Canal
SWECO INTERNATIONAL
The company uses to some extent principals of accountable management and management by objective. The Director and the heads of different groups agree a budget. If a group can work reach a better result than the budget, 50% of the profit go to a bonus for the group members, 25% go to activities for the development of the group, 14% to the management of Apa-Canal and 11% to others outside the group but involved in the result. The latter may for instance be the companys lawyer. The agreements with the group leaders are written. Goals and performance indicators are specified (operational costs, water losses, energy consumption and good management for the group). 10.2.5 Staff. Efficiency and training needs The total number of personnel in the enterprise is now 203. Total number of consumers 23961. The productivity in the water services based on this figure is therefore around 118 customers per employee. The number of households connected to water services is 10903, and the number of commercial and budget organizations is 281. The productivity in the water services is therefore around 55 customers per employee. The number of households connected to the wastewater services is 5914. If adding some 250 commercial and budget organizations, the productivity based on wastewater customers is around 30. The number of connections to the water system is according to received information 5005 resulting in a productivity of 25 connections per employee. This is probably only population connected, and if 229 business companies and 20 budget organizations are added, the productivity figure is slightly better. The number of connections to the wastewater system is 3600. Most of the heads of departments, engineers and specialists have an education in the right area for their work, although there is a considerable need for further training in the utility. The following training needs were presented to the Consultant:
rao1e 2005-01-17
SWECO INTERNATIONAL
1 2 3 4 5 6
Description of areas Financial Management Technical Management Technical Audit Financial Audit Senior Management Quality Management
Managerial staff Top and medium level Top and medium level Top and medium level Top and medium level Top and medium level Top and medium level
Number of persons 12 12 12 12 12 12
The average salary is too low in the company. This causes difficulties to attract and keep qualified persons, and the personnel turnover is round 20%. Apa-Canal has an experienced implementation unit capable to organize and manage investment projects. 10.2.6 Estimation of Consumption. Billing and Collection The rate of population with meters calculated on the total number of customers is 70%, thus including customers presently disconnected from water supply. The rate of population with meters calculated on the number of not disconnected customers is 83%. The customers buy and repair the meters on their own account. Consumption norms are used for customers without meters. Seven meter readers from Apa-Canal read monthly the meters and give the collected data to the company for treatment in the computerized integrated billing and accounting system. The bills are then distributed by the meter readers next month. The collection rate is 85-87%. Considering also payments of old debts the payments the collection rate was 121% for year 2004, 114% for 2005 and 106% for 2006. 10.2.7 Relations to customers and other stakeholders In addition to working with different kinds of media such as radio and newspapers for information to the customers Apa-Canal has also broschures and other written iformation. This information treats e.g. the need for water saving, different methods for water saving, different basic information about the utility and its activities. There is
rao1e 2005-01-17
SWECO INTERNATIONAL
no tradition of letting school classes, pensioners groups etc visiting Apa-Canal. There are only fragments of internal or external quality programme defining for instance issues such as quality of water and sewage service, quality of public relations, water demand management and environmental questions. 10.2.8 Consultants Comments The utility seems to have a well functioning management group although there may be possibilities to further improve the relation between the owner and the operator. They have introduced a form of accountable management or management by objectives which the company continues to improve. They also have a document (Feasibility study) which constitutes a good basis for developing a business plan. The efficiency, approximately 55 customers and 25 connections per employee, may be improved as well as the collection rate. Also the relations to customers and society may be improved. Orhei Apa-Canal is from institutional point of view one of the best utilities visited during preparation of this study. From institutional point of view the company is therefore approved for continued participation in the project. Further comments, see section 15.
10.3
10.3.1
Social environment in Orhei
10.3.1.1
rao1e 2005-01-17
Population
Number of population for Orhei as at 1st of January 2007 is the following:
SWECO INTERNATIONAL

(Thou.) 33.7 33.7 35.15
10.3.1.2
Estimation of Household Revenues Average nominal monthly salary - National level Average nominal monthly salary - Orhei County Disposable household income (national average per household member) Average monthly pension (national level) Average household disposable income in the county (per member) Average monthly pension at county level Number of persons in household Average household (no of persons) Pensioner household (no of persons) Average household disposable income in the county (per household) Average monthly pensioner household revenues at county level (per household) Lei Lei Lei Lei Lei Lei
Orhei 2004 2005 1,103.1 1,318.7 889.8 1,079.5 491.4 325.3 396.4 262.4 568.6 383.4 465.5 313.9
No. No. Lei Lei
3.0 1.8
3.0 1.8
1,189.1 472.3
1,396.4 564.9
10.3.2
Economic environment in Orhei
10.3.2.1
rao1e 2005-01-17
Industry
Volume of industrial production in Orhei Raion, compared to the total industrial production in Republic of Moldova, is presented in the following table:
SWECO INTERNATIONAL
Table 10.3.3: Volume of Industrial Production Evolution Orhei Raion
Volume of industrial production in 2006 Total out of which Orhei
Total production on Republic of Moldova increased with 26% during the period 2004-2006. For Orhei Raion, the production increased considerably with 50% in 2005 (current prices), and decreased with 13% in 2006 (current prices). Therefore, for the analyzed period, the production increased with 32% (current prices).
10.3.2.2
Financial situation of Commercial Companies in Orhei Raion, compared to the total financial situation of Republic of Moldova, is presented in the following table:
rao1e 2005-01-17
Jan.-Sept. 2004 Total Orhei

29423 11289 13906 572786 2790 53031 19140 61291 617 278 270 11507 -0.9 572.6 159.0 723.8

31870 12380 14893 570143 3424 66870 22717 68420 651 308 265 11178 18.8 693.8 258.4 790.0

34700 13155 16532 569698 3689 79052 26867 81804 695 303 310 10808 -2.3 820.2 252.7 971.
SWECO INTERNATIONAL
As can be observed from the table above, the number of profitable enterprises is increasing, but the percentage of profitable enterprises in total reporting enterprises remains approximately the same (46%). In Orhei Raion, the number of enterprises and the profitable enterprises slightly increased. Average number of employees at national level kept a stable trend. In Orhei Raion, during the analyzed period, the average number of employees registered a decrease of 6% in period under analyse. Financial result before tax recorded a negative value in 2004. In 2005 financial result increased, reaching a value of 18.8 mil Lei. For 2006, financial result recorded again a negative value. Sales revenues increased in 2005 (21% compared to 2004) and continued to increase in 2006 (18% compared to 2005). Receivables related to commercial invoices and budget compensation increased significantly in 2005 with 62% and kept a stable trend in 2006. During the analyzed period, debts recorded a growth of 34% in 2006, compared to 2004.
10.4
10.4.1
Financial Aspects
10.4.2
10.4.2.1
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 10.4.1: Operating result evolution - Orhei
Operating result for the year Amounts in USD Operating revenues Sales Revenues from services Other revenues Operating costs Material expenses Third parties services Personnel expenses Salaries Social insurance taxes Other costs for water and sewerage Depreciation Energy cost Costs related to other activities Operating result
Source: Water Utility from Orhei
2004 479.8 479.8 534.2 84.9 8.4 232.0 178.7 53.4 27.1 83.9 97.5 0.4 (54.4)
2005 527.3 507.8 19.4 560.7 83.0 9.2 257.7 200.0 57.7 26.6 83.8 100.4 (33.5)
2006 691.9 641.8 50.1 663.7 95.6 12.2 304.6 238.4 66.1 51.5 92.6 107.1 28.2
In 2006, approximately 49% of the operating revenues result from water supply and 49% from wastewater operations. The total operating result is negative for 2004 and 2005 with an improvement tendency in 2006, when the operating result was positive. The evolution of the structure of operating revenues is presented in the following chart:
Figure 10.4.1: Structure of Sales - Orhei
Structure of Sales
400.0 350.0 300.0
Thousand USD/y
250.0 200.0 150.0 100.0 50.0 2004 2005 2006 W ater W astewater

rao1e 2005-01-17
SWECO INTERNATIONAL
The level of revenues increased in 2006 because both invoiced quantity and tariffs increased The level of non-revenue water is important and the utility will try to decrease the losses in the following years. One of the main purposes of the investment promoted with financial resources from The World Bank loan is to decrease the water losses. The evolution of invoiced quantities is presented in the following table:
Table 10.4.2: The Evolution of Invoiced quantity 2004-2006 - Orhei
2004 Th. m3 454.1 383.0 71.1 521.0 244.9 276.2
2005 Th. m3 482.6 393.0 89.6 558.1 263.7 294.5
2006 % Th. m3 6.3% 501.2 2.6% 402.3 26.0% 7.1% 7.7% 6.6% 98.9 574.2 249.5 324.7 % 3.9% 2.4% 10.4% 2.9% -5.4% 10.3%
The water consumption slightly increased in the last years mainly as result of increase of water delivered to companies and institutions. The weight of water delivered to companies and institutions is low (represents only 20% in total invoiced water). Blockhouses are metered with high precision meters, the metering coverage being of approximately 88-90%. Because the level of tariff for companies and institutions is significantly higher than for domestic customers, these entities have the tendency to find water from other sources (have their own sources) and to pay only sewerage services to the utility. The delayed adjustment of tariff compared with the cost increases had a negative impact on the performances of the water utility. The water utility can not control the tariff adjustment process, which is the prerogative of the Local Council. The water utility can propose tariff increases based on cost increase but the final decision is taken by Local Council. The evolution of the structure of total operating costs is presented in the following chart:
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 10.4.2: The Structure of Operating Costs - Orhei

24.0%
16.1%
E nergy
13.9% 45.9%
O ther costs
The most important cost elements are personnel costs (wages, salaries and related taxes), which represents 45.9% of operating expenditures in 2006 and other costs, which represents about 24.5% of operating expenditure in 2006. The weight of energy costs was relatively constant in the last years. The salaries have increased in nominal terms every year. The increase of salaries has to be performed based on premises stipulated in the law regarding evolution of salaries in the public sector. This element is more or less not under the control of the water utility. Due to lack of financial resources the last mandatory salary increases was not yet implemented. The evolution of operating costs is presented in the following chart:
Figure 10.4.3: Evolution of operating costs - Orhei
350.0 300.0
Thousand USD/ye
250.0 200.0 150.0 100.0 50.0 E nergy P ersonnel (salaries and related taxes) O ther costs 2004 2005 2006
rao1e 2005-01-17
SWECO INTERNATIONAL
Personnel costs increased constantly in the period under analysis. Other costs kept a stable trend in 2004 and 2005, and increased in 2006. Energy costs recorded a stable evolution.
10.4.2.2
Table 10.4.3: The Level of Account Receivables as at December 31, 2006 - Orhei
31.12.2006 USD % 89,822 49.6% 35,551 19.6% 55,687 30.8% 181,060 100.0%
The management of the company needs to have among its priorities the increasing of the collection level. Collection level for 2006 was 96%. The level of short term liabilities has decreased in the last years. The actual management of the utility has succeeded to pay some of the current liabilities generated in the last year but the total level is relatively high. A breakdown of the short-term liabilities is presented in the following table:
Table 10.4.4: Evolution of short-term liabilities (amounts in Thousand USD) - Orhei
2004 189.0 17.8 15.7 107.2 37.8 10.4
2005 151.9 12.8 17.5 95.1 19.2 7.3
2006 115.4 26.6 23.8 41.3 19.4 4.5
Table 10.4.5: Aging of liabilities to social fund - Orhei
rao1e 2005-01-17
31.12.2006 USD % 84 0.2% 0.0% 41,184 99.8% 41,268 100.0%
SWECO INTERNATIONAL
Table 10.4.6: Aging of liabilities to state and local budgets - Orhei
31.12.2006 USD USD 5,527 28.5% 0.0% 13,840 71.5% 19,366 100.0%
10.4.2.3
Tariff analysis
Figure 10.4.4: Water Tariff Evolution - Orhei
1.40 1.20 1.00 0.91 0.98 D estic om custom ers 0.56 0.46 0.44 Instutions and com panies 1.17
USD/m
0.80 0.60 0.40 0.20 2004 2005 2006
rao1e 2005-01-17
SWECO INTERNATIONAL
The last tariff increase for water and wastewater was performed in January 2006. Tariff for domestic customers recorded an increase of 33%. Tariffs for public institutions were increased with 24%. The company wishes to increase tariffs in April, but due to the fact that 2007 is an election year; it will be very difficult to approve by the Local Council. The tariff evolution of the waste water tariffs for the last years is presented in the following chart:
Figure10.4.5: Sewerage Tariff Evolution - Orhei
0.90 0.80 0.70 0.60 D estic om custom ers 0.79 0.85
0.81
USD/m
0.50 0.40 0.30 0.20 0.10 2004 2005 2006 0.07 0.06 0.11 P ublic Institutions
For the future the utility should consider the possibility and to take all the necessary actions to adjust the tariff more often to avoid the negative effects of the cost increases due to the inflation. In the future the water utility will have to cover also the possible debt service related to the loan from the World Bank. Briefly, the methodology for approving tariffs consists of the following steps: The utility specialists are preparing a study for tariff adjustment The study is sent to the Local Council and ANRE for approval. According to the management team of the utility, the level of approved tariff is usually lower than their request. The management team considers that a tariff increase will solve most of the financial problems of the utility. One of the most wide spread idea about tariff increase in Moldova is to increase more of tariffs for private entities and institutions and to increase less the tariffs for inhabitants. In most of the cases this is mainly a political decision with
rao1e 2005-01-17
SWECO INTERNATIONAL
the purpose of maintaining a lower pressure on the domestic customers. This approach leads to an increase of the cross-subsidization between entities (private companies and institutions) and inhabitants. This discourages the economic development.
10.4.2.4
Even if the utility has recorded achievements in the last years, financial management is still far from the requirements of a modern utility. A lack of skills and human resources leads to limitations in the activities performed by the Finance Department. The accounting department consists of 6 persons: 2 accountants for salaries and materials, 1 cashier, 1 economist-accountant, 2 sales accountants and 1 chief accountant. Invoicing is made using computer. The company has an internal reporting system (situations for management) and separate budgets for each section. The management team has some important achievements in the planning process (first steps) consisting in the implementation of the cost centre process. The main activities were split into cost centres and each manager of a cost centre is preparing a budget and then it has to don't exceed the expenses from the budget. Unfortunately the specialists who started to implement this system left the water utility and the replacing personnel have lower qualification and need extensive training. We recommend continuation of implementation of the cost accounting system by creating cost centres for the main activities (water and sewerage). There is important to find out the performances of each sector. We recommend the extensive use of computer for financial management. Accounting, billing and collection, financial forecast are just a few items which can be performed more efficient by using a computer. The utility has a few computers but the degree of usage is still low. The utility is working on implementing the computer use in most of the elements related to financial activities. The process of financial planning does not include all the parties that should be involved with financial planning matters and has not the necessary prediction-correction role. The utility is facing a process of implementing a computer system for the following activities:
rao1e 2005-01-17
SWECO INTERNATIONAL
financial and managerial accounting; inventory management; invoice management; tariff calculation; technical analysis; The management team of the utility has to prepare a long-term strategy to assure the sustainable development. This analysis can be used as a starting point in preparing this strategy. Without a clear strategy for sustainable development of the activity, the utility continue to survive but with very limited potential and lower and lower performance. 10.4.3 Financial Selection Criteria By applying the criteria mentioned under section 2.4.3, the scores obtained by the water Operator from Orhei are presented in the following table:
Table 10.4.7: Scores for the Water Utility from Orhei
Historical liabilities Liabilities to Suppliers, Social Fund and State of Local Budgets Total Operating revenues Weight of Liabilities in Total Revenues Number of points Tariff adjustment Last tariff adjustment was in January 2006 In the period 2004-2007 there was only 1 tariff adjustment Total Operating ratio Operating revenues Operating profit Operating revenues/operating costs Points Account receivables collection period
rao1e 2005-01-17
2006 USD 115,420 691,882 16.7% 8 Points 4 4 8 2006 USD 691,882 663,694 1.04 6 2006 MDL 2,496 8,428
Trade receivables(A) Sales (B)

291
SWECO INTERNATIONAL
Historical liabilities (A/B)*365- days Points Total points
2006 USD 108 6 28
The results are analyzed in the final conclusions chapter when the decision regarding the introduction of Orhei in the 10 list towns is analyzed.
10.5
10.5.1
Technical Aspects
10.5.2
Water supply and sewerage in Orhei Water intake consists of three (3) different water intake areas out of which two (2) are deep well water intakes near the city centre and one (1) is a natural spring located some 20 kilometers north from the city center. Almost all of water pumped to distribution (some 80 %) is produced at deep well water intake area at city centre called Gradina Publica and some 17 % of produced water is delivered from the natural spring while only some 1-3 % is delivered from deep well water intake area located at north-west from city center (area called Mitocul Vechi). At present the annual water production in Orhei (2006) has been some
rao1e 2005-01-17
SWECO INTERNATIONAL
3,200 m3/day while the current total capacity of all water intakes is approximately 16,000 m3/day. Orhei water supply network is divided into two (2) different pressure zones. One (1) zone (northern part of the city) is served by deep well water intakes and one (1) zone (southern part of the city) is served from natural spring. From used deep wells water is pumped first to underground water reservoirs and further partially directly to city network and partially to next level pumping stations. From natural spring water intake water is pumped through 20 kilometer long pressure pipeline and four (4) different pumping stations to the city network. Water supply network has a total length of approximately 164 km. Some 90% of inhabitants are currently connected to the water supply network. The only water treatment method used is chlorination to underground water tanks within pumping station PS2 which pumps some 55 % of all produced water in Orhei. For natural spring water intake there is no water treatment in use. Dilution of solid chlorine is done manually while dosing of chlorine solution is done automatically by using dosing equipment. The total length of main sewerage network is approximately 50 km. Sewerage network has three (3) district pumping which are all renovated (all will be renovated) by the end of year 2007. One of three district pumping stations (SPS3 ) is the inlet pumping station for WWTP which is located some 95 meter higher level than the city centre some 1.5 km east from the pumping station SPS3. The pressure pipeline from main district pumping station (SPS 2) to the WWTP has approximately length of 2.0 km. Only some 50 % of inhabitants are connected to sewerage network while rest are using septic tank systems or dry lavatories. However, the number of septic tank users is not known. The wastewater treatment plant was taken into operation in 1976 representing biological treatment process (treatment in biological filters). At present the reported wastewater flow to the treatment plant
rao1e 2005-01-17
SWECO INTERNATIONAL
is some 2,300 m3/day while the design capacity of the plant is 10,000 m3/day. In general, WWTP has no any grit removal or screening and the existing primary clarifiers are in very poor condition. However, due considerably low influent flow the biological filtration and final stabilization works somehow satisfactory and reported effluent quality has been considerably good. Still, the most parts of the treatment plant needs complete renovation. In the following sections the water and wastewater balances and the technical status of water supply and sanitation facilities as well needed investments on preliminary level have been described in detail. 10.5.3 Water Supply System
10.5.3.1
Present System
Water intake consists of 18 deep wells located on two different water intake areas near the city centre and a natural spring located some 20 kilometers north from the city center as follows: - Deep wells water intake area Mitocul Vechi, 15 Wells in total. Five (5) wells in use (however, only some 50 hours per year); - Deep wells water intake area Gradina Publica, 3 Wells in total. All three wells in use (pumps works approximately some 12 hours per day).; and - Natural spring water source. 20 kilometers from the city (one (1) pump in use, works approximately 3 hours per day). Some 80 % of produced water is delivered from Gradina Publica deep well water intake area located in the public park in the city centre. Some 17 % is delivered from natural spring while only some 1-3 % is delivered from Mitocul Vechi. At present the annual water production in Orhei (2006) has been some 3,200 m3/day while the total capacity of all water intakes is approximately 16,000 m3/day. Water supply network has a total length of approximately 164 km. Some 90% of inhabitants are currently connected to the water supply network. Network is divided into two (2) different pressure zones. One (1) zone (Northern part of the city) is served by deep wells (Mitocul Vechi and Gradina Publica) and one (1) zone (southern part of the
rao1e 2005-01-17
SWECO INTERNATIONAL
city) is served from natural spring. Thus the city is located partly on the hills and network is not equipped with pressure reducing valves is pressure in some sections of networks (in both pressure zones) very high exceeding the pressure of 6.0 bar. From used deep wells at Mitocul Vechi water is pumped first to three (3) separate underground water reservoirs located within pumping station PS2 near the water intake area. From reservoirs water is pumped by PS2 partially directly to city network and partially to pumping station PS4 located on upper level in the city network. From pumping station PS4 water is pumped directly to the network. From Gradina Publica water is pumped first into two (2) separate reservoirs and then by pumping station PS1 partially to water distribution network and to PS2 for chlorination and partially to pumping station PS8 located on upper level in the city network. From pumping station PS8 water is pumped directly to the network without treatment. From natural spring water intake water is pumped through 20 kilometer long pressure pipeline and three (3) different pumping stations directly to the network; PS5 (intake), PS6 (intermediate), and PS7 (network pumping station). The only water treatment method used is chlorination to underground water tanks within PS2. Water which is pumped directly to the network from PS 1 and PS 8 and from natural spring water intake (PS7) has no water treatment at all. Dilution of solid chlorine is done manually at the chlorination building located at the PS2 site while dosing of chlorine solution is done automatically by using dosing equipment, located at PS2. Approximately 90 % of population and 100 % of business utilities are currently connected to water supply network. Connections to network (reported by Orhei Apa-Canal) are as follows: - Multi-storey buildings or other buildings for more than one family: 4,890 units; - Private households: 5,120 units; - Schools: 9 units; - Institutional buildings: 11 units; and - Business utilities: 321 units.
rao1e 2005-01-17
SWECO INTERNATIONAL
There are totally six (6) pumping stations which deliver water to distribution network. Main pumping stations are PS1, PS2, and PS7 while PS3, PS4 and PS8 are used as intermediate pumping stations. In addition to that there is one (1) inlet pumping station, PS5, at natural spring water intake which delivers water to pressure pipeline for the city. There is also one (1) pumping station, PS6, on pressure pipeline between pumping stations PS5 and PS7 located some nine (9) kilometres from pumping station PS5. The total number of used water pumping stations is eight (8). Used pumps within different pumping stations are presented in Yable 10.5.1. Used pumps for water intake are presented in Table 10.5.2.
Table 10.5.1: Submersible pumps used for water intake in Orhei.
Nr of deep well Mitocul Vechi No. 1-3 Mitocul Vechi No. 4 Mitocul Vechi No. 5 Gradina Publica No.1 Gradina Publica No.2 Gradina Publica No.3
Pump type ETV-8-25-100 WILO F13 WILO F14 ETV-8-25-400 ETV-8-25-100 MK 615 -8N460
Year of Head (H, installation design), m 2002-2003 10 2007 70 2002 80 2005 100 2007 100 2006 60
Flow (Q, design), m3/h 25 25 25 25 25 60
Table 10.5.2: Pumps used for water distribution in Orhei. Only pumps which are in use are mentioned.
Pumping Station PS1 PS2 PS3 PS4

rao1e 2005-01-17
Pump type CO-2 MVI 3207 TNCG-38/176 K 20/30 K 45/30 TN-400/105 K 50/50 K 50/50 TNCG-38/176 CO-2 MVI 808 CO-2 MVI 1608 K 45/30 CO-2 MVI 3204 D 200/95 TNC-180/212
PS5 PS6
Year of installation 2006 2000 2002 2001 1996 1996 1988 2004 2006 2006 2002 2007 2003 1994
Head (H, design), m 95 176 30 30 105 50 50 176 60 120 30 30 95 212
Flow (Q, design), m3/h 30 38 20 45 400 50 50 38 11 15 45 42 200 180
SWECO INTERNATIONAL
Pumping Station PS7 PS8
Pump type K 20/30 K 20/30 K 50/50
Year of installation 1988 2002 2003
Head (H, design), m 30 30 50
Flow (Q, design), m3/h 20 20 50
There are totally 17 underground water tanks in used within different pumping stations as follows: PS1, (2 units): 2 x 125 m3 (250 m3 in total); PS2, (3 units): 2 x 500 m3 + 1 x 300 m3 (1,300 m3 in total); PS3, (1 unit): 1 x 2,000 m3; PS4, (3 units): 2 x 2,000 m3 + 1 x 300 m3 (2,300 m3 in total); PS5, (2 units): 2 x 125 m3 (250 m3 in total); PS6, (2 units): 2 x 250 m3 (500 m3 in total); PS7, (2 units): 2 x 250 m3 (500 m3 in total); and PS8, (2 units): 2 x 125 m3 (250 m3 in total)
At present, the quality of water from deep wells and from natural spring water source corresponds to Moldavian Normative for Potable Water (see Table 10.5.3).
Table 10.5.3: Analysed water quality. Data has been provided by city of Orhei.
Parameter pH Hardness Dry residuals Nitrates Chlorides Sulphates Copper Fe Ammonia Silicates Strontium
Unit Mol/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l
Requ ireme nt 9 <7 1,000 45 350 500 1.0 0.3 2.0 10 7.0
Mitocul Vechi 7.0 6.0 640 0.5 56.8 166 0.005 0.1 2.8-3.4 11.9 8.9
Gradina Publica 8.1 11.6 1,150 27.2 99.4 314 0.007 0.1 1.3 8.9 8.3
Natural Spring 7.2 7.8 653 11.5 42.6 147 0.005 0.1 0.5 3.7 3.25
rao1e 2005-01-17
Water distribution network consists of steel, cast iron and polyethylene pipes. The range of diameters is from household connections of DN 15 to main distribution network DN 300. The total
SWECO INTERNATIONAL
length of network is 164 km out of which 3.3 kilometres have been renovated in 2001-2003 and some 10 kilometres in 2006-2007. Different lengths of used pipeline materials and age of the network have been presented in Table 10.5.4.
Table 10.5.4: Water Supply Network in city of Orhei.
DN
< 10 years, km 0.1 1.0 0.1 0.9 1.3
10-20 years, km 2.2 1.4 7.5 1.1 1.0 1.4 0.3 2.4 2.5 19.8
20-30 years, km 0.1 1.0 1.0 1.2 0.8 0.3 0.5 14.9 17.7 37.5
30-60 years, km 51.3 15.3 37.3
Total km 53.7 18.7 45.9 3.2 3.1 1.7 0.8 17.3 20.2 164.6
Steel 15-40 50-100 125-300 Cast Iron 15-32 40-63 150 Polyethylene 50 100-150 200-300 Total
3.4
103.9
In addition to above mentioned table there are approximately 10 kilometres of old steel and cast iron main water distribution pipelines replaces with polyethylene pipelines in 2007.
10.5.3.2
Pumps and valves within all water intakes and pumping stations PS1, PS2 and PS 5 are recently replaced and in reasonable good condition. Regarding pumping stations and pressure mains in most critical condition is pumping station PS7 which deliver water to southern pressure zone. In addition to that Apa-Canal has shelf estimate that first nine (9) kilometres of pressure pipeline from PS5 to PS6 (pipeline from natural spring water intake) should be replaced and the PS6 renovated (including water reservoir) in the near future. Dilution and dozing of chlorination chemical is carried out manually. Water reservoirs within PS2, PS3, PS4 and PS 8 have recently been renovated while reservoirs within PS2 and PS 7 are in need of renovation.
rao1e 2005-01-17
SWECO INTERNATIONAL
During the past six (6) years the water distribution network has partially been renovated and some 13.5 kilometres of old steel and cast iron pipelines have been replaced with new polyethylene pipelines. However, some 35% of the network is still made of steel being older than 40 years. Orhei Apa-Canal has reported several problems with old pipelines. The highest rate of bursts has been reported to take place within old cast-iron pipelines installed at 1960s and 1970s. An-accounted water losses in 2006 constituted 568,000 m3 (52% from the water volume pumped to the distribution) out of which some 80 % were reported to be leaks from the network (reported by ApaCanal of Orhei). The main cause of water losses are often bursts in water network due to wear of very old pipelines. In addition to that valves are worn out and dont assure necessary grade of closure. The most of the network is almost 50 year old and made of steel and cast iron and basically newer been renovated. During years 2004 and 2007 Apa-Canal has renovated some 13 km of main water supply pipelines including connections to some 25 multi-storey buildings and administrative buildings in the city centre. However, still according to Apa-Canal some 22 km of main network should be renovated within the near future. Also the 20 km long pressure pipeline from natural spring water intake area to Orhei should be replaced (first nine (9) kilometres reported to be in critical condition). Together with renovation of the existing network the main focus shall be paid to connect existing two (2) different pressure zones so that northern zone which currently is supplied from deep well could also been supplied from natural spring water intake. This could be possible by implementing some 7 km long pressure pipeline connection from southern pressure zone to PS2 which serves the northern pressure zone. In addition to that the water supply network should be extended so that all (100 %) inhabitants in Orhei would be connected to system (currently some 90 %).
10.5.3.3
rao1e 2005-01-17
The deep well water intake area Mitocul Vechi included totally 15 wells and has a total design capacity of 9,000 m3/day. However,
SWECO INTERNATIONAL
currently only five (5) of 15 wells are operated (with capacity of 3,000 m3/day in total) and only infrequently. In 2006 the operating time for these 5 wells was only 165 hours in total while produced water amount was only some 3,000 m3/year in total. The deep well water intake area Gradina Publica includes totally three (3) wells and has a total design capacity of 2,640 m3/day. Currently all 3 wells are operated and in 2006 the operating time for these 3 wells was 13,100 hours in total while produced water amount was 1,020 m3/day in average (370,000 m3/year). The natural spring water intake has design capacity of 5,000 m3/day, which would be enough to supply all the needed water for city of Orhei. However, in 2006 the pumping station PS5 at water intake delivered water only some 560 m3/day in average (205,000 m3/year). Both pressure zones (northern and southern) are supplied 24 hours per day. The only water treatment process used is chlorination to underground water reservoirs within PS2. Dilution of solid chlorine is done manually while dosing of chlorine solution is done automatically by using dosing equipment. Pumped water flows are not metered and operation is not monitored automatically. Pumped water amounts are calculated from operating times of different pumps. According to the analysis from past years the quality of supplied water from natural spring is good and corresponds to set Moldavian norms for drinking water. The quality of water pumped to distribution from deep wells located at Mitocul Vechi is suffering from high ammonia concentration which originates from use of fertilizers in agriculture. Also the amount of silicates and strontium has been measured to be over set limits by Moldavian authorities. The water quality at Gradina Publica is better than at Mitocul Vechi but has also rather high ammonia concentration. Also concentration of chlorides is considerably high and strontium concentration over limit values. At the moment the capacity of natural spring is sufficient to produce the needed water amount for the whole city of Orhei. However, pressure pipeline from natural spring is connected to southern pressure zone at the end of network and it is not possible to transfer
rao1e 2005-01-17
SWECO INTERNATIONAL
enough water from this pipeline to northern pressure zone via southern pressure zone water distribution network. In order to connect both of pressure zones to natural spring water intake it is necessary to construct new approximately 7 km long pressure pipeline which shall connect pumping stations PS7 and PS2. In that case both of existing deep well water intake areas could be taken out of operation. Still, deep well area Gradina Publica should be renovated to act as a reserve for natural spring. Beginning of year 2007 there were 8,340 connections equipped with water flow meters. 70 % of inhabitants are living in houses equipped with household-meters. According to Apa-Canal all business utilities in Orhei were having flow meters installed. 64% of all used meters were type MOM or NB. The energy efficiency for different water distribution pumping stations was calculated based on available data presented by Orhei ApaCanal and given pump design parameters. Total energy consumption of for pumping stations (including water intakes) for water supply system in 2006 was 900,000 KWh 3 while the pumped water amount was approximately 2,120,000 m3. The average used energy consumption was 0.42 kWh/m3. According to preliminary energy efficiency analysis all pumping station are running with reasonable good energy efficiency. 10.5.4 Sewerage System
10.5.4.1
Present System
The main sewerage network is from 1960s and 1970s having length of approximately 50 km. Gravity sewers arte made of asbestos, ceramics and concrete while pressure mains are maid of cast iron and steel. Network consist three (3) district pumping which are all renovated (or will be renovated) by the end of year 2007. Only some 50 % of all inhabitants in Orhei are currently connected to sewerage network.
rao1e 2005-01-17
Water intake Mitocul Vechi was not included thus data presented from ApaCanal was not understandable (pumped water amount only 4,100 m3 while energy consumption was 248,000 kWh).
SWECO INTERNATIONAL
WWTP, taken into operation in 1976, has a design capacity of 10,000 m3/day and consists the following treatment units: Grit chamber; Primary sedimentation tanks; Biological filtration (filtrate material gravel); Secondary sedimentation; Sludge handling in sludge drying beds; Contact stabilization for effluent wastewater (chemical adding is not in use); - Sludge pumping stations; and - Chlorination plant (not in use). At present the reported wastewater flow to the treatment plant is some 2,300 which is only some 23 % of design flow of the plant. In general, WWTP has no any grit removal or screening (grit removal has not sufficient capacity or proper equipment and is basically not in use) and the existing primary clarifiers are in a very poor condition. However, due considerably low influent flow the biological filtration and contact stabilization the WWTP works somehow satisfactory and reported effluent quality has been considerably good. Still, the most parts of the treatment plant needs complete renovation.
10.5.4.2
The main sewerage network is more than 30 years old and has newer been renovated. The main materials used are asbestos and ceramics pipelines. The existing sewerage network (excluding existing three (3) district pumping station) could be considered to be in a poor good condition. However, within this study any conditional analysis has not been carried out and it could only be estimated that at least proper flushing of pipelines, emptying of manholes and replacement of poorest condition sections (some 7 kilometres of ceramics pipelines and some 4 km of steel pressure mains) of the network will be needed. Still, the sewerage network covers only some 50 % of inhabitants and some 16,000 inhabitants are currently not connected to the sewerage system. In order to provide proper sanitation services for all inhabitants in the city of Orhei the first priority regarding investments in sewerage system would be enlargement of the network to cover as many water consumers as possible. This would mean some 40-50
rao1e 2005-01-17
SWECO INTERNATIONAL
kilometres of new sewerage network and tentatively 1-2 new district sewerage pumping stations. For the proper monitoring of sewerage network the renovated district sewerage pumping stations should be in the future be connected to centralized control system SCADA. Existing Wastewater Treatment Plant is in need of complete renovation. Taken into consideration the condition of existing structures and machineries and insufficient process technology it could be recommended that the whole treatment plant will be replaced with new modern and more compact WWTP taken into account current and future wastewater flows and loads. For new WWTP there is a possibility to use area reservation and existing unfinished process units on the existing plant site. In 1989 Apa-Canal started works at WWTP to enlarge the treatment process. Still, works were soon stopped and only some 30 % of civil works were finished. In order to evaluate the usability of these constructions in the future the proper conditional analyses should be carried out first. In addition to above mentioned the existing WWTP is located on very high level and wastewater is currently pumped to the treatment plant from the city centre from some 100 meters lower level causing very high energy consumption. During the next project phases it would be feasible to find a new location for WWTP from lower ground level so that most of the produced wastewater could be led to the treatment plant by gravity. This would bring considerable savings in pumping costs of raw wastewater from the city districts. Apa-Canal has tentatively studied four (4) different locations (all places located on same area some 1-2 km west from the city centre) for new WWTP. In addition to that, in 2006, city of Orhei has made agreement with Moldavian-Czech construction company Boncom SRL for reconstruction of existing WWTP. According to this agreement the design work for this contract should take place in 2007. However, at this time the situation regarding this issue was not clear and it was indicated by Apa-Canal that the contract with Boncom SRL was postponed. It shall be noted that within this study only visible conditional analysis were carried out and proper analysis of existing structures would be needed during the next project phases.
rao1e 2005-01-17
SWECO INTERNATIONAL
10.5.4.3
Sewerage pumping stations SPS 1 ans SPS 2 delivers wastewater to pumping station SPS3 which delivers wastewater to the WWTP. SPS1 have two (2) new (2007) installed centrifugal pumps with capacity of 80 m3/h each. SPS 2 have one (1) new (2007) installed centrifugal pumps with capacity of 304 m3/h. Both sewerage pumping stations SPS1 and SPS2 operates depending on the quantity of the incoming wastewater. District pumping station SP3 2 have two (2) new (2006 and 2007) installed centrifugal pumps with capacity of 430 m3/h each. The wastewater volume received at WWTP in 2006 was 2,300 m3/day on average, being only some 23 % of the design capacity. Current grit removal is not sufficient for proper treatment of wastewater. Also primary clarification is not operated properly (retention time for wastewater is several days and removed sludge amount is very small). Biological filtration is in a rather poor condition but is working satisfactory. Still, due a rather poor condition of process units and very long retention times in primary and secondary sedimentation units the proper treatment of wastewater is very difficult. Treated wastewater is led to biological pond before discharging into the recipient. Retention time in the pond is very long and due evaporation the amount of discharged wastewater is considerably small. Only used mechanical equipments at WWTP are pumps for sludge pumping from primary and secondary sedimentation basins. Pumps are used for pumping sludge from basins to sludge stabilization bonds. The effluent quality in 2006 according to the information received from the city of Orhei has been presented in the Table 10.5.5.
Table 10.5.5: The effluent quality at Orhei WWTP in 2006 (monthly average).
Parameter SS Dry residuals BOD5 Chlorides Ammonia Nitrites Nitrates Fe

Unit mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l
rao1e 2005-01-17
Inlet concentration N/A N/A N/A N/A N/A N/A N/A N/A
After treatment 533 1,667 233 247 36.2 0.08 1.04 1.9
Requirement 5 1,000 3.0 300 0.5 0.08 40 0.5
304
SWECO INTERNATIONAL
Thus the very low influent flow and considerably poor condition of used process units and insufficient process control the proper operation of WWTP is not possible. The wastewater quality does not meet the requirements set by Moldavian authorities. The energy efficiency for different sewerage pumping stations was calculated based on available data presented by Orhei Apa-Canal and given pump design parameters. Total energy consumption of pumping stations SPS1, SPS2 and SPS3 in 2006 was 530,260 KWh while the pumped wastewater amount was approximately 1,400,000 m3. The average used energy consumption was 0.38 kWh/m3. Above mentioned efficiency is calculated based on use of old pumps. It shall be noted that all above mentioned pumping stations are renovated in 2007 and most probably current energy efficiency of SPS1, SPS2 and SPS3 is better than presented. However, preliminarily estimated efficiency of 0.38 kWh/m3 is already considerably good. 10.5.5 Prioritising of needed Investments for years 20092013
10.5.5.1
In order to prepare preliminary water demand and wastewater projections the water and wastewater flows were analysed for the last three (3) years (20042006). Preliminary water demand and wastewater projections for the year 2013 are based on general assumptions as follows: - The connection rate to the water supply network is 100 %; - Per capita consumption in Orhei in 2013 is 140 litres/capita/day; and - The connection rate to the sewerage system is 80 %. In addition to above mentioned, some assumption related to rehabilitation of the water supply network were made as follows: - Due repairing and maintenance work and installation of new pipelines for new housing areas the amount of leakages from the water supply network have estimated to decrease some 30 %;
rao1e 2005-01-17
SWECO INTERNATIONAL
- Due installation of new in-house flow meters and due better accounting system amount of unaccounted water is estimated to decrease some 20 % (billed water demand per capita will increase); and - Due better in-house flow measurement and possible increase in water tariffs per capita consumption has estimated to decrease some 15 %. Preliminary water and wastewater flow projections for Orhei are summarised below in Table 10.5.6.
Orhei Population connected to the Water Supply network Population connected to the Sewerage network Water pumped to the Distribution Non-Revenue Water Average total flow to WWTP
10.5.5.2
Needed Investments
Investment need estimations are done for the period of years 20072013 in order to secure sufficient operation of water supply and sanitation systems and to provide water supply and wastewater treatment for more inhabitants in Orhei. Preliminarily estimated short-term investments needed for water supply system are listed below, and serves as a basis for the proposed investment packages: - Connection of southern pressure zone to northern pressure zone in order to supply whole city of Orhei from natural spring water source. This investment requires some seven (7) kilometres of new pressure pipeline from PS7 to PS2; - Rehabilitation of first nine (9) kilometres of pressure pipeline from natural spring water intake area (pipeline between PS5 and PS6);
rao1e 2005-01-17
SWECO INTERNATIONAL
- Rehabilitation of Gradina Publica water intake area to secure water supply in case that quality of water at natural spring dramatically changes; - Continuing rehabilitation of network by replacement of old water mains made of cast iron and steel by polyethylene pipelines (some 22 km in need of urgent renovation); - Rehabilitation of existing water reservoirs within PS2 to secure the quality of supplied water; - Continuing of installation of new in-house water meters; - Construction of new network including water meters for new consumers so that connection rate in Orhei would be 100 %; and - Implementation of automation and control system (SCADA) for water pumping arrangements. In general, both sewerage network and WWTP require urgent rehabilitation and reconstruction works to enable reliable operation of sanitation operations and to fulfil the treatment requirements set for wastewater effluent quality by Moldovan authorities. Preliminarily estimated short-term investments needed for sewerage system are listed below, and serves as basis for the proposed investment packages: - Flushing of existing sewerage network and emptying of manholes; - Reorganising the maintenance of sewerage network including supply of one new vehicle for flushing and cleaning of network; - Enlargement of the network (including 1-2 new sewerage pumping stations) to cover at least 80 % of inhabitants; and - Reconstruction of new WWTP with capacity of 4,100 m3/day (1st stage) with option for enlargement for total capacity of 6,000 m3/day (2nd stage).
10.5.5.3
Preliminary cost estimations for proposed investments packages within water supply and sanitation services are only preliminary estimations and will only be used as help in preparation of suitable investment packages in Feasibility Phase of the project. Proposed investment packages have been prepared so that there are two different packages; 1st investment package for works which shall be carried out in the very near future (within 1-2 years) and 2nd
rao1e 2005-01-17
SWECO INTERNATIONAL
investment package for other works which must be implemented in order to secure the water and sanitation operations in long term: 1st Investment Package: 2.2 million USD in total Renovation of 9.0 km of existing pressure pipeline from the natural spring (between PS5 and PS6) and construction of 7.0 km of new pressure pipeline from PS7 to PS2, 1.1 million USD; Implementation of automation system for water intake and water supply pumping arrangements, 0.1 million USD; and Continuing renovation of water supply system, 1.0 million USD. 2nd Investment Package, 8.0 million USD in total Rehabilitation and extension of sewerage network (including 20 km new sewerage network), 3.0 million USD; and Construction of new WWTP and connection of new WWTP to the existing sewerage network, 5.0 million USD.
rao1e 2005-01-17
SWECO INTERNATIONAL
11
11.1
Rcani
General
Rcani town is located on the river Copaceanca, at a distance of 166 km northwest of the capital Chiinu.
Figure 11.1.1: Location of Ricani
rao1e 2005-01-17
SWECO INTERNATIONAL
The official number of inhabitants in the town is around 14000. According to the deputy Mayor interviewed the real number is estimated to be around 7000, due to emigration to other towns and countries. A few of the persons who emigrated have now begun to return to Rcani and also started some business. From year 2003 there is natural gas in the town and light in the streets and constant water supply. This means that companies now can work in the town. Rcani is also with help of a company from Chiinu developing a strategic plan, which is expected to be finished in 2008.
11.2
11.2.1
History The first water services in Rcani date back to year 1957. The water and wastewater services as well as all other technical municipal services were a section under the local authorities. In December 2003 the present Municipal Enterprise Apa-Canal was established.
11.2.2
The Owner. How the Owner Governs the utility The Town is the only owner of the service utility. The utility consists of one of the departments of the Town Administration. The utility is thus in practice not functioning as a separate company. It is even less free than during the former political system, as the town council now decides about most things. The deputy Mayor interviewed thought anyway that a Municipal Enterprise is better as a state controlled, as important things as tariffs, equipment, and energy anyway must be decided by the town. The Town Council appoints the Director of the utility, and he reports to the Deputy Mayor. Beside almost daily contacts with the owner he presents written quarterly and annual progress reports to the Town Council. Tariffs and consumption norms are approved by the Town Council.
11.2.3
Legal Aspects The enterprise has its own statutes but no separate service agreement with its owner. It has written agreements with all its customers.
rao1e 2005-01-17
SWECO INTERNATIONAL
The Municipality is the owner of all the assets including both water and wastewater facilities. The enterprise operates these facilities. The enterprise has no local regulations to follow in addition to the Moldavian state regulatory framework. 11.2.4 Organization and Management The organization chart for the enterprise is presented below.
Director
Accountant Chief 1 Accountant 2 Total - 3 Water supply and sanitation department Total -36.5
Head of dept-t -1 Engineers -2 Machinists -12 Locksmiths -6 Laboratory technician 0.5 Guardians -5 Cleaner -1
Engineer-Chief
HR Manager, secretary-1 Driver-1 Total - 2 Safeties engineer -0.5 Electrician -1 Total -3.5
Custommers department
Head of department - 1
Storekeeper -1 Engineer-electrician-1
Tractor operator -1 Eexcavator operator -1
Welder -1 Driver -2 Loader -1
Figure 11.2.1: Organization of Rcani Apa-Canal
The director has worked as head of the utility for 2 years. He was working at Apa-Canal also 1985-87. During the rest of his carrier he has mainly worked in the construction business. The utility has no formal management team, but the director meets the heads of departments every week for information, discussions and decisions. They are using a fixed agenda and writing minutes of meetings. The Director has also a short meeting at 08.00 every day with the head of production and other heads of departments for discussing daily issues.
rao1e 2005-01-17
SWECO INTERNATIONAL
There is no modern management information system. The enterprise has one computer. This is used for billing and writing reports. The chief engineer has also access to the computer. There is no software for accounting. At least one more computer is needed for the engineer and technical purposes according to the director. Rcani Apa-Canal has a Business plan. Principals of accountable management or management by objective are not known. The heads of departments have to follow a given budget but they have no delegated rights or real tools enabling them to follow the budget. There exists a form of incentives for workers decided ad hoc by the director. For instance if the director judges a certain job to need 3 workers to do during a certain time, he prefers to agree with two persons to do the job during the same time. They will then get 50% of the wage for the third worker. This form of remuneration represents some 20-50% of the wages. Also heads of departments may get some sort of bonus but less then workers. 11.2.5 Staff. Efficiency and training needs The total number of personnel in the enterprise is now around 50 of which 13 working with administration. The number of connections to the water system is 2198 resulting in a productivity of 44 connections per employee. The number of households connected to water services is approximately 5500. Information about the number of business and budget organizations is not available. The productivity in the water services is therefore around 110 household customers per employee. Most of the heads of departments, engineers and specialists have an education in the right area for their work, although the level might need to be improved as well as modern technique and management. The utility has no elaborated plan for training of the personnel, but expressed a need for training of both technical and financial personnel.
rao1e 2005-01-17
The personnel are working more efficiently than a few years ago. The utility has been able to employ good production people. Workers
SWECO INTERNATIONAL
decide for instance on their own initiative to work over time, if needed, in order to repair a leakage. The personnel turnover was two, three years ago 30-40% per year. This situation has clearly improved and in 2006 only two persons left the company. The personnel have no training in using computers. For instance the accountant will need training when the company has got software for accounting. Also all levels of production personnel need training. The company has no written plan for training but is interested in supporting all needed training. The Director expressed also an open attitude to all proposals relating to institutional changes, thus not only to physical investments. Latest major investment was carried out in 2006 when 9 km water pipes were repaired for 3.3 million leis. People from Apa-Canal and the town council organized and managed the project without external support. The average salary was raised with some 30% during the last two years and is now around 1700 1800 lei per month compared to some 1000 leis for all population in the town. This is enough high for attracting and keeping important staff. 11.2.6 Estimation of Consumption. Billing and Collection 75% of the households and 100% of the households and budget organizations have meters. The customers buy and repair the meters on their own account. Consumption norms are used for 25%. The norm is 3.6 m3 per family member and month. People are interested in getting meters, as this normally is cheaper for them due to reduced consumption. Pensioners without meter can consume up to 3.6 m3 but pay only for 1 m3. Veterans and a few other groups may get subsidies from the Town Council. Four meter readers from Apa-Canal read monthly the meters during the second half of the month and note then also in the customers notebook the quantity consumed and the amount to pay. The customers have then to pay at latest the 10th the following month. Payment is possible only at Apa-Canal. As soon as billing is computerized, Apa-Canal will sign an agreement with post and bank offices making it possible to pay also their.
rao1e 2005-01-17
SWECO INTERNATIONAL
The collection rate has improved from 30-40% two years ago to approximately 70% and continues to improve. The utility has begun to use different kinds of means to improve the collection rate radio and TV information, warnings, suing customers to court and as a last mean disconnection. Court procedure was going on for two companies and two households during the Consultants collection of data for this report. 20% of the customers are presently disconnected. Customers in apartment buildings are difficult to cut off with the present technical system. 11.2.7 Relations to customers and other stakeholders Apa-Canal is as mentioned under 12.2.6 using radio and TV for information to the customers. It happened earlier also that school classes came to utility, but there are no plans for that now. Meter readers are also informing about the utility when visiting customers. There is no internal or external quality programme defining for instance issues such as quality of water and sewage service, quality of public relations, water demand management and environmental questions. 11.2.8 Consultants Comments The utility seems to have improved considerably during the last two years. The business plan mentioned under 12.2.4 and prepared should be yearly updated. The staff efficiency, 44 connections per employee and 110 households (number of customers except for business and budget organizations) per employee is average level among the utilities studied. With only one computer the company must raise its IT level. The rate of meters, 75% for the population and 100% for companies and organizations, can be further improved. The collection rate, improved from 30-40% to 70% during the last years, has to be further improved. Further comments, see section 15.
rao1e 2005-01-17
SWECO INTERNATIONAL
11.3
11.3.1
Social environment in Rcani
11.3.1.1
Population
Number of population for Rcani town as at 1st of January 2007 is the following:

(Thou.) 14.8 13.8 1 14.55
11.3.1.2
Education system of the town is formed of general medium school, two high schools, a polyvalent school and an agro-industrial college. Public health system is ensured by a preventive medical Centre, town hospital, a clinic and 6 pharmacies.
11.3.1.3
Estimation of Household Revenues Average nominal monthly salary - National level Average nominal monthly salary - Rcani County Disposable household income (national average per household member) Average monthly pension (national level) Average household disposable income in the county (per member) Lei Lei Lei Lei Lei
Rcani 2004 2005 1,103.1 1,318.7 616.0 767.5 491.4 325.3 274.4 568.6 383.4 330.9
rao1e 2005-01-17
SWECO INTERNATIONAL
Average monthly pension at county level Number of persons in household Average household (no of persons) Pensioner household (no of persons) Average household disposable income in the county (per household) Average monthly pensioner household revenues at county level (per household)
Lei
181.7
223.1
No. No. Lei Lei
3.0 1.8 823.2 327.0
3.0 1.8 992.8 401.7
11.3.2
Economic environment in Rcani
11.3.2.1
Natural resources
Water resources of the town contain a lake, three springs and 322 fountains.
11.3.2.2
Total length of roads is 101.4 km, out of which 27.8 km are covered with a rigid surface. Recently, the town was connected to the gas network, having coverage above 90%.
11.3.2.3
Industry
Volume of industrial production in Rcani Raion, compared to the total industrial production in Republic of Moldova, is presented in the following table:
Table 11.3.3: Volume of Industrial Production Evolution Rcani Raion
Volume of industrial production in 2006 Total out of which Rcani

rao1e 2005-01-17
SWECO INTERNATIONAL
Total production on Republic of Moldova increased with 26% during the 2004-2006 periods. For Rcani Raion, the production increased significantly with 61%, demonstrating an improvement of the local industry environment.
11.3.2.4
Financial situation of Commercial Companies in Rcani Raion, compared to the total financial situation of Republic of Moldova, is presented in the following table:
Jan.-Sept. 2004 Total Rcani

29423 11289 13906 572786 2790 53031 19140 61291 238 128 107 9189 -0.2 138.3 38.7 197.5

31870 12380 14893 570143 3424 66870 22717 68420 266 135 124 7745 11.2 202.6 42.2 200.9

34700 13155 16532 569698 3689 79052 26867 81804 304 169 127 7209 8.7 225.7 54.2 258.7
As can be observed from the table above, the number of profitable enterprises increased at national level, but the percentage of profitable enterprises in total reporting enterprises remains approximately the same (46%). Same situation was recorded in Rcani Raion, the percentage of profitable enterprises being of approximately 55%. Average number of employees at national level kept a stable trend. In Rcani Raion, during the analyzed period, the average number of employees registered a considerably decrease of 22%.
rao1e 2005-01-17
SWECO INTERNATIONAL
Financial result before tax recorded a negative value in 2004. For 2005 and 2006, financial result had a value of 11.2 mil lei, respective 8.7 mil lei. Sales revenues increased during the analyzed period, from 138.3 mil lei in 2004 to 225.7 mil lei in 2006, meaning a 63% percent growth. Receivables related to commercial invoices and budget compensation recorded a stable increase of 9% in 2005, respective of 28% in 2006. Debts kept a stable evolution in 2004 and 2005 (approximately 200 mil lei), and continued with an increase of 28% in 2006, when compared to 2005.
11.4
11.4.1
Financial Aspects
11.4.2
11.4.2.1
Table 11.4.1: Operating result evolution - Rcani
Operating result for the year Amounts in thou. USD Operating revenues Sales Revenues from services Other revenues
rao1e 2005-01-17
2004 88.1 70.4 7.9 9.8 139.0 -
2005 140.2 119.2 5.4 15.5 151.5 9.9
2006 138.8 122.1 1.5 15.2 141.6 11.9
Operating costs Material expenses
SWECO INTERNATIONAL
Operating result for the year Amounts in thou. USD Third parties services Personnel expenses Salaries Social insurance taxes Other costs for water and sewerage Depreciation Energy cost Costs related to other activities Operating result
Source: Water Utility from Rcani
2004 139.0 (50.9)
2005 53.7 41.7 12.0 0.3 9.8 30.3 47.5 (11.4)
2006 39.8 31.1 8.7 4.9 9.7 24.1 51.2 (2.8)
In 2006, approximately 34% of the operating revenues result from water supply and 54% from wastewater operations. The total operating result is negative for the entire period of analysis with an improvement tendency in 2006. The evolution of the structure of operating revenues is presented in the following chart:
Figure 11.4.1: Structure of Sales - Rcani
Structure of Sales
80.0 70.0 60.0
Thousand USD/y
The level of revenues increased in 2006 because the invoiced quantity for wastewater, correspondent to larger tariffs, increased and the tariffs also increased in 2006. The evolution of the water losses is presented in the table below:
Table 11.4.2: The Evolution of Non Revenue water 2004-2006 - Rcani
rao1e 2005-01-17
Non revenue water
2004 Th. m3
2005 Th. m3
2006 Th. m3
SWECO INTERNATIONAL
Pumped water Invoiced water Losses

163.2 66.3 -59%
152.9 51.6 -66%
-6% -22%
150.0 55.5 -63%
-2% 8%
The level of non-revenue water is important and the utility will try to decrease the losses in the following years. One of the main purposes of the investment promoted with financial resources from The World Bank loan is to decrease the water losses. The evolution of invoiced quantities is presented in Table 11.4.3. Water consumption decreased in 2005 with 22%, followed by an increase of 7.6% in 2006. For wastewater, quantity increased during the period, especially due to the increase of wastewater delivered to private companies and institutions. The weight of water delivered to companies and institutions is 20% in total invoiced water).
Table 11.4.3: The Evolution of Invoiced quantity 2004-2006 - Rcani
2004 Th. m3 66.3 54.1 12.2 59.9 31.6 28.3
2005
2006 % 7.6% 15.0% -14.7% 8.8% 6.0% 11.3%
Th. m3 % Th. m3 51.6 -22.2% 55.5 38.7 -28.5% 44.5 12.9 5.7% 11.0 60.3 0.7% 28.3 -10.4% 32.0 13.1% 65.6 30.0 35.6
Because the level of tariff for companies and institutions is significantly higher than for domestic customers, these entities have the tendency to find water from other sources (have their own sources) and to pay only sewerage services to the utility. The delayed adjustment of tariff compared with the cost increases had a negative impact on the performances of the water utility. The water utility can not control the tariff adjustment process, which is the prerogative of the Local Council. The water utility can propose tariff increases based on cost increase but the final decision is taken by Local Council.
rao1e 2005-01-17
SWECO INTERNATIONAL
The evolution of the structure of total operating costs is presented in the following chart:
Figure 11.4.2: The Structure of Operating Costs - Rcani

Structure of operating direct cos ts
18.5%
26.7%
E nergy
10.8%
O ther costs
44.1%
The most important cost elements are personnel costs (wages, salaries and related taxes), which represents 44.1% of operating expenditures in 2006 and energy costs, which represents about 26.7% of operating expenditure in 2006. The weight of energy costs has decreased during the period. The salaries have increased in nominal terms every year. The increase of salaries has to be performed based on premises stipulated in the law regarding evolution of salaries in the public sector. This element is more or less not under the control of the water utility. The evolution of operating costs is presented in the following chart:
Figure 11.4.3: Evolution of operating costs - Rcani
rao1e 2005-01-17
SWECO INTERNATIONAL

60.0 50.0
Thousand USD/ye
40.0 30.0 20.0 10.0 E nergy P ersonnel (salaries and related taxes) O ther costs 2005 2006
The evolution of operating costs highlights the prudent policy regarding expenditures in the last years due to lack of financial resources.
11.4.2.2

Table 11.4.4: The Level of Account Receivables as at December 31, 2006 - Rcani
31.12.2006 USD % 3,994 29.2% 6,887 50.3% 2,803 20.5% 13,683 100.0%
The management of the company needs to have among its priorities the increasing of the collection level. The level of short term liabilities has decreased in the last years. The actual management of the utility has succeeded to pay some of the current liabilities generated in the last year but the total level is relatively high. A breakdown of the short-term liabilities is presented in the following table:
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 11.4.5: Evolution of short-term liabilities (amounts in Thousand USD) - Rcani
2004 112.3 12.3 19.2 69.8 11.0 -
2005 123.3 13.7 20.0 80.0 9.7 0.1
2006 102.2 2.0 14.7 76.2 9.3 -
Table 11.4.6: Aging of liabilities to social fund - Rcani
31.12.2006 USD % 719 0.9% 0.0% 75,464 99.1% 76,183 100.0%
Table 11.4.7: Aging of liabilities to state and local budgets - Rcani
31.12.2006 USD USD 1,375 14.8% 2,475 26.7% 5,423 58.5% 9,273 100.0%
11.4.2.3
Tariff analysis
Historically, tariff levels have been effectively imposes by the Ministry of Communal Services and Territorial Development. Because of the institutional restructuring and decentralization, the utility may increase the tariffs without the approval of the central authorities but with the approval of the local authorities (municipality) and ANRE. The domestic tariff level is calculated based on the total cost per cubic meter plus a profit allowance (between 5-10%). Changes would be applied following significant increases in costs, mainly electricity.
rao1e 2005-01-17
SWECO INTERNATIONAL
The evolution of invoiced quantity, the increase of prices for energy and the increase of salaries should have been the main factors affecting the evolution of tariffs. The tariff evolution of the water tariffs for the last years is presented in the following chart:
Figure 11.4.4: Water Tariff Evolution - Rcani
2.00 1.80 1.60 1.40 D estic om custom ers 1.02 1.02 1.00 1.00 Instutions 0.61 0.37 0.36 1.83 1.83
USD/m
1.20 1.00 0.80 0.60 0.40 0.20 -
2004
2005
2006
The last tariff increase for water services was in June 2006. Water average tariff for 2006 increased with 77% for domestic customers and 91% for institutions and private companies. The tariff evolution of the waste water tariffs for the last years is presented in the following chart:
Figure 11.4.5: Sewerage Tariff Evolution - Rcani

1.80 1.60 1.40 1.20 1.53 1.53
D estic om custom ers 0.92 0.92 0.90 0.90 P ublic Institutions 0.53 0.42 0.41 C m om ercial custom ers
USD/m
1.00 0.80 0.60 0.40 0.20 -
2004
2005
2006
rao1e 2005-01-17
Sourc e: Water Utility from Rcani
SWECO INTERNATIONAL
For domestic consumers, average tariff has increased with 34%, while for companies and institutions, average tariffs increased with 77%. For the future the utility should consider the possibility and to take all the necessary actions to adjust the tariff more often to avoid the negative effects of the cost increases due to the inflation. In the future the water utility will have to cover also the possible debt service related to the loan from the World Bank. Briefly, the methodology for approving tariffs consists of the following steps: The utility specialists are preparing a study for tariff adjustment
- The study is sent to the Local Council and ANRE for approval. According to the management team of the utility, the level of approved tariff is usually lower than their request. The management team considers that a tariff increase will solve most of the financial problems of the utility. One of the most wide spread idea about tariff increase in Moldova is to increase more of tariffs for private entities and institutions and to increase less the tariffs for inhabitants. In most of the cases this is mainly a political decision with the purpose of maintaining a lower pressure on the domestic customers. This approach leads to an increase of the cross-subsidization between entities (private companies and institutions) and inhabitants. This discourages the economic development.
11.4.2.4
Even if the utility has recorded achievements in the last years, financial management is still far from the requirements of a modern utility. A lack of skills and human resources leads to limitations in the activities performed by the Finance Department. The accounting department consists of 3 specialists. At the end of 2006, company bought a computer but it is not used for book keeping. However, they want to use it for book keeping.
rao1e 2005-01-17
SWECO INTERNATIONAL
The financial management is limited to good management of payments, and is unable to give effective support to the overall management decision-making process, particularly the good management of the growth potential. Without minimizing the technical and implementation problems that the utility has to face in the near future, the financial planning area is most in need of enhancement and restructuring efforts. We recommend the introduction of cost accounting by creating cost centres for the main activities (water and sewerage). There is important to find out the performances of each sector. We recommend the extensive use of computer for financial management. Accounting, billing and collection, financial forecast are just a few items which can be performed more efficient by using a computer. Even if the utility has only one computer, its degree of usage is still very low. The process of financial planning does not include all the parties that should be involved with financial planning matters and has not the necessary prediction-correction role. The management team of the utility has to prepare a long-term strategy to assure the sustainable development. This analysis can be used as a starting point in preparing this strategy. Without a clear strategy for sustainable development of the activity, the utility continue to survive but with very limited potential and lower and lower performance. 11.4.3 Financial Selection Criteria By applying the criteria mentioned under section 2.4.3, the scores obtained by the water Operator from Rcani are presented in the following table:
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 11.4.8: Scores for the Water Utility from Rcani
The results are analyzed in the final conclusions chapter when the decision regarding the introduction of Rcani in the 10 list towns is analyzed.
11.5
11.5.1
Technical Aspects
Specific Task Objectives Related to Technical Analysis The specific tasks of this sub assignment for the Pre-Feasibility Phase were clarified together with the Client in the beginning of the assignment. The tasks agreed were as follows:
rao1e 2005-01-17
SWECO INTERNATIONAL
To prepare water and wastewater balances for 15 target towns to describe the present situation and water and wastewater projections for the year 2013; to assess the present status and condition of present water supply and sanitation facilities in 15 target towns in order to evaluate the need for replacements and/or needed rehabilitation on short-term basis; and to prepare preliminary short-term investment program for years 20092013 for the 15 target towns in order to improve ad develop the present functional level of their water supply and sewerage services.
11.5.2
Water supply and sewerage in Water is supplied via one (1) main water supply network, having length of approximately 35 km. Only some 3,130 inhabitants out of 14,800 are currently connected to the water supply network while more than 11,600 inhabitants are dependable on private wells. Water intake consists of seventeen (17) deep wells, out of which nine (9) wells are under renovation or taken out of use while eight (8) wells are in operation. Water storage consists of three (3) water towers and one (1) underground water tank. Seven (7) deep wells out of eight (8) operated well are used to supply water to water towers and underground reservoir, while one (1) deep well is connected directly to the network. Water pumped from deep wells has no treatment at all. Due to good bacteriological indices, water is chlorinated only once per month. Chlorination is done manually by dozing chlorine solution directly to the water reservoir or directly to the network. The total length of main sewerage network is 17 km. Sewerage network has two (2) pumping stations out of which one (1) is the inlet pumping station for the WWTP, which is located some 1 km south from the town centre. Only 1,070 inhabitants out of 14,800 are connected to sewerage network while rest are using septic tank system or dry lavatories. However, the number of septic tank users is not known. The wastewater treatment plant was taken into operation in 1964 representing complete biological treatment process. At present, the treatment plant is in use. Still, due a very bad condition of existing
rao1e 2005-01-17
SWECO INTERNATIONAL
process units and machineries and insufficient process control the plant is working with very low efficiency. In the following sections the water and wastewater balances and the technical status of water supply and sanitation facilities as well needed investments on preliminary level have been described in detail. 11.5.3 Water Supply System
11.5.3.1
Present System
Water intake consists of seventeen (17) deep wells, out of which nine (9) wells are under renovation or taken out of use while eight (8) wells are in operation. Every operated deep well has a submersible Moldovan made pump, type ECV (see Table 11.5.1). Water storage consists of three (3) water towers and one (1) underground water tank. The total capacity of water intake is 1,370 m3/day. Approximately 3,130 inhabitants out of 14,800 are currently connected to the water supply network.
Table 11.5.1: Submersible pumps used for water intake (only wells which are in use are presented)
No of well Well no.1 Well no.2 Well no.3 Well no.5 Well no.9 Well no.13 Well no.15 Well no.16
Pump type ECV-6-10-185 ECV 6-10-185 ECV 6-10-185 ECV 6-10-235 EVC 6-10-185 6-10-185 EVC 6-10-235 EVC 6-10-235
Head (H, design), m 185 185 185 235 185 185 235 235
Flow (Q, design), m3/h 10 10 10 10 10 10 10 10
Deep wells are situated in different parts of the town. Seven (7) operated deep wells pump water to water towers (3 separate towers) and to underground water reservoir (1 unit), as follows: - two (2) deep wells pump water to one (1) water tower with capacity of 25 m3; - three (3) deep wells pump water to the underground tank with capacity of 300 m3; and
rao1e 2005-01-17
SWECO INTERNATIONAL
- two (2) deep wells pump water separately to two (2) water towers with capacities of 25 m3 each. The eighth deep well pumps water directly to the network. At present, the quality of water from the most of deep wells does not correspond to Moldovan Normative on Potable Water main reason being high ammonia and fluorine concentration (see Table 11.5.2).
Table 11.5.2: Analysed water quality provided by town of Rcani (average value for all used deep wells together)
Parameter Colour Turbidity Odor Taste pH Hardness Dry residuals Nitrites Chlorides Sulphates Copper Fe Ammonia Fluorine Coli form
Unit grade mg/l grade grade Mol/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l bact/l
Requirement 20 1.5 2 2 <9 7 1,000 45 350 500 1.0 0.3 2.0 1.2 <3
Actual 15.0 0 0 0 7.7 1.2 1200 0 40 345 0.15 0.05 2.4 1.2 <3
According to the analysis carried out by Ministry of Health of Moldova, the concentrations which exceed the limit values are measured from deep wells No. 1, 2, 3 and 5. However, according to Apa-Canal water from these wells could be used as potable water if it is first diluted by water from other wells. Basically the whole network is supplied by gravity from water towers and from the underground water reservoir. Only one (1) deep well pumps water directly to the network and is used only to cover peak demands. Water distribution network consists of steel, cast iron, asbestos and polyethylene pipes. The range of diameters is from 50 mm to 150 mm. The total length of network is 31.2 km. Different lengths of used
rao1e 2005-01-17
SWECO INTERNATIONAL
pipeline materials and age of the network have been presented in Table 11.5.3.
Table 11.5.3: Water Supply Network in town of Rcani.
DN Steel 50 100-150 Sub-total Cast iron 50 Asbestos 150 Polyethylene 50-75 90-140 Sub-total Total
< 10 years, km
10-20 years, km
20-30 years, km
30-40 years, km 1.8 4.0 5.8
40-50 years , km 1.7 1.7 3.1
> 50 years, km 1.0 1.3 2.3
Total km 2.8 7.0 9.8 12.7
2.0
7.6
2.5 2.2 6.0 8.2 1.2 1.2
2.5 3.4 6.0 9.4 34.4
11.5.3.2
In General, centrifugal pumps and other mechanical equipment are in a very poor condition. Most of the mechanical parts are worn out and old pumps are working at a decreased efficiency rate. Only five (5) deep wells out of seventeen (17) has protection area. There are no adequate protection areas for other wells. Water meters and manometers are installed at every deep well. Water towers are in good condition, being renovated in 2006. There is no information on condition of underground water reservoir. In 2006, the water distribution network has partially been renovated and some kilometres of old cast iron and steel pipelines have been replaced with new polyethylene pipelines. However, most of the network is still made of steel being older than 30 years and only 9.4 km of the network is covered by polyethylene pipelines. Apa-Canal has reported several problems with old pipelines. Reported problems have been presented in the Table 11.5.4.
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 11.5.4: Reported problems within water distribution network.
DN 50-100 150-200 300
Burst 20 25
Fissure 85
Unaccounted water losses in 2006 constituted some 94,000 m3 (63% from the water volume pumped to the distribution). The main cause of water losses (51.4% from all losses) are often bursts in water network due to wear of the pipes. Another cause is the status wear of interior water supply networks from the basements of the flat apartment houses which are maintained neither by householders nor by communal utility. Together with renovation of the existing network the main focus shall be paid in extension of network in order to provide water supply for more inhabitants.
11.5.3.3
All operated 8 deep wells are run automatically operation being controlled by automation system of type Cascad. Water is supplied average 20 hours per day. The only water treatment process used is chlorination to underground water reservoir. However, the dilution and dozing of chlorine solution is done manually directly to the water tank. There are also 22 points in the water distribution network which could be used for dozing chlorine solution to the network if the water quality dramatically changes. Pumped water flows are metered and operation is controlled automatically. Water pumped to the distribution from several deep wells contains considerably high concentration of ammonia and fluorine. However, the water could be used as potable water in case if it is first diluted by water from other wells. Still, it could be necessary to study alternatives to treat water in order to take ammonia and fluorine out or to find substitutive water sources. In addition to above mentioned, there are plans to connect town of Rcani to town of Balti by new water pipeline. This pipeline would connect Rcani to the water pipeline from town of Soroca. The investment is planned to be financed by the Government of Moldova.
rao1e 2005-01-17
SWECO INTERNATIONAL
However, during the time of this study any financing decisions were not made. Currently the water supply network is not divided into pressure zones. Town is supplied by gravity, pressure range being 2-6 bars. Beginning of year 2007 there were 3,258 water-meters installed, including 17 at deep wells, 3,162 in private houses, 13 at multi-storey houses and 66 in budget institutions and business utilities. The level of consumers within metering covers 99% (from those who are connected to water supply network). Level of metering for institutions and business entities is 100%. All private apartment meters are size of DN 15 while size of meters installed at institutions and organizations vary from DN 15 to DN 50 depending on connection diameter. Energy consumption for operation of water supply system in 2006 was 317,000 KWh. Energy consumption for maintenance of auxiliary buildings in 2006 was 7,428 KWh. 11.5.4 Sewerage System
11.5.4.1
Present System
The main sewerage network having length of 14 km is made of asbestos, steel, cast iron and ceramics pipelines. Network have two (2) sewerage pumping stations out of which one (1) is the inlet pumping station for the WWTP and one (1) is used to pump sewerage from the Hotel area to the inlet pumping station of the wastewater treatment plant. WWTP is located some 1 km south from the town centre. Only 1,070 inhabitants out of 14,800 are currently connected to network. WWTP, constructed in 1964, has a design capacity of 2,400 m3/day and consists the following treatment units: - Grit removal (2 units); - Primary clarification (5 units) combined with primary sludge fermentation tanks; - Aeration tanks (4 units) - Secondary clarification (4 units);
rao1e 2005-01-17
SWECO INTERNATIONAL
Biological ponds for sludge handling (4 units); Sludge final disposal site; Sludge pumping station; and Chlorination plant.
At present the treatment plant is not in use and only wastewater treatment method used is stabilization in ponds before discharging into river.
11.5.4.2
The main sewerage network is from 1970s and 1980s and has not been renovated during past 30-40 years. The main material used are ceramics and steel. Description of the sewerage network has been presented in the Table 11.5.5.
DN Gravity network Steel 300 Asbestos 300 Ceramics 250-300 Pressure network Steel 160 320 Sub-total Cast iron 300 Total
< 10 years, km
10-20 years, km
20-30 years, km 1.8 0.6
30-40 years, km 0.5
40-50 years , km
> 50 years, km
Total km
2.3 0.6
3.8 2.8 1.7 4.5 0.6
1.4
0.6
5.7 2.8 1.7 4.5 0.6 13.7
rao1e 2005-01-17
The existing sewerage network (excluding pumping stations) could be considered to be in reasonable good condition. However, within this study any conditional analysis has not been carried out and it could only be estimated that at least proper flushing of pipelines and emptying of manholes will be needed. Still, the sewerage network covers only small part of the town and only some 21 % of inhabitants are currently connected to the sewerage system. In order to provide
SWECO INTERNATIONAL
proper sanitation services the first priority regarding sewerage system would be enlargement of the network to cover more water consumers. In General, all mechanical equipment within two (2) existing sewerage pumping stations are in a very poor condition. Most of the mechanical parts are worn out and old pumps, valves and pipelines are at the end of their operational lifetime. In addition to that there is no adequate monitoring for operation. The capacity of inlet chamber (10 m3) at district pumping station is not enough to accumulate wastewater and pump works permanently. There is no enough space to install new pump at existing pumping station. Taking into consideration the condition of the pumping station building and machinery, it is recommended to construct a new pumping station according to current wastewater flow. Mechanical equipment at WWTP inlet pumping station is taken out from operation. The pumps used in sewerage system are presented in Table 11.5.6.
Table 11.5.6: Pumps used in sewerage system.
Pumping station Hotel district PS WWTP Inlet PS WWTP Inlet PS
Pump type CM 110/40 TMF 160/40 (3 units) CD 160/40 (6 units)
Pressure Head (H), m 40 40 40
Discharge (Q), m3/h 110 160 160
Only one (out of two existing) pressure pipeline from pumping station to WWTP is in use. However, it is in very bad condition due to the age of pipes. Also, existing Wastewater Treatment Plant is at the end of its operational lifetime. There is no building for air blowers, which operate at the open air. Taken into consideration the condition of existing structures and machineries and insufficient process technology it could be recommended that the whole treatment plant will be replaced with new modern and more compact WWTP taken
rao1e 2005-01-17
SWECO INTERNATIONAL
into account current and future wastewater flows and loads. For new WWTP there is a possibility to use area reservation next to the existing plant. It shall be noted that within this study only visible conditional analysis were carried out and proper analysis of existing structures would be needed during next project phase.
11.5.4.3
Sewerage pumping station which serves the Hotel district having capacity of 110 m3/h operates permanently. The inlet pumping station to the WWTP with capacity of 160 m3/h operates in automatic mode when the reception chamber is full. The pumps are of 20-30 years old and work at a decreased efficiency rate. The wastewater volume received by WWTP in 2006 was 65,600 m3, including: - Wastewater from private households, 30,000 m3; - Wastewater from economical agents, 35,600 m3; and The treatment of wastewater presents complete biological treatment. At present, installations are worn out and are not used properly. The effluent quality in 2006 is presented in the Table 11.5.7.
Parameter Hydrogen indicies SS Dry residuals BOD5 Chlorides Ammonia Phosphates
Unit pH mg/l mg/l mg/l mg/l mg/l mg/l
Inlet After concentration treatment 6.9 7.2 261.5 21.5 NA 1035 102.8 26.5 NA 135.4 37.5 22.1 144
Requirement 8.5 5 1000 3.0 300 0.5
rao1e 2005-01-17
Thus the lack of proper treatment facilities (installations are worn out) the wastewater quality does not meet the requirements set by Moldovan authorities. However, taken into consideration the treatment only in biological ponds the treatment result is reasonable good and reported SS reduction being 91 %, BOD5 reduction being
SWECO INTERNATIONAL
74 % and even ammonia reduction being 41 %. Test result indicates that the used method for taking samples from the effluent wastewater is most probably insufficient and real reductions could be on lower level than reported. Energy consumption of sewerage system in 2006 is 136,896 KWh. The total energy consumption of water utility for water supply and sewerage systems is 461,008 KWh. 11.5.5 Prioritising of needed Investments for years 20092013
11.5.5.1
In order to prepare preliminary water demand and wastewater projections the water and wastewater flows were analysed for the last three (3) years (20042006). Preliminary water demand and wastewater projections for the year 2013 are based on general assumptions as follows: - The connection rate to the water supply network is 70 %; - Per capita consumption in Riscani in 2013 is litres/capita/day; and - The connection rate to the sewerage system is 50 %.
140
In addition to above mentioned, some assumption related to rehabilitation of the water supply network were made as follows: - Due repairing and maintenance work and installation of new pipelines for new housing areas the amount of leakages from the water supply network have estimated to decrease some 30 %; - Due installation of new in-house flow meters and due better accounting system amount of unaccounted water is estimated to decrease some 25 % (billed water demand per capita will increase); and - Due better in-house flow measurement and possible increase in water tariffs per capita consumption has estimated to decrease some 15 %. Preliminary water and wastewater flow projections for Riscani are summarised below in Table 11.5.8.
rao1e 2005-01-17
SWECO INTERNATIONAL
Riscani Population connected to the Water Supply network Population connected to the Sewerage network Water pumped to the Distribution Non-Revenue Water Average total flow to WWTP
11.5.5.2
Needed Investments
Investment need estimations are done for the period of years 20072013 in order to secure sufficient operation of water supply and sanitation systems and to provide water supply and wastewater treatment for more inhabitants in Riscani. The new water sources and/or pipeline to connect city of Riscani by new water pipeline to city of Balti have not been taken into consideration as short term investment needs. Thus the project to implement the water pipeline from city of Balti to Riscani is under preparation and discussions on governmental level it is difficult to estimate needs for new investments related to water intake in city of Riscani. It could be possible that in near future the government of Moldova makes the decision to extend the water pipeline from Balti to Riscani. In that case the investment would be financed from the state budget. However, at this moment it is not known if this pipeline will be constructed until year 2013. Still, it would be feasible to wait until this issue is solved between the government authorities and city of Riscani. Due this reason, the investments on new water treatment plant and/or new water intake for city of Riscani have not considered to be feasible as proposed short-term investments. Short-term investments needed for water supply system are listed below, and serves as a basis for the proposed investment packages:
rao1e 2005-01-17
SWECO INTERNATIONAL
- Rehabilitation of five (5) deep wells in where the water quality is according to requirements; - Carrying out comprehensive study to find out more suitable places for ground water intake and construction of new ground water intake area (if there will not be decision to construct new water pipeline from Balti to Riscani); - Rehabilitation of network which is older than 30 years (> 30 km); - Continuing of installation of in-house water meters; and - Construction of new network including water meters for new consumers for at least 7,000 inhabitants (> 30 km). In general, both sewerage network and WWTP require urgent rehabilitation and reconstruction works to enable reliable operation of the network and to fulfil the treatment requirements set by Moldovan authorities. The investments needed for sewerage system are listed below, and serves as basis for the proposed investment packages: - Flushing of existing sewerage network; - Enlargement of the network to cover at least 6,000 new inhabitants; - Reorganising the existing septic tank emptying system including supply of proper vehicle for this purpose; - Renovation of district and WWTP inlet pumping stations; and - Reconstruction of new WWTP for capacity of 1,100 m3/day.
11.5.5.3
Preliminary cost estimations for proposed investments packages within water supply and sanitation services are only preliminary estimations and will only be used as help in preparation of suitable investment packages in Feasibility Phase of the project. Proposed investment packages have been prepared so that there are two different packages; 1st investment package for works which shall be carried out in the very near future (within 1-2 years) and 2nd investment package for other works which must be implemented in order to secure the water and sanitation operations in long term: 1st Investment Package: 1.4 million USD in total Renovation of existing water intake well system, 0.1 million USD;
rao1e 2005-01-17
SWECO INTERNATIONAL
Construction parallel 7.0 km of new water supply and sewerage network (14 km of network in total), 1.3 million USD.
2nd Investment Package, 9.0 million USD in total Construction paraller 20.0 km of new water supply and sewerage network network (40 km of network in total), 4.0 million USD; and Rehabilitation of existing sewerage network and construction of new WWTP, 5.0 million USD.
rao1e 2005-01-17
SWECO INTERNATIONAL
12
12.1
Singerei
General
Singerei is located on the left bank of River Ciulucul-Mare and on the Chiinu-Cernauti Highway, at a distance of 108 km from the capital of Republic of Moldova and at a distance of 26 km from the railway station Bli.
rao1e 2005-01-17
Figure 12.1.1: Location of Singerei
SWECO INTERNATIONAL
The official number of inhabitants is around 15000. According to the Director, previously also Mayor, the real number is estimated to 13300 inhabitants considering emigration to other countries and students and other immigrants from the surrounding rural areas. The population is decreasing. Companies and households increasing connection to the countrys natural gas network might be positive for the prospects of the town. Water is supplied 24 hours per day.
12.2
12.2.1
History Water services were run by private enterprises until 1959, when the Singerei Soviet Council decided to operate all water and wastewater services as a department in the town administration. The present Municipal Enterprise Apa-Canal was established in 1997.
12.2.2
The owner and how the owner governs Apa-Canal The Municipality is the owner of the Apa-Canal. The enterprise is placed as one of the departments in the Town Administrations organization chart. The Director of Apa-Canal reports directly to the relevant department of the municipal administration, that reviews financial and economical activities of municipal utilities. The Town Council appoints the Director of Apa Canal. The present Director came to Apa-Canal in 1976 after being the Mayor of the town. He has been the head of the utility already since he came to the utility. He is entitled to take any decision in the daily operation of the utility. Tariffs and consumption norms are approved by the Town Council. Singerei has a strategic development plan for the town financed by US AID. It covers all kinds of infrastructure development and is approved by the Town Council.
rao1e 2005-01-17
SWECO INTERNATIONAL
12.2.3
Legal Aspects Apa Canal has its own statutes and also a separate service agreement with its owner. There are no local rules or regulations relevant for Apa-Canal beside the national legislation. The Municipality is the owner of all the assets including both water and wastewater facilities, and Apa-Canal operates these facilities.
12.2.4
Organization and Management The organization chart for Apa-Canal is presented below. This organization was decided year 2000. A new organization is preliminary planned. For instance will there be a separate commercial section as the number of meters is increasing. Director
Water section 19
Wastewater section 9
Chief engineer 1
Accounting 3
Meter readers 5
Figure 12.2.1: Simplified Organization of Singerei Apa-Canal
Warehouse 1
The utility has an informal management team consisting of the Director and the Heads of Sections. The team has weekly meetings when they e.g. discuss the nearest future of the utility. No written minutes of meetings exist. The Heads of sections meet also every morning for daily reports and orders. This is the main form of internal information existing in the utility. Apa-Canal has only 1 computer, that one for accounting. There is no integrated management information system (MIS). For improved management and operation there is an obvious need for a higher degree of computerization. See further comments under the Financial Aspect, section 12.4. Principals of accountable management or management by objective are not known. The heads of departments have to follow a given
rao1e 2005-01-17
SWECO INTERNATIONAL
budget but have no incentives and no formal rights supporting their work. 12.2.5 Staff. Efficiency and training needs The number of staff is rather stable around 40. See the organization chart above showing 39 persons just now. If the customers would follow a direction to themselves inform Apa-Canal their consumption, the number of meter readers could be reduced, although they have a responsibility also to visit houses to see if people still live there or have moved. The number of inhabitants connected to the water and sewage systems is 8901. This results in a productivity of 228 inhabitants per employee. There are also 104 companies and budget organizations. The number of customers is 3200, including 1960 individual houses and 1240 apartments. The efficiency based on this figure is around 80 customers per employee. The number of connections to blocks of apartments is 28 and internal connections to apartments 730 customers. Assuming one connection per block, 28, and one per individual house, 1960, the efficiency is around 50 connections per employee. It should be considered that no individual house is connected to the sewerage system. The number of business entities, 109, is not considered in the efficiency figures, as there is no information about where they are located - for instance in own buildings with their own connections or in block houses. The director of Singerei Apa-Canal has a technical education. None of the other staff has a formal training for their work except one person in computerized accounting. Nobody has a diploma and nobody has graduated. The director admits that training is strongly needed, but nobody in the staff seems to be interested. Once three persons were sent to Chisinau for a longer technical training, but after one year they left the training for other jobs. The utility has no elaborated plan for training of the personnel. Despite that there exists a great need for training of practically all the personnel the director, the accountant, the chief engineer, plumbers.
rao1e 2005-01-17
The average salary is around 1100 lei per month. This is not enough for attracting and keeping staff. The director has contact with the
SWECO INTERNATIONAL
Singereis unit for unemployment, but Apa-Canal has difficulties to get qualified personnel. 12.2.6 Estimation of Consumption. Billing and Collection 72% of the household customers and 100% of the business and budget organizations have meters. Consumption norms are used for the other customers. The customers buy and repair meters on their own account. Personnel from Apa-Canal read most of the meters. A few customers are reading the meters themselves. Each household has a block note where the meter readers, or in a few cases the households themselves, note the consumed quantity of water and the amount to pay. Then they go to Apa-Canal and pay. Companies pay at a bank after they received a bill from Apa-Canal. The collection rate for population is 70%, for companies is 80% and for budget organizations 100%. A few households not paying in due time are disconnected after notice. 12.2.7 Relations to customers and other stakeholders Relations with consumers are maintained through controllers and other specialists in the utility as well as through the newspaper. There is no internal or external quality programme defining for instance issues such as quality of water and sewage service, quality of public relations, water demand management and environmental questions. 12.2.8 Consultants Comments There is only one computer, and the utility has to raise its IT level. The staff efficiency, 80 customers per employee, is around average among the visited utilities. The efficiency measured as connection per employee is 50. This is one of the best figures among the visited companies, but it should be considered that the value is related almost only to water services as only a few buildings are connected to the sewerage system.
rao1e 2005-01-17
The level of education or training is low, and the level of salary makes it difficult to attract good personnel.
SWECO INTERNATIONAL
The rate of meters, 72% of the households, can be improved. The way of billing the households is inefficient. The collection rates, 70% for households, 80% for companies and 100% for budget organizations, must be improved. To sum up, the institutional situation in Singerei Apa-Canal is in a bad condition and improvements are needed from practically all points of view. Further comments, see section 15.
12.3
12.3.1
Social environment in Singerei
12.3.1.1
Population
Number of population for Singerei as at 1st of January 2007 is the following:


(Thou.) 15.3 14.6 0.7 15.3
12.3.1.2
Education
Education system is composed of 4 preschooler institutions, 2 gymnasium schools and 2 high schools, having a total of 2360 students.
rao1e 2005-01-17
SWECO INTERNATIONAL
12.3.1.3
Estimation of Household Revenues Average nominal monthly salary - National level Average nominal monthly salary - Singerei County Disposable household income (national average per household member) Average monthly pension (national level) Average household disposable income in the county (per member) Average monthly pension at county level Number of persons in household Average household (no of persons) Pensioner household (no of persons) Average household disposable income in the county (per household) Average monthly pensioner household revenues at county level (per household) Lei Lei Lei Lei Lei Lei
Singerei
2004 1,103.1 661.7 491.4 325.3 294.8 195.1
2005 1,318.7 801.6 568.6 383.4 345.6 233.1
No. No. Lei Lei
3.0 1.8 884.3 351.2
3.0 1.8 1,036.9 419.5
12.3.2
Economic environment in Singerei
12.3.2.1
Natural resources
Singerei Town has a surface of 83.37 square km, most part of the town consisting in agricultural fields, which cover approximately 5700 ha (approx. 70%).
12.3.2.2
Economy
rao1e 2005-01-17
Singerei Town is an urban settlement with a high economic potential, due to the large number of powerful economic agents located on its territory. In present, the town has approximately 800 economic agents. Their number increased considerably in the last three years, due to the increasing number of individual entrepreneurship and due to the rise of number of economic agents which are performing their activities based on patent.
SWECO INTERNATIONAL
12.3.2.3
Local public finances
Revenues for local budget registered continuous growth in the last years. This was determined by the increase of deductions, indicating an improvement of local economy.
12.3.2.4
Industry
Volume of industrial production in Singerei Raion, compared to the total industrial production in Republic of Moldova, is presented in the following table:
Table 12.3.3: Volume of Industrial Production Evolution Singerei Raion
Volume of industrial production in 2006 Total out of which Singerei
Total production on Republic of Moldova increased with 26% during the period 2004-2006. For Singerei Raion, the production increased significantly with 236%, demonstrating a Mayor improvement of the local industry environment.
12.3.2.5
Financial situation of Commercial Companies in Singerei Raion, compared to the total financial situation of Republic of Moldova, is presented in Table 12.3.4. As can be observed from the table, the number of profitable enterprises increased at national level, but the percentage of profitable enterprises in total reporting enterprises remains approximately the same (46%). For Singerei Raion, number of profitable enterprises increased, but the percentage in total reporting companies stayed approximately the same. Average number of employees at national level kept a stable trend. In Singerei Raion, during the analyzed period, the average number of employees registered a decrease of 20%.
rao1e 2005-01-17
SWECO INTERNATIONAL
Jan.-Sept. 2004 Total Singerei

29423 11289 13906 572786 2790 53031 19140 61291 212 92 116 10705 -2.6 177.5 53 353.7

31870 12380 14893 570143 3424 66870 22717 68420 232 108 119 9889 8.9 227.9 66.5 377.2

34700 13155 16532 569698 3689 79052 26867 81804 241 108 125 8631 7.5 248.4 85 437.1
Financial result before tax recorded a negative value in 2004. For 2005 and 2006, financial result had a value of approximately 8 mil Lei. Sales revenues increased in 2005 (28 % compared to 2004) and continued also with an increase in 2006 (9% compared to 2005). Receivables related to commercial invoices and budget compensation recorded a positive evolution -25% in 2005 and 28% in 2006. During the analyzed period, debts recorded an increase of 23% in 2006, compared to 2004.
12.4
12.4.1
Financial Aspects
12.4.2
rao1e 2005-01-17
SWECO INTERNATIONAL
12.4.2.1
Table 12.4.1: Operating result evolution - Singerei
Source: Water Utility from Singerei
2004 71.5 71.0 0.5 84.6 10.5 4.3 42.5 32.7 9.8 2.7 7.0 17.5 (13.0)
2005 73.6 73.6 91.6 14.9 4.1 42.2 32.7 9.5 7.5 6.8 16.1 (18.0)
2006 96.8 95.0 1.8 102.2 15.7 9.3 48.7 38.0 10.7 4.0 6.6 17.9 (5.5)
In 2006, approximately 82% of the operating revenues result from water supply and 18% from wastewater operations. The total operating result is negative for the entire period of analysis with an improvement tendency in 2006 as result of tariff increases from January. The evolution of the structure of operating revenues is presented in the following chart:
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 12.4.1: Structure of Sales - Singerei

Structure of Sales
90.0 80.0 70.0
Thousand USD/year
60.0 50.0 40.0 30.0 20.0 10.0 2004 2005 2006 Water Wastew ater
The level of revenues increased in 2006 because the invoiced quantity did not decrease significantly and the tariffs increased significantly in January 2006. The evolution of the water losses is presented in the table below:
Table 12.4.2: The Evolution of Non Revenue water 2004-2006 - Singerei
2004 Th. m3 293.0 178.5 -39%
2005 Th. m3 294.6 182.5 -38%
% 1% 2%
2006 Th. m3 316.5 186.2 -41%
% 7% 2%
Table 12.4.3: The Evolution of Invoiced quantity 2004-2006 - Singerei
Evolution of invoiced quantity Water Inhabitants Private companies and institutions Waste water Inhabitants
2004 Th. m3 178.5 151.5 27.0 38.3 35.7
2005 Th. m3 182.5 152.6 29.9 39.0 36.3
2006 % Th. m3 2.2% 186.2 0.7% 152.5 10.7% 33.7 1.8% 1.7% 43.1 40.6 % 2.0% -0.1% 12.7% 10.5% 11.8%
rao1e 2005-01-17
SWECO INTERNATIONAL
Private companies and institutions

2.6
2.7
3.8%
2.5
-7.4%
The water consumption slightly increased in the last years mainly as result of increase of water delivered to companies and institutions. In the last years, the evolution of water production delivered to companies and institutions of is the result of the poor economic situation of companies and public institutions. The weight of water delivered to companies and institutions is low (represents only 18% in total invoiced water). The level of metering for companies and institutions is 100 %. Because the level of tariff for companies and institutions is significantly higher than for domestic customers, these entities have the tendency to find water from other sources (have their own sources) and to pay only sewerage services to the utility. The delayed adjustment of tariff compared with the cost increases had a negative impact on the performances of the water utility. The water utility can not control the tariff adjustment process, which is the prerogative of the Local Council. The water utility can propose tariff increases based on cost increase but the final decision is taken by Local Council. The evolution of the structure of total operating costs is presented in the following chart:
Figure 12.4.2: The Structure of Operating Costs - Singerei
Structure of operating costs
17.5% 28.4%
Energy
Personnel (salaries and related taxes) Depreciation
6.5% 47.6%
Other costs
rao1e 2005-01-17
SWECO INTERNATIONAL
The most important cost elements are personnel costs (wages, salaries and related taxes), which represents 47.6% of operating expenditures in 2006 and energy costs, which represents about 17.5% of operating expenditure in 2006. The weight of energy costs was relatively constant in the last years. The level of personnel costs increased continuously based on two factors: The salaries have increased in nominal terms every year. The increase of salaries has to be performed based on premises stipulated in the law regarding evolution of salaries in the public sector. This element is more or less not under the control of the water utility. Due to lack of financial resources the last mandatory tariff increases was not yet implemented. The number of personnel has slowly increased during this period. The evolution of operating costs is presented in the following chart:
Figure 12.4.3: Evolution of operating costs - Singerei
Evolution of operating costs
60.0 50.0 Thousand USD/year 40.0 2004 30.0 20.0 10.0 Energy Personnel (salaries and related taxes) Other costs 2005 2006
The evolution of operating costs highlights the prudent policy regarding expenditures in the last years due to lack of financial resources.
12.4.2.2
rao1e 2005-01-17
An important problem and challenge that the utility has to face is the high level of trade receivables and trade payables. The poor social
SWECO INTERNATIONAL
situation of its domestic customers, the decline of local industry and the lack of financing for public institutions have raised the unrecovered debt to high levels. A breakdown of the account receivables from commercial companies is shown in the following table:
Table 12.4.4: The Level of Account Receivables from Commercial companies as at December 31, 2006 - Singerei
31.12.2006 USD % 1,088 4.2% 0.0% 25,097 95.8% 26,185 100.0%
The account receivables from commercial customers consist of the following main debtors: TERMOCOM (former district heating company): 293 thousand MDL; Poultry Factory: 17 thousand MDL; A breakdown of the account receivables from domestic customers is shown in the following table:
Table 12.4.5: The Level of Account Receivables from domestic customers as at December 31, 2006 - Singerei
31.12.2006 USD % 4,293 24.0% 6,363 35.6% 7,216 40.4% 17,872 100.0%
rao1e 2005-01-17
The management of the company needs to have among its priorities the increasing of the collection level. In the last years the water utility succeeded to maintain its collection ratio to high levels. In the current conditions, it is important to maintain the level of the outstanding debt at low levels (at least to maintain this level constant) to be able to generate sufficient cash to pay the current obligations (mainly the energy bill). This is essential for a sound development.
SWECO INTERNATIONAL
The level of short term liabilities has decreased in the last years. The actual management of the utility has succeeded to pay some of the current liabilities generated in the last year but the total level is relatively high. A breakdown of the short-term liabilities is presented in the following table:
Table 12.4.6: Evolution of short-term liabilities (amounts in Thousand USD) Singerei
2004 53.1 1.8 5.4 27.7 17.7 0.6
2005 58.8 4.5 6.0 28.7 19.1 0.6
2006 46.5 1.3 5.0 28.5 11.0 0.7
Table 12.4.7: Aging of liabilities to social fund - Singerei
31.12.2006 USD % 1,285 4.5% 7,304 25.6% 19,941 69.9% 28,530 100.0%
Table 12.4.8: Aging of liabilities to state and local budgets - Singerei
31.12.2006 USD USD 1,271 11.6% 4,915 44.7% 4,801 43.7% 10,987 100.0%
Actually this was the strategy used in the last years to deal with the low financial resources, the payment priorities being:
rao1e 2005-01-17
first: the energy bill;
SWECO INTERNATIONAL
second: wages and salaries; third: other suppliers; fourth: taxes to the budgets (social fund, etc);
The water Company does not have a rescheduling agreement with the fiscal authorities. The current situation of the fixed assets is rather poor. The utility did not have resources in the last years for major repairs and investments. The need for performing the investment is high. If no major investments will be performed in the following years, the operating cost will increases and will affect the capability of the utility to deliver water to the town.
12.4.2.3
Tariff analysis
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 12.4.4: Water Tariff Evolution - Singerei

2.00 1.80 1.60 1.40 1.42 1.42 1.39 1.39
1.81
USD/m3
1.20 1.00 0.80 0.60 0.40 0.20 2004 2005 2006 0.16 0.16 0.34 0.79
Domestic customers Public Institutions Commercial customers
The last tariff increase for water services was in January 2006. The water tariff for domestic customers recoded a significant adjustment. The tariffs for public institution were decrease by the Local Council mainly due to lack of resources of these institutions, while the tariffs for commercial customers was increase. In this way, the Local Council is promoting a cross-subsidization policy between the commercial company and public institutions. The tariff evolution of the water tariffs for the last years is presented in the following chart:
Figure 12.4.5: Sewerage Tariff Evolution - Singerei

2.00 1.80 1.60 1.40 1.60 1.60 1.56 1.56 1.66 Domestic customers 1.87
USD/m3
1.20 1.00 0.80 0.60 0.40 0.20 2004 2005 2006 0.16 0.16 0.37 Commercial customers Public Institutions
rao1e 2005-01-17
For the future the utility should consider the possibility and to take all the necessary actions to adjust the tariff more often to avoid the negative effects of the cost increases due to the inflation. In the future
SWECO INTERNATIONAL
the water utility will have to cover also the possible debt service related to the loan from the World Bank. Briefly, the methodology for approving tariffs consists of the following steps: The utility specialists are preparing a study for tariff adjustment
- The study is sent to the Local Council and ANRE for approval. According to the management team of the utility, the level of approved tariff is usually lower than their request. The management team considers that a tariff increase will solve most of the financial problems of the utility. One of the most wide spread idea about tariff increase in Moldova is to increase more of tariffs for private entities and institutions and to increase less the tariffs for inhabitants. In most of the cases this is mainly a political decision with the purpose of maintaining a lower pressure on the domestic customers. This approach leads to an increase of the cross-subsidization between entities (private companies and institutions) and inhabitants. This discourages the economic development.
12.4.2.4
Even if the utility has recorded achievements in the last years, financial management is still far from the requirements of a modern utility. A lack of skills and human resources leads to limitations in the activities performed by the Finance Department. The accounting department consists of 3 persons: 1 chief accountant and 2 accountants. The utility has 1 computer. They bought a billing software from own resources (the model used also in Bli) that is in process of implementation. Currently they are keeping both manual and electronic records. The financial management is limited to good management of payments, and is unable to give effective support to the overall management decision-making process, particularly the good management of the growth potential.
rao1e 2005-01-17
SWECO INTERNATIONAL
Without minimizing the technical and implementation problems that the utility has to face in the near future, the financial planning area is most in need of enhancement and restructuring efforts. We recommend the introduction of cost accounting by creating cost centres for the main activities (water and sewerage). There is important to find out the performances of each sector. We recommend the extensive use of computer for financial management. Accounting, billing and collection, financial forecast are just a few items which can be performed more efficient by using a computer. Even if the utility has only one computer, its degree of usage is still very low. The process of financial planning does not include all the parties that should be involved with financial planning matters and has not the necessary prediction-correction role. The management team of the utility has to prepare a long-term strategy to assure the sustainable development. This analysis can be used as a starting point in preparing this strategy. Without a clear strategy for sustainable development of the activity, the utility continue to survive but with very limited potential and lower and lower performance. 12.4.3 Financial Selection Criteria By applying the criteria mentioned under section 2.4.3, the scores obtained by the water Operator from Singerei are presented in the following table:
Table 12.4.9: Scores for the Water Utility from Singerei
Historical liabilities Liabilities to Suppliers, Social Fund and State of Local Budgets Total Operating revenues Weight of Liabilities in Total Revenues Number of points Tariff adjustment Last tariff adjustment was in January 2006
rao1e 2005-01-17
2006 USD 46,547 96,781 48.1% 6 Points 4
SWECO INTERNATIONAL
Historical liabilities In the period 2004-2007 there was only 1 tariff adjustment Total Operating ratio Operating revenues Operating profit Operating revenues/operating costs Points Account receivables collection period Trade receivables(A) Sales (B) (A/B)*365- days Points Total points
2006 USD 1 5 2006 USD 96,781 102,236 0.947 2 2006 MDL 569 1,247 166 2 15
The results are analyzed in the chapter Recommended Towns for Preparation of Feasibility Studies where the decision regarding the introduction of Singerei in the 10 list towns is analyzed.
12.5
12.5.1
Technical Aspects
Specific Task Objectives Related to technical Analysis The specific tasks of this sub assignment for the Pre-Feasibility Phase were clarified together with the Client in the beginning of the assignment. The tasks agreed were as follows: To prepare water and wastewater balances for 15 target towns to describe the present situation and water and wastewater projections for the year 2013; to assess the present status and condition of present water supply and sanitation facilities in 15 target towns in order to evaluate the need for replacements and/or needed rehabilitation on short-term basis; and to prepare preliminary short-term investment program for years 20092013 for the 15 target towns in order to improve ad
rao1e 2005-01-17
SWECO INTERNATIONAL
develop the present functional level of their water supply and sewerage services. 12.5.2 Water supply and sewerage in Singerei Water is supplied via one (1) main water supply network (having length of approximately 43 km). Only approximately 8,900 inhabitants are currently connected to the water supply network while some 6,400 inhabitants are dependable on private wells. Water intake consists of 13 deep wells, out of which five (5) wells are under renovation or taken out of use while eight (8) wells are in operation. Water storage consists of three (3) water towers, three (3) underground water tanks and two (2) metal cisterns. The northern part of the town is supplied from three (3) deep wells, using two (2) water towers and one (1) underground reservoir. Town centre is supplied from two (2) deep wells, water being stored in two (2) cisterns. The southern part of the town receives water from two (2) deep wells, using two (2) reservoirs. In addition, there is one (1) deep well, which supplies the reservoir from Hospital area. Water in the town centre and south part of Singerei has no treatment at all. The only treatment process used is chlorination to underground water tank in the north part of the town. However, the chlorination is done manually by pouring chlorine solution directly to the water tank. The total length of main sewerage network is 4.2 km. Sewerage network has no pumping stations; wastewater goes by gravity directly to the WWTP, which is located some 1 km west from the town centre. Only some 1,040 inhabitants out of 15,300 are connected to sewerage network while rest is using septic tank system or dry lavatories. However, the number of septic tank users is not known. The wastewater treatment plant was taken into operation in 1974 representing complete biological treatment process. At present the treatment plant is operated, but all installations are worn out. In the following sections the water and wastewater balances and the technical status of water supply and sanitation facilities as well needed investments on preliminary level have been described in detail.
rao1e 2005-01-17
SWECO INTERNATIONAL
12.5.3
Water Supply System
12.5.3.1
Present System
Water intake consists of 13 deep wells, out of which five (5) are not operated while eight (8) are in use. Every operated deep well has a submersible Moldovan made pump, type ECV (see Table 12.5.1). Water storage consists of three (3) water towers, three (3) underground water tanks and two (2) metal cisterns. The total capacity of operated water intake is 2,500 m3/day. Approximately 8,901 inhabitants out of 15,300 are currently connected to the water supply network.
Nr of deep well 1 2 3 4 5 6 7 12
Pump type ECV 6-10-185 ECV 6-10-185 ECV 8-25-150 ECV 6-10-235 ECV 6-10-185 ECV 6-10-185 ECV 8-25-100 ECV 6-6.3-125
Head (H, design), m 185 185 150 235 185 185 100 125
Flow (Q, design), m3/h 10 10 25 10 10 10 25 6.3
The northern part of the town is supplied from three (3) deep wells (Nr. 5, 6, 7), using two (2) water towers 30 m3 each and one (1) underground reservoir with capacity 180 m3. Town centre is supplied from two (2) deep wells (Nr. 2, 3), water being stored in two (2) cisterns with capacities 25m3 and 50 m3. The southern part of the town receives water from two (2) deep wells (Nr. 1, 12), using one (1) reservoir with total capacity 130 m3. Hospital area has its own reservoir with capacity 1000 m3, and is supplied from deep well Nr. 4. Water in the town centre and south part of Singerei has no treatment at all. The only treatment process used is chlorination to underground water tank in the north part of the town. However, the chlorination is done manually by pouring chlorine solution directly to the water tank. At present, the quality of water from deep wells corresponds to Moldavian Normative on Potable Water (see Table 12.5.2).
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 12.5.2: Analysed water quality provided by town of Singerei.
Parameter Colour Turbidity Odor Taste Hardness Dry residuals Nitrites Chlorides Sulphates Ammonia Coli form
Unit grade mg/l grade grade Mol/l mg/l mg/l mg/l mg/l mg/l bact/l
Requirement 20 1.5 2 2 7 1,000 45 350 500 2.0 3
Actual 0 0 0 0 5.1 1,000 11.1 56 295 1.5 3
Used underground water tanks (2 units) have capacities of V1=180 m3 and V2=130 m3. At present, all two (2) tanks are in operation and supply water to the southern and northern parts of the town. There are also three (3) water towers of type Rojnovskii with capacities of V=30 m3 each. The towers supply northern and central parts of the town. There are also two (2) water cisterns, which supply central part of the town. There are no pumping stations used in Singerei water supply system. Water distribution network consists of asbestos, steel and cast iron pipes. The range of diameters is from 32 mm to 200 mm. The total length of network is 43.1 km. Different lengths of used pipeline materials and age of the network have been presented in Table 12.5.3.
Table 12.5.3: Water Supply Network in town of Singerei.
DN Steel 32-50 70-90 Sub-total Cast iron 100 150
< 10 years, km
10-20 years, km 4.6 0.7 5.3
30-40 years, km 19.2 1.2 20.4
40-50 years, km 10.4 4.5
Total km 23.8 1.9 25.7 10.4 4.5
rao1e 2005-01-17
SWECO INTERNATIONAL
DN Sub-total Asbestos 150 200 Sub-total Total
< 10 years, km
10-20 years, km
30-40 years, km
40-50 years, km 14.9 2.0 0.5 2.5
Total km 14.9 2.0 0.5 2.5 43.1
12.5.3.2
In General, main part of centrifugal pumps and other mechanical equipment are in a poor condition. Most of the mechanical parts are worn out and old pumps work at a decreased efficiency rate. All deep wells have a protection area. Several deep wells have recently been renovated. However, the renovated pumps are of Moldovan production and the efficiency rate is still low. Water meters are not installed at all deep wells and operation is not monitored. There is no chlorination plant used in Singerei. The dilution and dozing of chemical is carried out manually. Two water towers have recently been renovated. However, the automation doesnt assure good operation of water towers. During the past years the water distribution network hasnt been renovated at all. The estimated wearing of pipes is 70%. However, asbestos pipes should be completely replaced due to their harmful impact on consumers health. Un-accounted water losses in 2006 constituted 130,300 m3 (41% from the water volume pumped to the distribution). The wear of pipes is high and the bursts frequency is between 80 and 120 per year. The most often bursts occur on the districts with metal pipes and at the points of control manholes, where the hydrants are installed and joints with steel pipes. The most frequent bursts occurs in the town centre on streets B.Glavan and C.Pietii, in South-East part of the town streets Chisinaului, Mateevici, Victoriei, Pacii where the soil with ground water are more aggressive for metal pipes.
rao1e 2005-01-17
SWECO INTERNATIONAL
Together with renovation of the existing network the main focus shall be paid in extension of network in order to provide water supply for more inhabitants.
12.5.3.3
The deep wells Nr. 1, 2, 5, 7 with total capacity of 70 m3/h operate permanently. The well No. 4 with a capacity of 10 m3/h, which supplies Hospital area, operates periodically some 140 h per month. The deep well Nr 6 with a capacity of 10 m3/h and deep well Nr 12 with a capacity of 6.3 m3/h operate as necessary, the average being about 12 h per day. Deep well Nr.3 with capacity of 25 m3/h usually is used as a reserve well. The only water treatment process used is chlorination to underground water tank. However, the chlorination is done manually by pouring chlorine solution directly to the water tank. Water in the town centre and south part of Singerei has no treatment at all. Pumped water flows are not metered at all deep wells and operation is not monitored automatically. Currently the water supply network is divided into four (4) zones supplied by gravity: - Northern zone from two (2) water towers with capacities 30 m3 each. Water towers are supplied from deep wells Nr. 5, 6; - Western zone from the pressure reservoir with capacity 180 m3. The reservoir is supplied from deep well Nr. 7 and partially from water towers from Northern zone ; - Central zone from two (2) water cisterns with capacities 50 m3 and 25 m3, which are supplied from deep wells Nr. 2 and 3. - Southern zone from one (1) underground reservoir with total capacity of 130 m3, which is supplied from deep wells Nr. 1 and 12. From the total number of consumers (8901), 7520 are metered. Only in 2006 had been metered 360 consumers. The metering process continues and the necessary measures are taken for timely metrological verification of the meters, actual water consumption evidence. All private apartment meters are size of DN 15 while size of meters installed at institutions and organizations vary from DN 15 to DN 50 depending on connection diameter.
rao1e 2005-01-17
SWECO INTERNATIONAL
The efficiency for pumping is calculated basing on available data presented by Singerei Apa-Canal. In 2006, the total energy consumption within water intake (deep wells) was 21,400 kWh while total pumped water amount was 24,000 m3/year. The average energy consumption within water intake was 0.89 kWh/m3. Total energy consumption used within network pumping stations in 2006 was 324,000 KWh. 12.5.4 Sewerage System
12.5.4.1
Present System
The main sewerage network having length of 4.2 km is made of asbestos and cast iron pipelines. Network consist one (1) pumping station which is the inlet pumping station for the WWTP. Wastewater treatment plant is located some 1 km west from the town centre. Only 1,040 inhabitants out of 15,300 are currently connected to network. Initially, WWTP, constructed in 1974, had a design capacity of 400 m3/day. In 1989 it was extended and the capacity was increased up to 600 m3/day. The WWTP consists of the following treatment units: Grit removal; Aeration tanks; Sedimentation tanks; Sludge drying beds (4 units); Biological ponds for effluent wastewater (2 units); Sludge pumping station; and Chlorination plant (not in use).
The treated wastewater is discharged to Ciuluc river. At present the treatment plant is operated, but all installations are worn out.
12.5.4.2
rao1e 2005-01-17
The main sewerage network is only 4.2 km long being constructed in 1974 and has not been renovated during past 33 years. The main material used is cast iron. Description of the sewerage network has been presented in the Table 12.5.4.
SWECO INTERNATIONAL
Main collector Street collectors Total
Pipe Material Asbestos Cast iron
DN 250300 100150
Length, km 0.6 3.6 4.2
Operation period, years 33 33
The existing sewerage network could be considered to be in reasonable good condition. However, within this study any conditional analysis has not been carried out and it could only be estimated that at least proper flushing of pipelines and emptying of manholes will be needed. Still, the sewerage network covers only small part of the town and only some 12 % of consumers are currently connected to the sewerage system. In order to provide proper sanitation services the first priority regarding sewerage system would be enlargement of the network to cover more water consumers. Existing Wastewater Treatment Plant is at the end of its operational lifetime. Taken into consideration the condition of existing structures and machineries and insufficient process technology it could be recommended that the whole treatment plant will be replaced with new modern and more compact WWTP taken into account current and future wastewater flows and loads. For new WWTP there is a possibility to use area reservation next to the existing plant. It shall be noted that within this study only visible conditional analysis were carried out and proper analysis of existing structures would be needed during next project phase.
12.5.4.3
The wastewater volume received by WWTP in 2006 was 43,100 m3, including: - wastewater from private households, 40,600 m3; and - wastewater from business technological repairs, 2,500 m3. The treatment of wastewater is made in installation of type OXID600 and presents complete biological treatment. At present, installations are worn out and are not used properly.
rao1e 2005-01-17
The effluent quality in 2006 has been presented in the Table 12.5.5.
SWECO INTERNATIONAL
Table 12.5.5: The effluent quality at Singerei WWTP in 2006.
Parameter pH SS COD BOD5 Ammonia
Unit mg/l mg/l mg/l mg/l
Inlet After concentration treatment 7.8 8.2 304.0 22.5 348.9 105.8 116.4 19.3 98.9 19.1
Requirement < 8.5 5 30 3.0 0.5
Thus the lack of good operational conditions of treatment facilities the wastewater quality does not meet the requirements set by Moldavian authorities. However, the result is reasonable good and reported SS reduction being 92 %, BOD5 reduction being 83 % and even ammonia reduction being 80 %. Test result indicates that the used method for taking samples from the effluent wastewater is most probably insufficient and real reductions could be on lower level than reported. Taking in consideration that there are no wastewater pumping stations and all mechanical equipment at WWTP is worn out, the energy consumption is reduced to lightning of administrative buildings. The data regarding energy consumption at WWTP was not available. 12.5.5 Prioritising of needed Investments for years 20092013
12.5.5.1
In order to prepare preliminary water demand and wastewater projections the water and wastewater flows were analysed for the last three (3) years (20042006). Preliminary water demand and wastewater projections for the year 2013 are based on general assumptions as follows: - The connection rate to the water supply network is 80 %; - Per capita consumption in Singerei in 2013 is litres/capita/day; and - The connection rate to the sewerage system is 50 %.
130
rao1e 2005-01-17
In addition to above mentioned, some assumption related to rehabilitation of the water supply network were made as follows:
SWECO INTERNATIONAL
- Due repairing and maintenance work and installation of new pipelines for new housing areas the amount of leakages from the water supply network have estimated to decrease some 15 %; - Due installation of new in-house flow meters and due better accounting system amount of unaccounted water is estimated to decrease some 10 % (billed water demand per capita will increase); and - Due better in-house flow measurement and possible increase in water tariffs per capita consumption has estimated to decrease some 10 %. Preliminary water and wastewater flow projections for Singerei are summarised below in Table 12.5.6.
Singerei Population connected to the Water Supply network Population connected to the Sewerage network Water pumped to the Distribution Non-Revenue Water Average total flow to WWTP 12.5.5.2 Needed Investments
Investment need estimations are done for the period of years 20072013 in order to secure sufficient operation of water supply and sanitation systems and to provide water supply and wastewater treatment for more inhabitants in Singerei. The new water sources and/or pipeline to connect city of Singerei by new water pipeline to city of Balti have not been taken into consideration as short term investment needs. Short-term investments needed for water supply system are listed below, and serves as a basis for the proposed investment packages:
rao1e 2005-01-17
- Rehabilitation of deep wells for increasing efficiency of energy consumption;

SWECO INTERNATIONAL
- Rehabilitation of network which is older than 30 years (> 25 km); - Continuing of installation of in-house water meters; - Construction of new network including water meters for new consumers for at least 5,000 inhabitants (> 25 km); - Implementation of new chlorination plant and connection of used water towers and reservoirs to this plant; and - Implementation of automation and water flow metering for water intakes. In general, both sewerage network and WWTP require urgent rehabilitation and reconstruction works to enable reliable operation of the network and to fulfil the treatment requirements set by Moldovan authorities. The investments needed for sewerage system are listed below, and serves as basis for the proposed investment packages: - Flushing of existing sewerage network; - Enlargement of the network to cover at least 6,000 new inhabitants; - Reorganising the existing septic tank emptying system including supply of proper vehicle for this purpose; - Reconstruction of new WWTP for capacity of 1,000 m3/day.
12.5.5.3
Preliminary cost estimations for proposed investments packages within water supply and sanitation services are only preliminary estimations and will only be used as help in preparation of suitable investment packages in Feasibility Phase of the project. Proposed investment packages have been prepared so that there are two different packages; 1st investment package for works which shall be carried out in the very near future (within 1-2 years) and 2nd investment package for other works which must be implemented in order to secure the water and sanitation operations in long term: 1st Investment Package: 1.2 million USD in total Renovation of existing water intake system including new equipment for chlorination and implementation of automation system for water intake, 0.2 million USD;
rao1e 2005-01-17
SWECO INTERNATIONAL
Supply of 1 new vehicle to be used for flushing sewerage system and 1 vehicle for septic tank emptying purposes, 0.2 million USD; and Construction of 8.0 km of new water supply network, 0.8 million USD.
2nd Investment Package, 8.0 million USD in total Construction of 20.0 km of new water supply network, 2.0 million USD; and Rehabilitation and extension of existing sewerage network and construction of new WWTP, 6.0 million USD.
rao1e 2005-01-17
SWECO INTERNATIONAL
13
13.1
Teleneti
General
Teleneti is located in the central part of the Republic of Moldova, on the right bank of river Ciulucul Mic, at some 90 km from Chiinu.
Figure 13.1.1: Location of Teleneti
rao1e 2005-01-17
SWECO INTERNATIONAL
The real number of inhabitants estimated in a census 2005 was 8760. This was some 5000 lower than the previously official number. The main reasons for the lower figure were emigration to the capital and to other countries. The Mayor reported that the number of inhabitants has started to increase during the last period of time. The upper part of the town, the centre and Old Teleneti district are supplied with water without interruptions. The rest of the town is supplied according to a schedule in the morning and evening during 8 hours per day. Teleneti has got international grants for improvement of the roads and kinder gardens. The town has also got a grant of 136000 leis from the state for rehabilitation of the water supply system.
13.2
13.2.1
History The first water network was built in 1956. The water service was owned and operated by a State Enterprise, which was changed to the present legal entity Municipal Enterprise Apa-Canal in year 2006.
13.2.2
The owner and how the owner governs Apa-Canal The Municipality is the owner of the Apa-Canal. The enterprise is placed as one of the departments in the Town Administrations organization chart. The Town Council appoints the Director of Apa-Canal. He reports to the Mayor and the Town Council. The present Director came to ApaCanal in 2003. The former director is now Mayor of the town. The director is entitled to take any decision in the daily operation of the utility. Tariffs and consumption norms have to be approved by the Town Council. Teleneti has a socio-economic development plan covering 15 years development of the town as well as a land plan. The plans also include renovation of water services, wastewater services, gas services and roads. The plans were approved by the Town Council 2005. According to the socio-economic plan the population will continue to decrease.
rao1e 2005-01-17
SWECO INTERNATIONAL
13.2.3
Legal Aspects Apa-Canal has its own statutes but no separate service agreement with its owner describing for instance the level of service to the customers. There are no local rules or regulations relevant for Apa-Canal beside the national legislation. The Municipality is the owner of all the assets including both water and wastewater facilities, and Apa-Canal operates these facilities.
13.2.4
Organization and Management The organization chart for Apa-Canal is presented below. This organization was decided year 2000. A new organization is preliminary planned. For instance will there be a separate commercial section as the number of meters is increasing.
Director
Economist
Engineer-chief
Accountant-chief
Electrician
Water supply and sanitation engineer
Accounting department
Water supply department
Sanitation department
Figure 13.2.1: Simplified Organization of Teleneti Apa-Canal
The utility has no formal management team, but the Director meets when necessary relevant persons from the administrative personnel
rao1e 2005-01-17
SWECO INTERNATIONAL
when they discuss current issues. Conclusions are registered in a special ledger. Apa-Canal in Teleneti has no computers. The accountant carries out book keeping manually. There is no integrated management information system (MIS). For improved management and operation there is an obvious need for a higher degree of computerization. Also the Mayor, which the Consultant met during the data collection visit, supported this. Principals of accountable management or management by objective are not known. The heads of departments have to follow a given budget but have no incentives and no formal rights supporting their work. 13.2.5 Staff. Efficiency and training needs The number of staff is 35. See the organization chart above. Of these 4 are meter readers, a number which might be possible to reduce if the customers would themselves in a higher degree inform Apa-Canal their consumption. The number of customers (households, enterprises and budget organizations) connected to the water and sewage systems is 1244 (1185 households, 40 companies and 19 budget organizations). This results in an efficiency of 36 customers per employee. The number of consumers (persons) served by water is 2770, and measured on this figure the efficiency is 79. Information on the number of connections is not available. The Director has an education appropriate for his work, which none of the other staff seems to have according to the first preliminary information received. Therefore there exists a great need for training of practically all the personnel. As Teleneti Apa-Canal is not at all computerized, not even the accounting, there is also a great need for computers and software. The average salary is around 948 lei per month (was 834 in year 2006). This is not enough for attracting and keeping qualified staff. The utility has for instance no chief engineer at present. According to the Mayor the economy has lately improved and many debts have been paid. Therefore salaries can now be raised.
rao1e 2005-01-17
SWECO INTERNATIONAL
13.2.6
Estimation of Consumption. Billing and Collection 798 apartments (67%) and all 59 companies and budget organizations (100%) have meters. Consumption norms are used for the other customers. Personnel from Apa-Canal read most of the meters. A few customers are reading the meters themselves. Apa-Canal distributes bills and the customers can pay at Apa-Canal and at banks. The collection rate is 90%.
13.2.7
Relations to customers and other stakeholders Relations with customers are maintained via the employees dealing with billing and collections and personnel from the repairs department. Important information such as changes in applicable tariffs is published in Official Gazette of Republic of Moldova. There is no internal or external quality programme defining for instance issues such as quality of water and sewage service, quality of public relations, water demand management and environmental questions.
13.2.8
Consultants Comments The utility has no computers at all and must be computerized. There is no formal management team. Training at all levels seems to be necessary. The level of salary is very low. 67% of the apartments are metered. The collection rate is 90%. The staff efficiency, 36 customers or 79 consumers per employee, is low. The institutional situation in the utility is generally in a bad condition and improvements are needed from practically all aspects. Further comments, see section 15.
13.3
rao1e 2005-01-17
SWECO INTERNATIONAL
13.3.1
Social environment in Teleneti
13.3.1.1
Population
Number of population for Teleneti town as at 1st of January 2007 is the following:
Table13.3.1: Population

(Thou.) 10 8.4 1.6 10
13.3.1.2
Educational system consists of a kinder garden with 230 children, 3 gymnasiums in which 1,460 pupils, a high school with 330 pupils, a professional polyvalent school, which is training specialists in agriculture, public nourishing, light industry, having 180 students and a special school with 145 pupils. Health system consists in a centre for family doctors and a hospital with 180 beds.
13.3.1.3
Estimation of Household Revenues Average nominal monthly salary - National level Average nominal monthly salary - Teleneti County Disposable household income (national average per household member) Average monthly pension (national level) Average household disposable income in the county (per member)
rao1e 2005-01-17
Lei Lei Lei Lei Lei Lei
Teleneti 2004 2005 1,103.1 1,318.7 610.9 722.2 491.4 325.3 272.1 180.2 568.6 383.4 311.4 210.0
Average monthly pension at county level
SWECO INTERNATIONAL
No. No. Lei Lei
3.0 1.8
3.0 1.8
816.4 324.3
934.2 378.0
13.3.2
Economic environment in Teleneti
13.3.2.1
Natural resources
The total land area is 5,367 ha, out of which 57.7% -30.88 are agricultural fields. Water surfaces have a surface of 96 ha. Forrest represents 924 ha (17.2% from the total surface).
13.3.2.2
Total length of roads in the town of Teleneti is 45.2 km, out of which 17.5 km are asphalted.
13.3.2.3
Economy
Number of economic agents registered in Teleneti town is 1,562, most of them being individual enterprises or based on patent. There are 120 retail agents, 5 markets and 6 public nourishment units.
13.3.2.4
Industry
Volume of industrial production in Teleneti Raion, compared to the total industrial production in Republic of Moldova, is presented in the following table:
Table 13.3.3: Volume of Industrial Production Evolution Teleneti Raion
Volume of industrial production in 2006 Total out of which Teleneti
rao1e 2005-01-17
SWECO INTERNATIONAL
Total production on Republic of Moldova increased with 26% during the period 2004-2006. For Teleneti Raion, the production decreased significantly with 63% in 2006, compared to 2004), demonstrating a deterioration of the local industry environment.
13.3.2.5
Financial situation of Commercial Companies in Teleneti Raion, compared to the total financial situation of Republic of Moldova, is presented in the following table:
Jan.-Sept. 2004 Total Teleneti

29423 11289 13906 572786 2790 53031 19140 61291 159 65 63 6312 1.8 85.2 20.3 157.7

31870 12380 14893 570143 3424 66870 22717 68420 162 62 70 5786 9 112.5 19.6 156.4

34700 13155 16532 569698 3689 79052 26867 81804 174 77 73 5417 3.2 121.3 23.9 139.8
As can be observed from the table above, the number of profitable enterprises at national level is increasing, but the percentage of profitable enterprises in total reporting enterprises remains approximately the same (46%). Average number of employees at national level kept a stable trend. In Teleneti Raion, during the analyzed period, the average number of employees registered a decrease of 14%. Financial result before tax recorded a Mayor growth of 5 times in 2005. For 2006, the financial result decreased with 64%.
rao1e 2005-01-17
SWECO INTERNATIONAL
Sales revenues increased in 2005 (32% compared to 2004) and continued with a growth in 2006 (8% compared to 2005). Receivables related to commercial compensation recorded a stable evolution. invoices and budget
In 2004 and 2005, debts recorded a stable evolution but in 2006 a decline of 11% was recorded.
13.4
13.4.1
Financial Aspects
13.4.2
13.4.2.1
Table 13.4.1: Operating result evolution - Teleneti
Operating result for the year Amounts in thou. USD Operating revenues Sales Revenues from services Other revenues Operating costs Material expenses Third parties services Personnel expenses Salaries Social insurance taxes Other costs for water and sewerage Depreciation Energy cost
2004 50.8 45.4 5.3 85.2 5.1 3.1 36.5 28.1 8.4 1.9 21.2 17.4
2005 40.5 35.3 5.1 70.9 4.8 1.0 32.7 25.3 7.3 2.1 14.5 15.9
2006 65.6 61.3 4.3 65.1 3.9 1.9 30.2 23.6 6.6 2.2 13.5 13.4
rao1e 2005-01-17
SWECO INTERNATIONAL
Operating result for the year Amounts in thou. USD Costs related to other activities Operating result
Source: Water Utility from Teleneti
2004
2005
2006
(34.5)
(30.4)
0.5
In 2006, approximately 93% of the operating revenues resulted from sales. The total operating result is negative for 2004-2005 with an improvement tendency in 2006, when operating result became positive. The evolution of the structure of operating revenues is presented in the following chart:
Figure 13.4.1: Structure of Sales - Teleneti
Structure of Sales
40.0 35.0 30.0
Thousand USD/y
The level of revenues increased in 2006 because the invoiced quantity increased due to metering and the number of illegal connections has decreased. Also, the tariffs increased significantly in January 2006. The evolution of the water losses is presented in the table below:
Table 13.4.2: The Evolution of Non Revenue water 2004-2006 - Teleneti
2004 Th. m3 82.6 40.5 -51%
2005 Th. m3 198.8 36.7 -82%
% 141% -9%
2006 Th. m3 % 152.4 -23% 50.8 38% -67%
The level of non-revenue water is important and the utility will try to decrease the losses in the following years. One of the main purposes
rao1e 2005-01-17
SWECO INTERNATIONAL
of the investment promoted with financial resources from The World Bank loan is to decrease water losses. The evolution of invoiced quantities is presented in the following table:
Table 13.4.3: The Evolution of Invoiced quantity 2004-2006 - Teleneti
2004 Th. m3 40.5 32.6 7.9 25.9 12.9 13.0
2005 Th. m3 36.7 32.2 4.5 23.7 12.2 11.5
2006 % 38.4% 41.9% 13.3% -3.4% -9.0% 2.6%
% Th. m3 -9.4% 50.8 -1.2% 45.7 -43.0% 5.1 -8.5% -5.4% -11.5% 22.9 11.1 11.8
The water consumption decreased in 2005 but increased considerably in 2006 as a result of an increase in water delivered to inhabitants. In the last years, the evolution of water production delivered to companies and institutions is the result of the poor economic situation of companies and public institutions. The weight of water delivered to companies and institutions is very low (represents only 11% in total invoiced water). Because the level of tariff for companies and institutions is significantly higher than for domestic customers, these entities have the tendency to find water from other sources (have their own sources) and to pay only sewerage services to the utility. The delayed adjustment of tariff compared with the cost increases had a negative impact on the performances of the water utility. The water utility can not control the tariff adjustment process, which is the prerogative of the Local Council. The water utility can propose tariff increases based on cost increase but the final decision is taken by Local Council. The evolution of the structure of total operating costs is presented in the following chart:
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 13.4.2: The Structure of Operating Costs - Teleneti

20.6%
E nergy
20.7%
O ther costs
46.5%
The most important cost elements are personnel costs (wages, salaries and related taxes), which represents 46.5% of operating expenditures in 2006 and energy costs, which represents about 20.6% of operating expenditure in 2006. The weight of energy costs was relatively constant in the last years. The level of personnel costs has the following characteristics: Number of personnel within the company is 31. Last salary increase was performed in March 2007 at 550 MDL (minimum wage in Moldova). The previous increase was introduced two years before the last one. The evolution of operating costs is presented in the following chart:
Figure 13.4.3: Evolution of operating costs Teleneti
40.0 35.0
Thousand USD/ye
rao1e 2005-01-17
SWECO INTERNATIONAL
The evolution of operating costs highlights the prudent policy regarding expenditures in the last years due to lack of financial resources. Costs decreased for energy and personnel during the analyzed period, while other costs had a stable trend.
13.4.2.2
Table 13.4.4: The Level of Account Receivables from Commercial customers as at December 31, 2006 - Teleneti
31.12.2006 USD % 6,451 31.7% 2,621 12.9% 11,255 55.4% 20,327 100.0%
The account receivables from commercial customers consist of the following main debtors: Town Hall (wastewater) Hospital (wastewater)
Table 13.4.5: Level of Account Receivables from domestic customers as at December 31, 2006 - Teleneti
31.12.2006 USD % 0.0% 1,986 6.0% 31,164 94.0% 33,149 100.0%
rao1e 2005-01-17
The management of the company needs to have among its priorities the increasing of the collection level. In the last years the water utility succeeded to maintain its collection ratio to high levels. In the current conditions, it is important to maintain the level of the outstanding debt at low levels (at least to maintain this level constant) or to improve the collection policy to be able to generate sufficient cash to pay the current obligations.
SWECO INTERNATIONAL
The level of short term liabilities has decreased in 2005, followed by an increase in 2006. A breakdown of the short-term liabilities is presented in the following table:
Table 13.4.6: Evolution of short-term liabilities (amounts in Thousand USD) Teleneti
2004 107.9 2.9 33.1 52.7 17.8 1.4
2005 114.3 3.7 34.4 55.3 19.4 1.5
2006 116.1 3.1 33.1 53.9 24.3 1.7
Table 13.4.7: Aging of liabilities to social fund - Teleneti
31.12.2006 USD % 1,714 3.2% 2,586 4.8% 49,631 92.0% 53,932 100.0%
Table13.4.8: Aging of liabilities to state and local budgets - Teleneti
31.12.2006 USD USD 3,351 13.8% 4,983 20.5% 15,927 65.6% 24,261 100.0%
The company does not have debts to the energy supplier. The water Company has a reschedule agreement with the fiscal authorities; debts tot the budget being rescheduled for a 5 years period.
rao1e 2005-01-17
SWECO INTERNATIONAL
13.4.2.3
Tariff analysis
Figure 13.4.4: Water Tariff Evolution - Teleneti
2.50 2.18 2.00 1.66 1.66 1.62 1.62 D estic om custom ers Instutions 1.00 0.51 C m om ercial custom ers 2.18
USD/m
1.50
0.50
0.41
0.40
2004 2005 2006
Last tariff increase was in May 2006. The Local Council has approved a tariff smaller than the one requested by the company. Depreciation was taken out of the tariff. The tariff evolution of the water tariffs for the last years is presented in the following chart:
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 13.4.5: Sewerage Tariff Evolution - Teleneti

1.80 1.60 1.40 1.20 1.05 1.05 1.03 1.03 D estic om custom ers 1.71 1.71
USD/m
1.00 0.80 0.60 0.40 0.20 2004 2005 2006 0.49 0.48 C m om ercial custom ers 0.62 P ublic Institutions
For the future the utility should consider the possibility and to take all the necessary actions to adjust the tariff more often to avoid the negative effects of the cost increases due to the inflation. In the future the water utility will have to cover also the possible debt service related to the loan from the World Bank. Briefly, the methodology for approving tariffs consists of the following steps: The utility specialists are preparing a study for tariff adjustment The study is sent to the Local Council and ANRE for approval.
13.4.2.4
rao1e 2005-01-17
Even if the utility has recorded achievements in the last years, financial management is still far from the requirements of a modern
SWECO INTERNATIONAL
utility. A lack of skills and human resources leads to limitations in the activities performed by the Finance Department. The accounting department consists of 4 persons: 1 chief accountant a cashier and one salary and materials accountant, one economist and 4 meter reader (including collection). Financial records are performed manually. We recommend the extensive use of computer for financial management. Accounting, billing and collection, financial forecast are just a few items which can be performed more efficient by using a computer. The financial management is limited to good management of payments, and is unable to give effective support to the overall management decision-making process, particularly the good management of the growth potential. Without minimizing the technical and implementation problems that the utility has to face in the near future, the financial planning area is most in need of enhancement and restructuring efforts. We recommend the introduction of cost accounting by creating cost centres for the main activities (water and sewerage). There is important to find out the performances of each sector. The process of financial planning does not include all the parties that should be involved with financial planning matters and has not the necessary prediction-correction role. The management team of the utility has to prepare a long-term strategy to assure the sustainable development. This analysis can be used as a starting point in preparing this strategy. Without a clear strategy for sustainable development of the activity, the utility continue to survive but with very limited potential and lower and lower performance. 13.4.3 Financial Selection Criteria By applying the criteria mentioned under section 2.4.3, the scores obtained by the water Operator from Teleneti are presented in the following table:
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 13.4.9: Scores for the Water Utility from Teleneti
2006 USD 116,087 65,591 177.0% 0 Points 4 1 5 2006 USD 65,591 65,093 1.01 6 2006 MDL 276 805 125 4 15
The results are analyzed in the final conclusions chapter when the decision regarding the introduction of Teleneti in the 10 list towns is analyzed.
13.5
13.5.1
Technical Aspects
Specific Task Objectives Related to Technical Analysis The specific tasks of this sub assignment for the Pre-Feasibility Phase were clarified together with the Client in the beginning of the assignment. The tasks agreed were as follows:
rao1e 2005-01-17
SWECO INTERNATIONAL
To prepare water and wastewater balances for 15 target towns to describe the present situation and water and wastewater projections for the year 2013; to assess the present status and condition of present water supply and sanitation facilities in 15 target towns in order to evaluate the need for replacements and/or needed rehabilitation on short-term basis; and to prepare preliminary short-term investment program for years 20092013 for the 15 target towns in order to improve ad develop the present functional level of their water supply and sewerage services.
13.5.2
Water supply and sewerage in Water is supplied via one (1) main water supply network (having length of approximately 18 km) and one (1) smaller network, which covers some houses from the old town centre (approximately 5 km of network). Only approximately 2,800 inhabitants are currently connected to the water supply network while more than 7,000 inhabitants are dependable on private wells. Water intake consists of 15 deep wells, out of which 11 wells are under renovation or taken out of use while four (4) wells are in operation. Water storage consists of two (2) water towers and four (4) underground water tanks out of which one is taken out of operation and two (2) have never been put into operation. Three (3) wells serve the main water supply network while one (1) well is used to pump water to water tower which is used to deliver water to the old town centre. The main water supply system has one (1) water tower and one (1) underground water tank. Water which is pumped directly from wells to water towers has no treatment at all. The only treatment process used is chlorination to underground water tank. However, the chlorination is done manually by pouring chlorine solution directly to the water tank. The total length of main sewerage network is 7 km. Sewerage network has two (2) pumping stations out of which one (1) is the inlet pumping station for the WWTP, which is located some 1 km south from the town centre. Only 1,730 inhabitants out of 10,000 are connected to sewerage network while rest are using septic tank system or dry lavatories. However, the number of septic tank users is not known.
rao1e 2005-01-17
SWECO INTERNATIONAL
The wastewater treatment plant was taken into operation in 1970s representing complete biological treatment process. At present the treatment plant is not in use and only wastewater treatment method is stabilization in ponds before discharging into near by river. In the following sections the water and wastewater balances and the technical status of water supply and sanitation facilities as well needed investments on preliminary level have been described in detail. 13.5.3 Water Supply System
13.5.3.1
Present System
Water intake consists of 15 recently renovated deep wells, out of which 11 are not operated while four (4) are in use. Every operated deep well has a submersible Moldavian made pump, type ECV (see Table 13.5.1). Water storage consists of two (2) water towers and two (2) underground water tanks out of which one is taken out of operation. The total capacity of water intake is 2,600 m3/day. Approximately 2,800 inhabitants out of 10,000 are currently connected to the water supply network.
Nr of deep well 2 1 14 15
Pump type ECV 8-16-140 ECV 6-10-235 ECV 6-10-140 ECV 6-6.3-185
Head (H, design), m 16 10 10 6.3
Flow (Q, design), m3/h 140 235 140 175
The main part of the town is supplied from three (3) deep wells (Nr.2, 1, 15), while the old residential area is supplied from the fourth well (Nr.14). There are also several private deep wells, which are property of groups of private households. Water, which is pumped directly from well Nr. 14 to two (2) separate water towers have no treatment at all. The only treatment process used is chlorination to underground water tanks. However, the chlorination is done manually by pouring chlorine solution directly to the water tank. At present, the quality of water from deep wells doesnt correspond to Moldavian Normative on Potable Water main reason being high ammonia concentration (see Table 13.5.2).
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 13.5.2: Analysed water quality provided by town of Teleneti.
Parameter Colour Turbidity Odor Taste pH Hardness Dry residuals Nitrites Chlorides Sulphates Copper Fe Ammonia Coli form
Unit Grade mg/l Grade Grade Mol/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l bact/l
Requirement 20 1.5 2 2 9 7 1,000 45 350 500 1.0 0.3 2.0 3
Actual 12.1 2.1 0 1 8.7 5 908 0.01 43 254 0.04 0.23 4-4.5 3
Used underground water tanks (4 units) have capacities of V1=300 m3 and V2=600 m3. At present, only 600m3 tank is in operation and supplies water to the main part of Teleneti. There are also two (2) water towers of type Rojnovskii with capacities of V3=25 m3 and V4=16 m3. The towers supply old and new residential areas. In addition to above mentioned, there is a pumping station with design capacity of 60 m3/h including chlorination room and two (2) reservoirs with capacity of 100 m3 each. There are two pumps of type TNS-60/132 installed at pumping station. The construction of this pumping station was started some ten years ago having purpose to pump water to water supply network from the main water pipeline which was supposed to have constructed from town of Soroca. However, this pipeline was newer implemented and construction works at the pumping station were newer finished. Water distribution network consists of steel, cast iron and polyethylene pipes. The range of diameters is from 50 mm to 200 mm. The total length of network is 23 km. Different lengths of used pipeline materials and age of the network have been presented in Table 13.5.3.
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 13.5.3: Water Supply Network in town of Teleneti.
DN Steel 50-100 150-200 Sub-total Cast iron 150 Polyethylene 50 100 Sub-total Total
< 10 years, km 0.9 1.4 2.3
10-20 years, km 1.1 1.0 2.1
20-30 years, km 0.3 0.3
30-40 years, km 4.3 5.0 9.3
40-50 years , km 4.2 4.2
> 50 years, km
Total km 10.8 7.4 18.2
1.0 0.5 2.2 2.7 5.0 0.4 0.4 2.5 0.8 0.8 1.1 9.3 4.2 1.0
1.0 0.9 3.0 3.9 23.1
13.5.3.2
In General, centrifugal pumps and other mechanical equipment are in a very poor condition. Most of the mechanical parts are worn out and old pumps are working at a decreased efficiency rate. Only one deep well has a protection area. There are no adequate protection areas for other wells. Water meters are not installed and operation is not monitored. Existing chlorination plant is in a poor condition and not operated properly. Machinery for chlorination is not in use and the dilution and dozing of chemical is carried out manually. Water tank with capacity of 600 m3 and water tower with capacity of 25 m3 have recently been renovated and supplemented with a protection area. Water tank with capacity of 300 m3 is taken out of use and there is no data available regarding its condition. During the past 10 years the water distribution network has partially been renovated and some kilometres of old cast iron and steel pipelines have been replaced with new polyethylene pipelines. However, most of the network is still made of steel being older than 10 years and only 3.9 km of the network is covered by polyethylene pipelines. Apa-Canal has reported several problems with old pipelines. Reported problems have been presented in the Table 13.5.4.
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 13.5.4: Reported problems within water distribution network.
DN 15-40 50-100 150-200 Total
Bursts Steel Cast iron 7 10 1 17 1
PE 2 2 4
Fissures Steel Cast PE iron 18 57 16 46 1 2 33 2 103
Spills Steel Cast iron 42 70 43 2 155 2
Total PE 1 1 126 145 49 318
An-accounted water losses in 2006 constituted 102,000 m3 (67% from the water volume pumped to the distribution), including: - for technological and/or own use, 2,700 m3/year; and - Non-revenue water, 99,000 m3/year The total amount of un-accounted water within Apa-Canal according to the study elaborated by Technical University of Moldova in 2005 is 33% (in 2005). The main cause of water losses are often bursts in water network due to wear of the pipes. 40% of the bursts are in the network of the consumers (up to the metering devices), and the water losses are attributed to Apa-Canal. These happen due to the fact that most of consumers are connected to the network without installation of the chambers for the metering devices at the connection point and without installation of the closing valves. Except this, the polyethylene pipes installed earlier (belonging both to consumers and Apa-Canal) does not correspond to the quality requirements and the pressure requirements. As a result, more than 30% of the bursts occur at the polyethylene pipes. In addition to that valves are worn out and dont assure necessary grade of closure. Together with renovation of the existing network the main focus shall be paid in extension of network in order to provide water supply for more inhabitants.
13.5.3.3
rao1e 2005-01-17
The deep well No. 1 with a capacity of 16 m3/h operates permanently. The well No. 2 with a capacity of 7 m3/h and No. 14 with a capacity of 10 m3/h operates periodically some 12-16 h per day. The deep well No. 15 with a capacity of 6 m3/h, which supplies water to district Old operates as necessary, the average being about 6 h per day.
SWECO INTERNATIONAL
The only water treatment process used is chlorination to underground water tanks. However, the chlorination is done manually by pouring chlorine solution directly to the water tank. Water which is pumped directly from the well No. 15 to the water tower is not treated at all. Pumped water flows are not metered and operation is not monitored automatically. Water pumped to the distribution from used deep wells contains considerably high concentration of ammonia. However, according to the analysis from past years the ammonia concentration is all the time decreasing. Still, it could be necessary to study alternatives to treat water in order to take ammonia out or to find substitutive water sources. However, the fact is that better quality ground water sources could most probably not be found and only actions to be considered could be implementation of proper treatment process or finding a proper surface water source which could require a water treatment plant and a several kilometres long pipeline thus there are no available surface water sources near . In addition to above mentioned, there are plans to connect town of Teleneti to town of Balti by new water pipeline. This pipeline would connect to the water pipeline from town of Soroca. The investment is planned to be financed by the Government of Moldova. However, during the time of this study any financing decisions were not made. Currently the water supply network is not divided into pressure zones. In the future, according to the design made by the local IPROCOM institute the water supply will be made in three zones: - lower zone from the second pumping station; - middle zone from the pressure reservoirs; - upper zone from the designed reservoir, situated at the highest elevation of the town. However, there are no decisions made regarding new investments on water supply network (to divide the network into three (3) zones). Beginning of year 2007 there were 857 household-meters installed, including 798 in private apartments and 59 in budget institutions and business entities. Taking into consideration that the number of apartments connected to the water supply system constitutes 1185 private apartment, the level of population within metering covers 67%. Level of metering for institutions and business entities is 100%. All private apartment meters are size of DN 15 while size of meters
rao1e 2005-01-17
SWECO INTERNATIONAL
installed at institutions and organizations vary from DN 15 to DN 50 depending on connection diameter. The efficiency for pumping is calculated basing on available data presented by Apa-Canal. In 2006, the total energy consumption within water intake (deep wells) was 185,000 kWh while total pumped water amount was 152,000 m3/year. The average energy consumption within water intake was 1.22 kWh/m3. Total energy consumption of water supply operations in 2006 was 190,000 KWh. 13.5.4 Sewerage System
13.5.4.1
Present System
The main sewerage network having length of 7.7 km is made of asbestos and ceramics pipelines. Network consist two (2) pumping stations out of which one (1) is the inlet pumping station for the WWTP and one (1) is used to pump sewerage from the town centre to the inlet pumping station of the wastewater treatment plant. WWTP is located some 1 km south from the town centre and some 700 meters from the inlet pumping station. Only 1,730 inhabitants out of 10,000 are currently connected to network. WWTP has a design capacity of 3,100 m3/day and consists the following treatment units: Horizontal grit chambers (2 units); Primary sedimentation (2 units); Aeration tanks (6 units); Sludge drying beds(3 units) and sludge disposal site; Biological ponds for effluent wastewater treatment; Sludge pumping stations; Chlorination plant; and Contact stabilization tank.
At present the treatment plant is not in use and only wastewater treatment method is stabilization in ponds before discharging into river.
rao1e 2005-01-17
SWECO INTERNATIONAL
13.5.4.2
The main sewerage network is from the year of 1985 and has not been renovated during past 22 years. The main material used is asbestos. Description of the sewerage network has been presented in the Table 13.5.5.
Table 13.5:. Description of the Sewerage network.
Main collector Street collectors Street collectors Street collectors District network Total
Pipe Material Asbestos Asbestos Asbestos Ceramics Asbestos
DN 300 200 150 150 150
Length, km 3.1 1.6 1.0 1.0 1.0 7.7
Operation period, years 22 22 22 22 22
The existing sewerage network (excluding pumping stations) could be considered to be in reasonable good condition. However, within this study any conditional analysis has not been carried out and it could only be estimated that at least proper flushing of pipelines and emptying of manholes will be needed. Still, the sewerage network covers only small part of the town and only some 20 % of inhabitants are currently connected to the sewerage system. In order to provide proper sanitation services the first priority regarding sewerage system would be enlargement of the network to cover more water consumers. In General, all mechanical equipment within two (2) existing sewerage pumping stations are in a very poor condition. Most of the mechanical parts are worn out and old pumps, valves and pipelines are at the end of their operational lifetime. In addition to that there is no adequate monitoring for operation. Also, existing Wastewater Treatment Plant is at the end of its operational lifetime. Taken into consideration the condition of existing structures and machineries and insufficient process technology it could be recommended that the whole treatment plant will be replaced with new modern and more compact WWTP taken into account current and future wastewater flows and loads. For new WWTP there is a possibility to use area reservation next to the existing plant.
rao1e 2005-01-17
SWECO INTERNATIONAL
It shall be noted that within this study only visible conditional analysis were carried out and proper analysis of existing structures would be needed during next project phase.
13.5.4.3
Sewerage pumping station which serves the town district having capacity of 50 m3/h operates depending on the quantity of the incoming wastewater, average being 2 hours per day. The inlet pumping station to the WWTP with capacity of 80 m3/h operates approximately 2.5-3 hours per day. The wastewater volume received by WWTP in 2006 was 35,500 m3, including: - Wastewater from private households, 22,900 m3; - Wastewater from business technological repairs, 500 m3; and - Storm water, underground and unforeseen water, 11,900 m3. The treatment of wastewater is made naturally in biological ponds thus the technological equipment at aeration tanks and sedimentation tanks are not in operation. The effluent quality in 2006 according to the analysis made by the Ecological Inspection has been presented in the Table 13.5.6.
Parameter Hydrogen indicies SS Dry residuals COD BOD5 Chlorides Ammonia Nitrites Nitrates Fe
Unit pH mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l
Inlet concentration 7.4 275 215.6 122.8 36.1 -
After treatment 7.2 26 906 109.8 25.7 123.7 9.3 0.18 16.6 0.4
Requirement 8.5 5 1000 30 3.0 300 0.5 0.08 40 0.5
rao1e 2005-01-17
Thus the lack of proper treatment facilities (treatment only in biological bonds) the wastewater quality does not meet the requirements set by Moldavian authorities. However, taken into
SWECO INTERNATIONAL
consideration the treatment only in biological ponds the treatment result is reasonable good and reported SS reduction being 95 %, BOD5 reduction being 80 % and even ammonia reduction being 75 %. Test result indicates that the used method for taking samples from the effluent wastewater is most probably insufficient and real reductions could be on lower level than reported. In 2002 local design institute IRROCOM made the renovation plan for the WWTP. According to Apa-Canal the rehabilitation works were scheduled for year 2007 and financing was planned from the state budget. However, at the moment any decisions regarding the renovation of the WWTP have not been made. Total energy consumption data of WWTP was not available (in 2006 WWTP was not in operation). The average used energy consumption at sewerage pumping stations (main Ps and district PS) in 2006 was 11,900 kWh while pumped wastewater amounts were 48,700 m3/year. The average energy consumption at pumping stations was only 0.24 kWh/m3, which indicates that reported pumped wastewater volume is much bigger than actual amount of pumped wastewater. Total energy consumption of sewerage system in 2006 was reported to be 19,440 kWh. 13.5.5 Prioritising of needed Investments for years 20092013
13.5.5.1
In order to prepare preliminary water demand and wastewater projections the water and wastewater flows were analysed for the last three (3) years (20042006). Preliminary water demand and wastewater projections for the year 2013 are based on general assumptions as follows: - The connection rate to the water supply network is 80 %; - Per capita consumption in Telenesti in 2013 is litres/capita/day; and - The connection rate to the sewerage system is 60 %.
rao1e 2005-01-17
120
SWECO INTERNATIONAL
In addition to above mentioned, some assumption related to rehabilitation of the water supply network were made as follows: - Due repairing and maintenance work and installation of new pipelines for new housing areas the amount of leakages from the water supply network have estimated to decrease some 40 %; - Due installation of new in-house flow meters and due better accounting system amount of unaccounted water is estimated to decrease some 30 % (billed water demand per capita will increase); and - Due better in-house flow measurement and possible increase in water tariffs per capita consumption has estimated to decrease some 20 %. Preliminary water and wastewater flow projections for Telenesti are summarised below in Table 13.5.7.
Telenesti Population connected to the Water Supply network Population connected to the Sewerage network Water pumped to the Distribution Non-Revenue Water Average total flow to WWTP
13.5.5.2
Needed Investments
rao1e 2005-01-17
Investment need estimations are done for the period of years 20072013 in order to secure sufficient operation of water supply and sanitation systems and to provide water supply and wastewater treatment for more inhabitants in Telenesti. The new water sources and/or pipeline to connect city of Telenesti by new water pipeline to city of Balti have not been taken into consideration as short term investment needs.
SWECO INTERNATIONAL
Thus the project to implement the water pipeline from city of Balti to Telenesti is under preparation and discussions on governmental level it is difficult to estimate needs for new investments related to water intake in city of Telenesti. It could be possible that in near future the government of Moldova makes the decision to extend the water pipeline from Balti to Telenesti. In that case the investment would be financed from the state budget. However, at this moment it is not known if this pipeline will be constructed until year 2013. Still, it would be feasible to wait until this issue is solved between the government authorities and city of Telenesti. Due this reason, the investments on new water treatment plant and/or new water intake for city of Telenesti have not considered to be feasible as proposed short-term investments. Short-term investments needed for water supply system are listed below, and serves as a basis for the proposed investment packages: - Rehabilitation of network which is older than 30 years (> 25 km); - Continuing of installation of in-house water meters; - Construction of new network including water meters for new consumers for at least 5,000 inhabitants (> 25 km); - Implementation of new chlorination plant and connection of used water towers to this plant; and - Implementation of automation and water flow metering for water intakes. In general, both sewerage network and WWTP require urgent rehabilitation and reconstruction works to enable reliable operation of the network and to fulfil the treatment requirements set by Moldovan authorities. The investments needed for sewerage system are listed below, and serves as basis for the proposed investment packages: - Flushing of existing sewerage network; - Enlargement of the network to cover at least 4,000 new inhabitants; - Reorganising the existing septic tank emptying system including supply of proper vehicle for this purpose; - Renovation of district and WWTP inlet pumping stations; and - Reconstruction of new WWTP for capacity of 700 m3/day (1st stage) with option for enlargement for total capacity of 1,200 m3/day (2nd stage).
rao1e 2005-01-17
SWECO INTERNATIONAL
13.5.5.3
Preliminary cost estimations for proposed investments packages within water supply and sanitation services are only preliminary estimations and will only be used as help in preparation of suitable investment packages in Feasibility Phase of the project. Proposed investment packages have been prepared so that there are two different packages; 1st investment package for works which shall be carried out in the very near future (within 1-2 years) and 2nd investment package for other works which must be implemented in order to secure the water and sanitation operations in long term: 1st Investment Package: 1.2 million USD in total Renovation of existing water intake system including new equipment for chlorination and treatment of ammonia and implementation of automation system for water intakes, 0.5 million USD; Supply of 1 new vehicle to be used for flushing sewerage system and 1 vehicle for septic tank emptying purposes, 0.2 million USD; and Construction of 6.0 km of new water supply network, 0.5 million USD. 2nd Investment Package, 9.0 million USD in total Construction of new water supply network and rehabilitation of old existing network (30 km in total), 3.0 million USD; and Rehabilitation and extension of existing sewerage network (including 2 sewerage pumping stations) and construction of new WWTP, 6.0 million USD.
rao1e 2005-01-17
SWECO INTERNATIONAL
14
14.1
Ungheni
General
Ungheni is situated at 135 km north-west from the capital town of Republic of Moldova, within the Middle Prut waterside.
Figure 14.1.1: Location of Ungheni
rao1e 2005-01-17
SWECO INTERNATIONAL
The official number of inhabitants is around 38000. According to a census mentioned by the Mayor the number was around 42000 inhabitants. The Mayor estimates anyway the real number to be around 38000 now. He then considers e.g. emigration to other countries, immigration of people from the surrounding rural areas but not formally registered in the town, the passport authoritys registrations etc. He also mentioned that people temporary working abroad during the census but in fact living in the town were not included in the census. The town has now a strong growth. As all over Moldova the industry in Ungheni to great extent collapsed after the fall of the Soviet Union. Since a few years Ungheni is now successively recovering, and has a number of industries and other businesses, some of them owned by other countries. One of the biggest is a carpet factory. The town has also an economic free zone where companies are exempted from tax. The economy is therefore strongly improving. Water supply has also been possible 24 hours per day during the three last years. The town has a local development plan for short, medium and longterm development off the town, up to 15 20 years. They have a General Urban Plan for development of different zones, e.g. a central zone with public facilities, living zones, industrial zones, zones for communal facilities etc. The town has also an investment plan including e.g. three hotels, a hospital with thousand beds, apartments etc.
14.2
14.2.1
History The first water services in Ungheni date back to year 1973. The water and wastewater services plus the other municipal technical services were then operated by the local authorities as one unit until 1976, when a separate Apa-Canal was created. This company was again combined with the other technical services in year 1988. In 1997 the services were divided again and Apa-Canal is since then a separate enterprise. The present Municipal Enterprise Apa-Canal was established in September 2000. The Mayor and the Director of Apa-Canal think it is a disadvantage to be a municipal unit. The state had for instance a group of good specialists supporting the local utilities, and they had a strategic
rao1e 2005-01-17
SWECO INTERNATIONAL
development for them. Now each municipality has to find its own way, and that has been difficult. 14.2.2 The Owner. How the Owner Governs Apa-Canal The Ungheni Municipal Council is the owner of the utility. The company is from organizational point of view placed as a department in the Town Administration.
Town Council
Town Administration
Mun. enterprise Apa-Canal
Mun. enterprise for territory dev and solid waste
Mun. enterprise for territory dev and solid waste
Figure 14.2.1: Simplified organization chart for the Town of Ungheni.
The Mayor appoints the Director of the utility and the Town Council approves the appointment. The present Director came to the utility 1979 and has been Director since 1990. He is fully entitled to take any decision in the daily operation of the utility. The Town Council Budget decides budget and tariffs. Other questions are discussed with the Mayor and the deputy Mayor. 14.2.3 Legal Aspects The Communal Services Utility has its own statutes but no separate service agreement with its owner describing for instance the level of service to the customers. The Municipality is the owner of all the assets including both water and wastewater facilities, and Apa-Canal operates these facilities. The town has no local rules or regulations in addition to the Moldavian state regulatory framework. In contracts with industries the Communal Services Utility uses state rules for discharge of sewage to the municipal network.
rao1e 2005-01-17
SWECO INTERNATIONAL
14.2.4
Organization and Management The organization chart for the Municipal Enterprise Apa-Canal in Ungheni is presented below. This organization was decided in July 2006 when a second engineer was employed in order to ease the workload for the first one. The organization seems to be very hierarchic with up to 6 levels, but seems in reality to work more efficiently.
Director
Head publ rel Principal econ
Assistant
Economy Dir
Production Dir
Commercial Dir
Store keeper
Head WWTP
Head WTP
Main WW PS Head
Garage
Head customer dept
Procurement
Safety eng
Accounting
Technical
Cashier
Energy dept
Dispatcher
Head laboratory
Head laboratory
Specialist Accountant Dispatcher
Specialist
Specialist
Cashier
Lawyer
Technical specialist Billing & collection
Laboratory worker
Figure 4.2.2: Organization of Apa-Canal in Ungheni

rao1e 2005-01-17
Laboratory worker
Microbiologist
Microbiologist
Specialist
Engineer
SWECO INTERNATIONAL
The utility has no formal management team and no long-term strategic meetings. The Director has operational meetings three times per week with the Heads of Sectors (third level in the hierarchy) and the Production and Commercial Directors. The Director has also daily meetings with the Economy Director. There is no written agenda and no minutes of meetings. These operational and economy meetings are the main internal information in the utility. There are no long-term strategic meetings. The company had previously a tough work to survive daily and had no possibility to define any long-term plan. There existed and still exists anyway a sort of long-term plan although not written on paper. This plan includes reduction of energy consumption through change of pumps and installation of frequency regulators and since recently also reduction of water losses. The situation is now better, and there is now also a written action plan for 2007. The first written action plan was for 2006. The Director reports weekly to the Mayor and yearly to the Town Council the progress of the planned actions. There are also ad hoc meetings sometimes. The utility will soon also start preparing longer plans. The utility has a separate cost centre and budget for each of the water and wastewater sectors. The heads of these sectors have however not much freedom and rights to influence the size and content of the budget. They have obligations to follow it under rather strict detailed control but no real tools or rights to act themselves. In order to introduce more rights for the personnel, there is a need for more financial and technical knowledge according to the Director. The company has introduced a form of individual incentives for the personnel, and there is a possibility to get some money for good individual results and efforts at the end of each year. The utility has 5 computers of which 1 for accounting, 1 for the secretary and 3 for commercial purposes. The utility has the management information system 1C, but accounting is carried out manually. The system is not integrated. The type of management stile is to major extent a top-down management with information upwards and orders downwards. Principals of accountable management or management by objective are not used.
rao1e 2005-01-17
SWECO INTERNATIONAL
14.2.5
Staff. Efficiency and training needs Ungheni Apa-Canal has 153 employees. As the number of water supply customers the day for the visit were 12821 including 8474 apartments, 3976 individual houses, 371 companies and budget organizations, the productivity base on this was then 84 customers per employee. Since 2003 Apa-Canal is responsible also for the pipes in the buildings and not only too the buildings. The reason was that no other organization had enough capacity for this responsibility. The number of persons connected to the water supply is approximately 17000 in apartments and 8500 in individual houses. The efficiency measures as number of persons served per employee is therefore around 167. The number of persons connected to the wastewater network is 17000 in apartments and only 420 in individual houses. The number of staff is decreasing. In 2006 the number of persons fired or leaving for other reasons were 33. The utility also employed 25 persons. The Director estimates the average age of the staff to be 43 45 years. There is a strong need for training in most technical and financial areas, e.g. welding of polyethylene pipes, electricity, computer use in general, computerized accounting, chlorination, operation of recipients operation of hoisting equipment. The average salary in the whole company is around 2000 lei per month. This is not enough high for attracting and keeping important staff. There is a vocational school in the town, and sometimes it is possible to get trained personnel from there, but they are normally leaving very soon, often for work abroad. The Director expressed a great interest in supporting training, but there exist no written plan for training of the personnel.
14.2.6
rao1e 2005-01-17
Estimation of Consumption. Billing and Collection 53% of the household customers and 100% of the companies and budget organisations have meters. There are block meters at the
SWECO INTERNATIONAL
connections to most apartment houses. Apa-Canal owns these. The customers own all meters in the apartments and individual buildings. Consumption norms are used for customers without meters. Personnel from Apa-Canal are reading most meters. A few customers are reading the meters themselves Apa-Canal visits those customers every second or third month. The meter readers distribute the bills monthly. The customers may pay at Apa-Canal, in banks and in post offices. The collection rate 2004 2006 was the following: No 1. 2. 3. 4. Consumer category State budget Local budget Population Other consumers Unit % % % % 2004 97 84 61 72 2005 97 87 67 84 2006 81 97 70 91
Customers not paying may be cut off from water supply after court procedure. This is however difficult for individual apartments and not practiced for boarding schools and the frontier station. 14.2.7 Relations to customers and other stakeholders The utility is using media as newspapers, TV and radio for information to the customers. They are also informing the customers through a paper on the door in case of planned stop of the water supply. 14.2.8 Consultants Comments Water is now supplied 24 hours per day, which is good. The organization is, at least on paper, rather complicated and hierarchic, but seems to work rather efficiently. There is a strong topdown management as in the majority of the utilities visited. The rate of meters among households is 53% which can be improved. The collection rate, 70-91% among different customer categories, is improving but still low and should be improved.
rao1e 2005-01-17
SWECO INTERNATIONAL
The efficiency, 84 customers per employee or 167 consumers per employee, is better than average among the visited utilities and successively improving. The level of computerization, 5 computers, is medium. The annual action plans are a good tool for the development of the utility. Despite the average salary of 2000 lei per month, one of the highest among the visited utilities, it seems to be difficult to attract qualified personnel. The company has improved a lot during the last 2-3 years, and the Consultant judges that the company is from institutional point of view qualified for continued participation in the project. Further comments, see section 15.
14.3
14.3.1
Social environment in Ungheni
14.3.1.1
Population
Number of population for Ungheni town as at 1st of January 2007 is the following:

(Thou.) 37.9 37.9 38.9
rao1e 2005-01-17
SWECO INTERNATIONAL
14.3.1.2
In present, the town has 6 high schools, 2 gymnasiums, 2 primary schools, 1 hostel school for 420 persons, 5 kinder gardens for 1500 kids, 2 polyvalent schools, a medicine college, 2 sport schools, a music school and an art school. A total of 12,000 children are prepared by the education institutions. A hospital with 480 beds and 2 clinics with a capacity of 1360 visits per shift are located in Ungheni.
14.3.1.3
Estimation of Household Revenues Average nominal monthly salary - National level Average nominal monthly salary - Ungheni County Disposable household income (national average per household member) Average monthly pension (national level) Average household disposable income in the county (per member) Average monthly pension at county level Number of persons in household Average household (no of persons) Pensioner household (no of persons) Average household disposable income in the county (per household) Average monthly pensioner household revenues at county level (per household) Lei Lei Lei Lei Lei Lei
Ungheni 2004 2005 1,103.1 1,318.7 831.8 1,021.5 491.4 325.3 370.5 245.3 568.6 383.4 440.5 297.0
No. No. Lei Lei
3.0 1.8 1,111.6 441.5
3.0 1.8 1,321.4 534.6
14.3.2
Economic environment in Ungheni
14.3.2.1
Natural resources
rao1e 2005-01-17
Total surface of Ungheni town is 16.4 square km. This is a relatively small surface, due to the fact that Ungheni Town does not have an agricultural area.
SWECO INTERNATIONAL
14.3.2.2
Economy
In Ungheni town are registered approximately 1250 economic agents, most of them are operating in the commerce sector -179. Other branches of local economy are the following: -industry -38, agriculture -29, constructions -16, transportation -3.
14.3.2.3
Industry
The town has a various economy, industrial sector being represented by enterprises from alimentary industry, light industry, clothes industry and construction materials industry. Volume of industrial production in Ungheni Raion, compared to the total industrial production in Republic of Moldova, is presented in the following table:
Table 14.3.3: Volume of Industrial Production Evolution Ungheni Raion
Volume of industrial production in 2006 Total out of which Ungheni
Total production on Republic of Moldova increased with 26% during the period 2004-2006. For Ungheni Raion, the production decreased significantly with 325% (in current prices), demonstrating an improvement of the local industry environment.
14.3.2.4
Financial situation of Commercial Companies in Ungheni Raion, compared to the total financial situation of Republic of Moldova, is presented in the following table:
Financial status Number of reporting enterprises, out of which Profitable enterprises Enterprises with loss Average Number of employees
Jan.-Sept. 2004 Total Ungheni

29423 11289 13906 572786 410 152 151 9349

31870 12380 14893 570143 443 162 171 8984

34700 13155 16532 569698 526 187 180 9012
rao1e 2005-01-17
SWECO INTERNATIONAL
Financial result before tax (profit/loss) -mil. Lei Sales revenues-mil. Lei Receivables related to commercial invoices and budget compensation total, mil. Lei Debts -mil. Lei
2790 53031 19140 61291
5.6 385.8 135.3 559.6
3424 66870 22717 68420
13.7 540.1 172.7 670.7
3689 79052 26867 81804
14.5 764.5 217.9 859.1
As can be observed from the table above, the number of profitable enterprises at national level is increasing, but the percentage of profitable enterprises in total reporting enterprises remains approximately the same (46%). Average number of employees at national level kept a stable trend. In Ungheni Raion, during the analyzed period, the average number of employees registered a decrease of 3%. Financial result before tax recorded an increasing evolution. For 2005, financial result increased 2.44 times and, for 2006, financial result increased with 6%. Sales revenues increased significantly in 2005 (40% compared to 2004) and continued also with an increase in 2006 (41% compared to 2005). Receivables related to commercial invoices and budget compensation recorded a constant growth of 27%, in 2005 and also in 2006. During the analyzed period, debts recorded a growth of 19.9% in 2005, compared to 2004, continuing to increase in 2006 with 28%.
14.4
14.4.1
Financial Aspects
14.4.2
Analysis of the historical financial performances In order to obtain a clear picture of the financial status of the company, we have briefly analyzed the financial statements for the
rao1e 2005-01-17
SWECO INTERNATIONAL
years ended at December 31, 2004, December 31, 2005 and December 31, 2006.
14.4.2.1
Table 14.4.1: Operating result evolution - Ungheni
Source: Water Utility from Ungheni
2004 520.7 460.5 60.2 605.8 97.0 21.0 249.6 191.8 57.8 40.0 102.7 95.6 (85.1)
2005 550.3 508.8 41.5 628.1 100.1 14.9 283.4 219.2 64.2 31.9 106.8 90.9 (77.7)
2006 786.2 735.8 0.0 50.4 794.0 153.2 27.3 359.4 281.7 77.8 49.2 106.7 98.2 (7.8)
In 2006, approximately 93.49% of the operating revenues result from sales. Total operating result was negative for the entire period of analysis with an improvement tendency in 2006. The evolution of the structure of operating revenues is presented in the following chart:
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 14.4.1: Structure of Sales - Ungheni

Structure of Sales
450.0 400.0 350.0
Thousand USD/y
300.0 250.0 200.0 150.0 100.0 50.0 2004 2005 2006 W ater W astewater
Even if the invoiced quantity decreased in 2006, the revenues increased due to the adjustment of tariffs in January 2006. The evolution of the water losses is presented in the table below:
Table 14.4.2: The Evolution of Non Revenue water 2004-2006 - Ungheni
2004 Th. m3 1,453.8 1,082.9 -26%
2005 Th. m3 1,657.3 1,234.4 -26%
% 14% 14%
2006 Th. m3 2,420.0 1,247.7 -48%
% 46% 1%
The level of non-revenue water is important and the utility will try to decrease the losses in the following years. One of the main purposes of the investment promoted with financial resources from The World Bank loan is to decrease water losses. As can be observed from the table below, the water losses are increasing considerably in 2006. The evolution of invoiced quantities is presented in the following table:
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 14.4.3: The Evolution of Invoiced quantity 2004-2006 - Ungheni
2004 Th. m3 1,082.9 728.7 354.2 724.2 463.8 260.4
2005 Th. m3 1,234.4 830.6 403.8 823.8 504.9 318.9
2006 % Th. m3 14.0% 1,247.7 14.0% 808.0 14.0% 13.8% 8.9% 22.5% 439.7 844.5 482.0 362.5 % 1.1% -2.7% 8.9% 2.5% -4.5% 13.7%
Water consumption slightly increased in 2005 and 2006 for both inhabitants and private companies. For wastewater, invoiced quantities to private companies and institutions have increased significantly both in 2005 and 2006. The weight of water delivered to companies and institutions is low (represents only 32% in total invoiced water). Because the level of tariff for companies and institutions is significantly higher than for domestic customers, these entities have the tendency to find water from other sources (have their own sources) and to pay only sewerage services to the utility. The delayed adjustment of tariff compared with the cost increases had a negative impact on the performances of the water utility. The water utility can not control the tariff adjustment process, which is the prerogative of the Local Council. The water utility can propose tariff increases based on cost increase but the final decision is taken by Local Council. The evolution of the structure of total operating costs is presented in the following chart:
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 14.4.2: The Structure of Operating Costs - Ungheni

Structure of operating cos ts 12.4% 28.9%
E nergy
O ther costs
13.4%
45.3%
The most important cost elements are personnel costs (wages, salaries and related taxes), which represents 46.3% of operating expenditures in 2006 and other costs, which represents about 26.9% of operating expenditure in 2006. The weight of energy costs was relatively constant in 2005 and decreased in 2006. The level of personnel costs increased continuously based on two factors: The salaries have increased in nominal terms every year. The increase of salaries has to be performed based on premises stipulated in the law regarding evolution of salaries in the public sector. This element is more or less not under the control of the water utility. Number of employees increased during the period under analysis. The evolution of operating costs is presented in the following chart:
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 14.4.3: Evolution of operating costs Ungheni

400.0 350.0
Thousand USD/ye
Source: Water Utility from Ungheni While energy costs recorded a stable evolution, personnel costs continuously increased during the period. Other costs recorded an important growth in 2006.
14.4.2.2

Table 14.4.4: The Level of Account Receivables as at December 31, 2006 - Ungheni
31.12.2006 USD % USD % 56,732 34.9% 21,718 13.4% 83,896 51.7%
The account receivables from commercial customers consist of the following main debtors: DA office, military centre, artillery brigade, and border police. The management of the company needs to have among its priorities the increasing of the collection level. In the current conditions, it is important to maintain the level of the outstanding debt at low levels (at least to maintain this level constant) to be able to generate sufficient cash to pay the current obligations. This is essential for a sound development.
rao1e 2005-01-17
SWECO INTERNATIONAL
The level of short term liabilities has decreased in the last years. A breakdown of the short-term liabilities is presented in the following table:
Table 14.4.5: Evolution of short-term liabilities (amounts in Thousand USD) Ungheni
2004 76.9 51.6 14.0 8.3 2.5 0.6
2005 26.4 7.8 16.0 1.0 1.0 0.7
2006 36.3 1.1 27.3 3.4 3.7 0.7
The utility does not have outstanding debts regarding liabilities to the budgets.
14.4.2.3
Tariff analysis
rao1e 2005-01-17
SWECO INTERNATIONAL
Figure 14.4.4: Water Tariff Evolution - Ungheni

0.80 0.70 0.60 0.50 0.46 0.46 0.69 0.69
USD/m
0.45
0.45
D estic om custom ers Instutions
0.40 0.30 0.20 0.10 2004 2005 2006 0.12 0.12 0.15
The last tariff increase for water services was in January 2006. The company declared that the tariffs have a low level, so an increase is needed. The mayor has expressed its support for future tariff adjustments. The tariff evolution of the water tariffs for the last years is presented in the following chart:
Figure 14.4.5: Sewerage Tariff Evolution Ungheni
0.70 0.61 0.60 0.51 0.50 0.51 0.50 0.50 D estic om custom ers 0.61
USD/m
0.40 0.30 0.21 0.20 0.10 2004 2005 2006 0.16 0.15 C m om ercial custom ers P ublic Institutions
For the future the utility should consider the possibility and to take all the necessary actions to adjust the tariff more often to avoid the negative effects of the cost increases due to the inflation. In the future the water utility will have to cover also the possible debt service related to the loan from the World Bank.
rao1e 2005-01-17
SWECO INTERNATIONAL
Briefly, the methodology for approving tariffs consists of the following steps: The utility specialists are preparing a study for tariff adjustment The study is sent to the Local Council and ANRE for approval.
The management team considers that a tariff increase will solve most of the financial problems of the utility. One of the most wide spread idea about tariff increase in Moldova is to increase more of tariffs for private entities and institutions and to increase less the tariffs for inhabitants. In most of the cases this is mainly a political decision with the purpose of maintaining a lower pressure on the domestic customers. This approach leads to an increase of the cross-subsidization between entities (private companies and institutions) and inhabitants. This discourages the economic development.
14.4.2.4
Even if the utility has recorded achievements in the last years, financial management is still far from the requirements of a modern utility. A lack of skills and human resources leads to limitations in the activities performed by the Finance Department. The accounting department consists in 6 persons: 1 chief accountant, 1 accountant for materials, 1 accountant for sales, 1 cashier, 1 economist. It has 5 computers =1 used for secretariat, 1 for computing salaries, 1 for sales records, 2 for domestic customers. They do not keep accounting records on computer and accountants do not have computer knowledge. The financial management is limited to good management of payments, and is unable to give effective support to the overall management decision-making process, particularly the good management of the growth potential. Without minimizing the technical and implementation problems that the utility has to face in the near future, the financial planning area is most in need of enhancement and restructuring efforts.
rao1e 2005-01-17
SWECO INTERNATIONAL
We recommend the introduction of cost accounting by creating cost centres for the main activities (water and sewerage). There is important to find out the performances of each sector. We recommend the extensive use of computer for financial management. Accounting, billing and collection, financial forecast are just a few items which can be performed more efficient by using a computer. The process of financial planning does not include all the parties that should be involved with financial planning matters and has not the necessary prediction-correction role. The management team of the utility has to prepare a long-term strategy to assure the sustainable development. This analysis can be used as a starting point in preparing this strategy. Without a clear strategy for sustainable development of the activity, the utility continue to survive but with very limited potential and lower and lower performance. 14.4.3 Financial Selection Criteria By applying the criteria mentioned under section 2.4.3, the scores obtained by the water Operator from Ungheni are presented in the following table:
Table 14.4.6: Scores for the Water Utility from Ungheni
Historical liabilities Liabilities to Suppliers, Social Fund and State of Local Budgets Total Operating revenues Weight of Liabilities in Total Revenues Number of points Tariff adjustment Last tariff adjustment was in January 2006 In the period 2004-2007 there was only 1 tariff adjustment Total Operating ratio
rao1e 2005-01-17
2006 USD 36,259 786,171 4.6% 10 Points 4 1 5 2006 USD 786,171
Operating revenues
422
SWECO INTERNATIONAL
Operating profit Operating revenues/operating costs Points Account receivables collection period Trade receivables(A) Sales (B) (A/B)*365- days Points Total points
794,018 0.99 4 2006 MDL 2,095 9,662 79 8 27
The results are analyzed in the final conclusions chapter when the decision regarding the introduction of Ungheni in the 10 list towns is analyzed.
14.5
14.5.1
Technical Aspects
Specific Task Objectives Related to Technical Analysis The specific tasks of this sub assignment for the Pre-Feasibility Phase were clarified together with the Client in the beginning of the assignment. The tasks agreed were as follows: To prepare water and wastewater balances for 15 target towns to describe the present situation and water and wastewater projections for the year 2013; to assess the present status and condition of present water supply and sanitation facilities in 15 target towns in order to evaluate the need for replacements and/or needed rehabilitation on short-term basis; and to prepare preliminary short-term investment program for years 20092013 for the 15 target towns in order to improve ad develop the present functional level of their water supply and sewerage services.
14.5.2
Water supply and sewerage in Ungheni Water is supplied via one (1) main water supply network, having length of approximately 70 km. Approximately 25,500 inhabitants are currently connected to the water supply network while more than 12,400 inhabitants are dependable on private wells.
rao1e 2005-01-17
SWECO INTERNATIONAL
Water supply in Ungheni town is organized from the surface water intake on Prut River. The water is pumped through two pipelines of siphon type with diameter of 500 mm to the treatment plant. Treatment plant includes two levels suspension decanters and rapid sand filters. During the treatment process, water is chlorinated two times. The treated water is stored in two drinking water tanks of 600 m3 each, and pumping station SP2 pumps water directly to the network. The surplus of water is stored in two (2) counter-tanks with total capacity V=3000 m3 each. Currently the counter-tanks are not in operation. There are seven (7) booster pumping stations for multilevel buildings. The total length of main sewerage network is 60.8 km. Sewerage network has one (1) pumping station, which is the inlet pumping station for the WWTP. Only approximately 17,500 inhabitants out of 37,900 are connected to sewerage network while rest is using septic tank system or dry lavatories. However, the number of septic tank users is not known. The WWTP with a capacity of 15,000 m3/day was constructed in 1974 and is situated in the village of Valea Mare, 10 km south from the town. Wastewater treatment process represents full biological treatment process. After treatment water is discharged into near by river Prut. In the following sections the water and wastewater balances and the technical status of water supply and sanitation facilities as well needed investments on preliminary level have been described in detail. 14.5.3 Water Supply System
14.5.3.1
Present System
Approximately 2,800 inhabitants out of 10,000 are currently connected to the water supply network. Water supply in Ungheni town is organized from the surface water intake on Prut River. The total capacity of water intake is 12,700 m3/day. The water is pumped through two pipelines of siphon type with diameter of 500 mm to the treatment plant. Pumps used for pumping water from river to treatment plant are presented in Table 1.
rao1e 2005-01-17
SWECO INTERNATIONAL
The water treatment plant is designed and operates according to the classical scheme, which includes: - Two (2) vertical mixers of 2.1x2.1 m and height of superior part 1.8 m; - four (4) sedimentation tanks with dimensions of 9x9 m and H=6 m; - Rapid sand filters with dimensions of 3x8 m sand height H=6 m. The thickness of quartz sand layer is of 1.2 m. The drainage is of polymer concrete with a thickness of 0.1 m; - Two (2) reservoirs of V=600 m3, D=13 m, H=4.84 m. For the intensification of settling process in the sedimentation tanks, within the WTP operates chemicals plant which has two reservoirs of V=6.4 m3 and dimensions of 1.5x3x3.6 m for dissolving of coagulant. For intensification of Al2(SO4)3 coagulant dissolving reaction it is used lime solution, which is prepared in two reservoirs of lime slacking with dimensions of 6x6x3.6 and 6x3x3.6. At the WTP chlorination equipment is in use. Chlorination is made in two stages: - first chlorination - 3.5 mg/dm3; - post-treatment chlorination - 0.5 mg/dm3. For chlorination process are used vacuum chlorination equipment of type Moskva 2 operating and 2 reserve. After the washing of the filters, the water is discharged into the industrial wastewater sewerage system. The treated water is stored in two drinking water tanks of 600 m3 each, and pumping station SP2 pumps water directly to the network. The surplus of water is stored in two (2) counter-tanks with total capacity V=3000 m3 each. Currently the counter-tanks are not in operation.
Table 14.5.1: Pumps used for water supply. (only pumps which are in operational condition are presented)
Pumping station
Pump type FA15.84D EMI FA15.84D EMI VVN-12M
Head (H, Flow (Q, Year of Status design), m design), installation m3/h 20 20 NA 250 250 NA 2004 2004 2003 In use In use In use
PS1 (water intake)

rao1e 2005-01-17
SWECO INTERNATIONAL
Pumping station WTP for water reuse PS for chemicals at WTP
Pump type SD160/10 SD160/10 PMK-3 AK 20/30 ND 1600/10 NP80/200 WILO NP80/200 WILO NP80/200 WILO NP80/200 WILO 14NDN
Head (H, Flow (Q, Year of Status design), m design), installation m3/h 10 160 1982 In use 10 160 1982 In use NA NA 1973 In use 30 20 1979 In use 1,0 1,6 1985 In use 60 60 62 62 10 162 162 144 144 1500 2004 2004 2004 2004 1973 In use In use In use In use In use
PS2 District
At present, the quality of treated water corresponds to Moldovan Normative on Potable Water with exception of water turbidity (see Table 14.5.2).
Table 14.5.2: Analysed water quality provided by town of Ungheni.
Parameter Colour Turbidity Odor Taste pH Hardness Dry residuals Nitrites Chlorides Sulphates Copper Fe Ammonia Coli form
Unit grade mg/l grade grade Mol/l mg/l mg/l mg/l mg/l mg/l mg/l mg/l bact/l
Requirement 20 1.5 2 2 <9 7 1,000 45 350 500 1.0 0.3 2.0 3
Actual 20 8.5 2 2 8.05 4 400 3.5 27 108 0.01 0.1 0.36 3
rao1e 2005-01-17
Used underground water tanks (2 units) have capacities of V1=V2=600 m3 each. At present, counter-tanks with total capacity 3000m3 are not in operation.
SWECO INTERNATIONAL
There are seven (7) booster pumping stations for multi-storey buildings (See Table 14.5.3).
Table 14.5.3: Pumps used for pressure maintenance in water distribution network.
Pump type
COR-1 MVI 3202-62 COR-1 MVI 1602-6-2G-GE COR-2 MVI 1604-6/CR-EB1 COR-2 MVI 1604-6/CR-EB2 COR-1 MVIE 1602-G-GE1 COR-1 MVIE 1602-G-GE2 COR-1 MVIE 1602-G-GE3 COR-1 MVIE 1602-G-GE4
Head (H, design), m

44 32 48 48 32 32 32 32
Year of installation
2003 2003 2004 2004 2005 2005 2005 2005
Status In use In use In use In use In use In use In use In use
Water distribution network consists of steel, cast iron and polyethylene pipes. The range of diameters is from 50 mm to 200 mm. The total length of network is 23 km. Different lengths of used pipeline materials and age of the network have been presented in Table 14.5.4.
Table 14.5.4: Water Supply Network in town of Ungheni.
Diameter, mm Steel 50 80 100 150 200 300 400 Cast iron 65 80 100 150 200 300 400 Asbestos 150
< 10 years, km
10-20 20-30 30-40 40-50 > 50 Total years, years, years, years, years, km km km km km km 4.3 1.2 0.4 1.2 1.3 0.4 1.7 0.4 0.2 3.3 1.4 0.3 4.6 0.1 2.0 0.4 0.6 4.5 2.2 1.7 1.5 1.4 0.6 4.2 0.3 2.1 8.6 5.3 11.0 1.4 1.5 3.3 2.0 0.4 0.6 6.0 4.5 2.5 8.0 9.8 11.5
0.3 0.7
1.0 1.6 0.1 8.0 0.1 0.3
0.5 9.6
0.2 0.2
rao1e 2005-01-17
11.2
SWECO INTERNATIONAL
Diameter, mm
< 10 years, km
10-20 20-30 30-40 40-50 > 50 Total years, years, years, years, years, km km km km km km 1.6 0.3 0.1 0.2 1.6 1.1 79.1
Polyethylene 75 100 0.5 TOTAL
14.5.3.2
In General, centrifugal pumps and other mechanical equipment are in reasonable good condition. In 2003-2004, most of the pumps were replaced with new ones and are working at a good efficiency rate. Water intake has a protection area. Water meters are installed and operation is monitored. Existing treatment plant is in a poor condition, but it is operated properly. All technological pipelines are worn out and should be completely renovated. The tanks made of reinforced concrete are in good condition. Chlorination plant is not operated properly, following all safety techniques. Chlorination plant is situated in the filters building, which is not allowed. There is another one building for chlorination plant, but it is not finished. Treatment and storage of the sludge is not made according to the requirements due to the inefficiency of the respective facilities. During the past 10 years the water distribution network has partially been renovated and some hundred metres of old cast iron and steel pipelines have been replaced with new polyethylene pipelines. However, most of the network is still made of steel being older than 10 years. Ungheni Apa-Canal has reported several problems with old pipelines. Reported problems have been presented in the Table 14.5.5.
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 14.5.5: Reported problems within Ungheni water distribution network.
Year 2000 2001 2002 2003 2004 2005 2006
No. of total bursts 108 131 93 176 236 274 309
Repaired in 24 hours 96 121 85 162 221 253 292
Up to 72 hours 10 8 8 12 14 18 12
More than 72 hours 2 2 2 1 3 5
According to the table above, the number of bursts on water supply and sewerage networks is rising. The biggest losses are as follows: - bursts of the steel pipes with diameter of 100 400 mm; - deterioration of joints on the cast iron pipes DN150-500 mm; - water losses from valves; - water losses not registered by meters. Un-accounted water losses in 2006 constituted 1247,700 m3 (43% from the water volume pumped to the distribution). Together with renovation of the existing network the main focus shall be paid in extension of network in order to provide water supply for more inhabitants.
14.5.3.3
During last three years (2004-2006) the water is supplied 24 hours per day. Pumping station at water intake PS1, Water treatment plant and pumping station PS2 are operated non-stop. At water intake, one pump of type FA 15.84D EMI is working permanently, the other one pump FA 15.84D EMI works for 10 h/day, and pump VVN-12M work 2 h/day. Actual operating capacity of PS1 is 6,600 m3/day. At PS2, two pumps of type WILO NP80/200 operate permanently; the other two pumps WILO NP80/200 operate 18 h/day and 19 h/day.
rao1e 2005-01-17
SWECO INTERNATIONAL
There is also a pump of type NDN, which is used to cover peak demands and is operated 1 h/day. The town is divided in three districts (Centre, Beresti, Danuteni), however water distribution network has only one pressure zone, including 7 booster pumping stations for the 9-level apartment blocks. Pumps at booster stations are used in non-stop mode to maintain the pressure for multilevel buildings. There are 8,447 consumers living in multilevel houses connected to water supply network and metered. The number of other metered consumers is 4,506 persons. The rate of consumers metered 53.34%. Installed meters are of types Lorenz, Zenner, LXH, Maddlena, and Almess. There are several problems with water meters, reported by Ungheni Water utility: rotating parts are made of metal and the population use magnets to stop them; plastic parts are worn out and easily deteriorate; metering errors.
All private apartment meters are size of DN 15 while size of meters installed at institutions and organizations vary from DN 15 to DN 50 depending on connection diameter. The efficiency for pumping cannot be calculated because the available data presented by Ungheni Apa-Canal are not sufficient. Anyway, taking into consideration the fact, that most of pumps are new German pumps, the efficiency rate is considered good. The total energy consumption of Ungheni water supply system is presented in Table 14.5.6.
Table 14.5.6: Energy consumption for operation year 2006.
Facilities WTP Booster stations for multi-storey buildings
kWh/year 2004 2005 2006 1,180,000 1,127,000 1,295,000 64,100 69,800 88,800
rao1e 2005-01-17
SWECO INTERNATIONAL
14.5.4
Sewerage System
14.5.4.1
Present System
The main sewerage network having length of 60.8 km is made of asbestos, ceramics, steel and cast iron pipelines. Network includes one (1) pumping station, which is the inlet pumping station for the WWTP. WWTP is located the village of Valea Mare, some 10 km south from the town centre and some 8 km from the inlet pumping station. Only 17,446 inhabitants out of 37,900 are currently connected to network. Pumps at WWTP inlet pumping station are presented in Table 14.5.7.
Table 14.5.7: Pumps at WWTP inlet pumping station
Nr
Pressure Discharge Power Year of Head (Q), m3/h (P), installation (H), m KW WWTP inlet pumping station 1 NG-144-56 56 144 22 1996 2 NG-144-56 56 144 22 1996 3 -450-56 56 450 160 1988 -45095 450 250 1990 4 95/2 5 -125-80 48 140 22 1999 6 -125-80 48 140 22 1999 7 -450-56 56 450 132 1989 -45095 450 250 1994 8 95/2 -20025 200 7,5 1990 9 150-440/2 100-6525 100 7,5 1991 10 25/4
Pump type
Status
In use In use In use In use In use In use In use In use In use In use
WWTP, constructed in 1974, has a design capacity of 15,000 m3/day and consists the following treatment units: Grit removal (2 units) with mechanical screens; Primary sedimentation (8 units); Aeration tanks (3 units); Secondary sedimentation tanks (6 units); Sludge drying bed and five sludge final disposal platforms; Sludge pumping and blowers station;
rao1e 2005-01-17
SWECO INTERNATIONAL
- Chlorination plant; and - Contact stabilization tanks (2 units). The plant is designed to treat the wastewater with the following parameters of pollutants: MS - 460 mg/l; BOD total 770 mg/l.
Wastewater treatment process represents full biological treatment process. After treatment water is discharged into near by river Prut.
14.5.4.2
The main sewerage network is from the year of 1950-1960s and has not been renovated during last years. The main materials used are asbestos. Description of the sewerage network has been presented in the Table 14.5.8. The existing sewerage network (excluding pumping stations) could be considered to be in reasonable good condition. However, within this study any conditional analysis has not been carried out and it could only be estimated that at least proper flushing of pipelines and emptying of manholes will be needed. Still, the sewerage network covers only small part of the town and only some 46 % of consumers are currently connected to the sewerage system. In order to provide proper sanitation services the first priority regarding sewerage system would be enlargement of the network to cover more water consumers.
rao1e 2005-01-17
Diameter, mm Cast iron 100 150 200 300 400 500(pressure pipeline) Ceramics
< 10 10-20 20-30 30-40 40-50 > 50 years, years, years, years, years, years, Total m m m m m m 157 138 140 380 522 170 260 58 1,592 160 2,891 670 9,895 7,480 850 334 1,963 612 456 2,033 2,281 2,342 756 3,941
% 3.3 3.7 3.8 1.2 6.5
17375 28.5
432
SWECO INTERNATIONAL
Diameter, mm 100 200 150 250 300 400 Steel 500(sub presiune) Reinforced concrete 400 500 600 800 1000 Asbestos 300 200 250 400 150 Total 380 % 0,6
< 10 10-20 20-30 years, years, years, m m m 350 412 1,330 398 1,545 1,806 1,110 130 275
30-40 years, m 85 1,600 934 194 1,077
40-50 years, m 180 1,924 155 448 148
> 50 years, Total m 615 73 5,339 492 3,524 3,558 1,389 3,019 498 498
% 1.0 8.8 5.8 5.8 5.0 0.8
2,683 187 615 557 988 267 1,327 3,014 1,900 501 160 344
2,683 187 824 2,930 3,014 1,900 1,276 1,135 431 600 190 162 544 7,394 3,560 60,895 12,2 5,8 100
4.4 0.3 1.3 4.8 5.0 3.0 2.1 1.9 0.7 1.4 0.9 100
165
330 385 87 120 480 192 4,148 22,465 22,933 6,8 36,9 37,7
280 590
In General, all mechanical equipment within existing sewerage pumping station are in a very poor condition. Most of the mechanical parts are worn out and old pumps, valves and pipelines are at the end of their operational lifetime. In addition to that there is no adequate monitoring for operation. Also, existing Wastewater Treatment Plant is at the end of its operational lifetime. Taken into consideration the condition of existing structures and machineries and insufficient process technology it could be recommended that the whole treatment plant will be replaced with new modern and more compact WWTP taken into account current and future wastewater flows and loads. For new WWTP there is a possibility to use area reservation next to the existing plant.
rao1e 2005-01-17
SWECO INTERNATIONAL
It shall be noted that within this study only visible conditional analysis were carried out and proper analysis of existing structures would be needed during next project phase.
14.5.4.3
The inlet pumping station to the WWTP operates permanently. Two pump of type NG-144-56 with capacities 144 m3/h each operate permanently. All other pumps operate in dependence of wastewater discharge. The wastewater volume received by WWTP in 2006 was 844,500 m3, including: - wastewater from private households, 482,000 m3; - wastewater from business technological repairs, 224,200 m3; and - public institutions, 138,300 m3. The treatment of wastewater is effectuated non-stop with current flow of 2,300 m3/day. The effluent quality in 2006 is presented in the Table 14.5.9.
Table 14.5.9: The effluent quality at Ungheni WWTP in 2006.
Parameter SS Dry residuals Chlorides Ammonia Phosphates
Inlet After concentration treatment 144.8 67.1 666.0 593.0 98.0 108.5 41.0 40.3 3.9 3.6
Requirement 5 1000 300 0.5
Thus the lack of proper treatment facilities the wastewater quality does not meet the requirements set by Moldovan authorities. Test result indicates that the used method for taking samples from the effluent wastewater is most probably insufficient and real reductions could be on lower level than reported. T he efficiency for pumping cannot be calculated because the available data presented by Ungheni Apa-Canal are not sufficient. However, the pumps are of 20-30 years old and work at a decreased efficiency rate.
rao1e 2005-01-17
SWECO INTERNATIONAL
Energy consumption for operation of auxiliary equipment, lighting and losses into the power transformers have been presented in the Table 14.5.10.
Table 14.5.10: Energy consumption of operation of Ungheni sewerage system, year 2006.
Facilities Main sewerage pumping stations WWTP
2004 359,000 68,000
kWh/year 2005 366,000 47,000
2006 374,000 56,000
Total energy consumption of water supply and sewerage system in 2006 was 5,100,000 kWh. 14.5.5 Prioritising of needed Investments for years 20092013
14.5.5.1 Preliminary Water and Wastewater Projections for 2013 In order to prepare preliminary water demand and wastewater projections the water and wastewater flows were analysed for the last three (3) years (20042006). Preliminary water demand and wastewater projections for the year 2013 are based on general assumptions as follows: - The connection rate to the water supply network is 80 %; - Per capita consumption in Ungheni in 2013 is 180 litres/capita/day; and - The connection rate to the sewerage system is 70 %. In addition to above mentioned, some assumption related to rehabilitation of the water supply network were made as follows: - Due repairing and maintenance work and installation of new pipelines for new housing areas the amount of leakages from the water supply network have estimated to decrease some 20 %; - Due installation of new in-house flow meters and due better accounting system amount of unaccounted water is estimated to decrease some 15 % (billed water demand per capita will increase); and
rao1e 2005-01-17
SWECO INTERNATIONAL
- Due better in-house flow measurement and possible
increase in water tariffs per capita consumption has estimated to decrease some 15 %. Preliminary water and wastewater flow projections for Ungheni are summarised below in Table 14.5.11.
Ungheni Population connected to the Water Supply network Population connected to the Sewerage network Water pumped to the Distribution Non-Revenue Water Average total flow to WWTP
14.5.5.2
Needed Investments
Investment need estimations are done for the period of years 20072013 in order to secure sufficient operation of water supply and sanitation systems and to provide water supply and wastewater treatment for more inhabitants in Ungheni. The new water sources and/or pipeline to connect city of Ungheni by new water pipeline to city of Balti have not been taken into consideration as short term investment needs. Short-term investments needed for water supply system are listed below, and serves as a basis for the proposed investment packages: - Rehabilitation of 18 km of network; - Continuing of installation of in-house water meters; - Construction of new network including water meters for new consumers for at least 10,000 inhabitants (> 35 km); - Complete renovation of all technological equipment at WTP; - Implementation of new chlorination plant; and In general, both sewerage network and WWTP require urgent rehabilitation and reconstruction works to enable reliable operation of the network and to fulfil the treatment requirements set by Moldovan
rao1e 2005-01-17
SWECO INTERNATIONAL
authorities. The investments needed for sewerage system are listed below, and serves as basis for the proposed investment packages: - Flushing of existing sewerage network; - Enlargement of the network to cover at least 9,000 new inhabitants; - Reorganising the existing septic tank emptying system including supply of proper vehicle for this purpose; - Renovation of WWTP inlet pumping stations; and - Construction of new WWTP for capacity of 3,500 m3/day (1st stage) with option for enlargement for total capacity of 4,500 m3/day (2nd stage).
14.5.5.3
Preliminary cost estimations for proposed investments packages within water supply and sanitation services are only preliminary estimations and will only be used as help in preparation of suitable investment packages in Feasibility Phase of the project. Proposed investment packages have been prepared so that there are two different packages; 1st investment package for works which shall be carried out in the very near future (within 1-2 years) and 2nd investment package for other works which must be implemented in order to secure the water and sanitation operations in long term: 1st Investment Package: 1.9 million USD in total Renovation of existing water treatment plant including automation of water intake and water treatment and new equipment for water laboratory, 0.9 million USD; and Flushing and renovation of sewerage network, 1.0 million USD
2nd Investment Package: 11.0 million USD in total Rehabilitation of 18 km of water supply network and construction of 25 km of new water supply network, 4.0 million USD; and Renovation and/or construction of 35 km of sewerage network and construction of new WWTP, 7.0 million USD.
rao1e 2005-01-17
SWECO INTERNATIONAL
15
Recommended Towns for Preparation of Feasibility Studies

In this chapter 10 towns are recommended for preparation of feasibility studies. The scoring prepared for the recommendation is based on the information and comments specified in the previous chapters. For the scoring and the following recommendation the institutional, socio-economic and financial aspects are used, as these show the ability to handle a coming investment project and repay a credit. The technical aspect analysed and discussed above will only be used as a bases for the continued work during the feasibility phase of the project. The Consultant has used a system of scoring and points for selection of the ten towns for continued participation in the project. The Consultant has judged the financial aspect to be the most important of the three aspects used. For this aspect the maximum number of points possible to obtain has been set to 40, whilst the maximum possible points for the other aspects has been set to 20 each.
15.1
15.1.1
Scoring of the towns

Institutional Aspect
15.1.1.1
Selection criteria Institutional aspects
Many institutional aspects are not easily quantifiable in figures. An attempt to summarize the comments presented for each town above is anyway presented here. The best towns from each of a number point of view are listed. A few points are judged more important for the quality of the institutional situation. These are the legal status and relation to the owner, the quality of management, computerization and experience from Mayor investment projects. If such a point is judged approved, this gives 2 as mark when estimating the result. Other approved points give 1 as mark. In a few cases a town is written within brackets resulting a half the grade. In case of low quality or missing information a town is not listed under a point. 1. General impression of the company, the management, the development during the last years and the commitment to further development: Bli, Cahul, Fleti, Floreti, Orhei, Rcani, Ungheni.
rao1e 2005-01-17
SWECO INTERNATIONAL
2. Legal status, relation between the owner and the operator, existing board or similar: Cahul, Floreti, Orhei. 3. Type of management, for instance efficient use of the capacity of all the personnel (through incentives or more characterized by management by objective than by directive), functioning management team, existence of internal information etc: (Bli), Cahul, (Clrai), (Cueni), (Fleti), Floreti, Leova, Orhei, Rcani, Ungheni. 4. Business plan or other document specifying activities for improvement of the utility: Bli, (Clrai), (Cueni), Drochia, Fleti, Floreti Leova, Orhei, Rcani, Ungheni. 5. Qualification of the personnel, availability of important personnel, level of salary enough high to attract important personnel: Bli, Cahul, Cueni, Drochia, (Floreti), Leova, Orhei, Rcani, (Ungheni) 6. Staff efficiency, e.g. number of staff per connection or customer (the utilities may have measured this in different ways, therefore low quality of information): Bli, Clrai, Cueni, Drochia, Fleti, Floreti Leova, Rcani, Singerei, Ungheni. 7. Computerization, at least 2 computers and personnel able to use them: Bli, Cahul, (Cueni), (Drochia), Fleti, Floreti, Orhei, Ungheni 8. Rate of meters (at least 90%): Clrai, Cueni, Floreti, 9. Way of billing (for instance bills, not notebook): Bli, Cahul, (Clrai), Cueni, Drochia, Fleti, Orhei. 10. Efficient payment procedures for the customers (payment possible not only at Apa-Canal but also at banks and post offices): Bli, Cahul, Cueni, Drochia, Fleti, Leova, Orhei, Teleneti, Ungheni. 11. Rate of collection, at least 90% of billed money: Bli, Cahul, Cueni, Drochia, Fleti, Floreti Leova, Orhei, Teleneti.
rao1e 2005-01-17
SWECO INTERNATIONAL
12. Experience from major investment projects: Bli, Clrai, Cueni, Drochia, (Fleti), Floreti, Orhei, Rcani, (Teleneti). 13. Relations to customers and other stakeholders: Bli, Cahul, (Clrai), Cueni, Drochia, Fleti, Floreti, Orhei, Rcani, Ungheni.
15.1.1.2
Recommended towns
The result of the above attempt to quantify the institutional quality in figures is presented in the two following tables. The first table presents the scoring criteria. In the second table the grades for each of the thirteen points above are presented followed by a column with the scores obtained by each town.
Table 15.1.1: Scoring criteria
Level of grades From 18 to 20 From 15 but lower than 17 From 12 but lower than 15 From 9 but lower than 12 From 6 but lower than 9 From 0 to 5
Points 20 16 12 8 4 0
Table 15.1.2: Scores obtained by the utility considering the institutional criteria
Town
Bli
Cahul
1 1 1
2 2
Clrai Cueni
Drochia
3 1 2 1 1 1 2 2 2 2
4 1 1 1 1 1 1 1
5 1 1 1 1 1 1 1
6 1 1 1 1 1 1 1 1 1 1
7 2 2 1 1 2 2 2
Fleti Floreti
Leova Orhei
1 1 1 1
2 2
Grades 8 9 1 1 1 1 1 1 1 1 1
10 1 1 1 1 1 1 1
11 1 1 1 1 1 1 1 1
12 2 2 2 2 1 2 2 2 1
13 1 1 1 1 1 1 1 1
Rcani
Singerei
Teleneti
rao1e 2005-01-17
Ungheni
1 1
13 12 6 11 10 11 14 7 15 9 1 3 9
Points 12 12 4 8 8 8 12 4 16 8 0 0 8
SWECO INTERNATIONAL
Orhei got the highest score followed by Bli Cahul and Floreti. 15.1.2 Socio-Economic Aspect
15.1.2.1
Selection criteria socio-economic aspects
Considering the purpose of the project and after a careful analysis of the socio-economic situation from each Raion and town, we consider that the most relevant criteria are the level of household revenues having a direct impact on the affordability to pay a higher tariff. The scoring mechanism, considering that the average household has 3 persons, is presented in the following table:
Table 15.1.3: Scoring criteria
Level of average household revenue Above 150 USD Between 135 and 150 USD Between 120 and 135 USD Between 110 and 120 USD Between 100 and 110 USD Below 100 USD
Points 20 16 12 8 4 0
15.1.2.2
Recommended towns
Considering the scoring mechanism presented above, the scores obtained by each operator (generically identified through the name of the town) are presented in the following table:
Table 15.1.4: Scores obtained by the operator considering the socio-economic criteria
Average household disposable income
Bli
Cahul
Clrai Cueni
Drochia
Fleti Floreti
Leova Nisporeni Orhei
rao1e 2005-01-17
2005 MDL 1,942.1 1,281.3 1,308.4 1,126.0 1,527.2 1,121.2 1,391.3 977.9 1,396.4 992.8
Points USD 154.1 101.7 103.8 89.4 121.2 89.0 110.4 77.6 110.8 78.8 20 4 4 0 12 0 8 0 8 0
Rcani
SWECO INTERNATIONAL
Average household disposable income Singerei
Teleneti
Ungheni
2005 MDL USD 1,036.9 82.3 934.2 74.1 1,321.4 104.9
Points 0 0 4
The only town that receives maximum of points is Bli which is a local authority having the statute of Municipality leading to a better split of fiscal revenues and economic development. Other towns receiving high scores are the following: Drochia: In the last years the development of the industrial sector recorded better results than the national average. Orhei: The town is close to Chisinau recoding an accelerated development in the last years. In the future might be included in the metropolitan area of Chiinu. Floreti: Recording a higher than average increase of the economy in the last years. 15.1.3 Financial Aspect
15.1.3.1
Selection criteria financial aspects
In order to have a clear selection mechanism of the cities that will receive financing, the Consultant identified the following criteria: Level of historical liabilities to suppliers, social fund, state and local budget. The ratio represents the weight of historical liabilities in total operating revenues. The scoring mechanism is presented in the following table:
Table 15.1.5: Scoring mechanism - level of historical liabilities
Level Below 10% Between 10% and 25% Between 25% and 50% Between 50% and 75% Between 75% and 100% Above 100%
Points 10 8 6 4 2 0
rao1e 2005-01-17
SWECO INTERNATIONAL
Tariff adjustments. The Consultant identified 2 sub-criteria: o The date of last tariff increase; o The frequencies of tariff increase; The scoring mechanism is presented in the following 2 tables:
Table 15.1.6: Scoring mechanism - last tariff date
Level Last tariff adjustment in 2007 Last tariff adjustment in 2006 Last tariff adjustment in 2005 Last tariff adjustment in 2004 Before 2004
Points 5 4 2 1 0
Table 15.1.7: Scoring mechanism - tariff frequency adjustments in the last 4 years
Level 4 tariff increases 3 tariff increases 2 tariff increases 1 tariff increase 0 tariff increases
Points 5 4 3 1 0
Level of operating ratio calculated as operating revenues divided by operating costs. The scoring mechanism is presented in the following table:
Table 15.1.8: Scoring mechanism Operating ratio
Level Above 1.3 Between 1.15 and 1.3 Between 1 and 1.15 Between 1 and 0.95 Between 0.95 and 0.9 Below 0.9
Points 10 8 6 4 2 0
Level of collection period calculated as account receivables divided by sales x 365 days. The scoring mechanism is presented in the following table:
rao1e 2005-01-17
SWECO INTERNATIONAL
Table 15.1.9: Scoring mechanism Collection period
Level Below 60 days Between 60 and 90 days Between 90 and 120 days Between 120 and 150 days Between 150 and 200 days Above 200 days
Points 10 8 6 4 2 0
According to the above mentioned criteria, the maximum score considering the financial aspects represents 40 points.
15.1.3.2
Recommended towns
Considering the scoring mechanism presented above, the scores obtained by each operator (generically identified through the name of the town) are presented in the following table:
Table 15.1.10: Scores obtained by the operator considering the financial criteria
Selection process
Financial criteria
Maximum points
Bli
Cahul
Clrai Cueni
Drochia Fleti Floreti Leova Orhei Rcani Singerei Teleneti Ungheni
Points 40 17 29 8 23 14 13 16 10 28 19 15 15 27
The operators with the highest scores (above 20) are Cahul, Orhei, Ungheni and Cueni.
rao1e 2005-01-17
SWECO INTERNATIONAL
The high scores from Cahul, Orhei and Ungheni are the result of a good financial management which recorded significant improvements in the last years correlated with a relatively large customer number. The high scores of Cueni are mainly the result of the low level of historical liabilities and low level of collection period mainly due to the fact that the operator was set up a few years ago without taking over any historical liabilities and short-term assets. Another significant town, even if it did not record a score above 20, is Bli (score of 17) which is a lager operator for Moldova with an important number of clients. However, considering some strategic decisions of the Government of Moldova (connection to the aqueduct Soroca-Bli) which had a negative impact on financial performances correlated with an average financial management lead to lower financial performances. The operators from the towns that recorded 15 points or below have some serious sustainability issues. For these towns, even if they will be included in the list of 10 towns, some serious measures has to be taken and the level of the loan has to be carefully assessed in order to assure sustainable development and WB loan repayments.
15.2
Conclusion and Recommendation

The total points obtained is presented in the following table.
Table 15.2.1 Total scores obtained
Selection process
Institutional criteria Points 20 12 12 4 8 8 8 12 4 16 8
Financial criteria Points 40 17 29 8 23 14 13 16 10 28 19
Socio economic criteria Points 20 20 4 4 0 12 0 8 0 8 0
Total
rao1e 2005-01-17
Maximum points Bli Cahul Clari Cueni Drochia Fleti Floreti Leova Orhei Rcani
Points 80 49 45 16 31 34 21 36 14 52 27
SWECO INTERNATIONAL
Institutional criteria Singerei Teleneti Ungheni 0 0 8
Financial criteria 15 15 27
Socio economic criteria 0 0 4
Total
15 15 39
The ten towns recommended for preparation of feasibility studies are in alphabetic order:
Bli, Cahul, Clari, Cueni, Drochia, Fleti, Floreti, Orhei, Rcani and Ungheni. 15.3 Summary of preliminary investment cost
Two investment packages have been prepared for each town; 1st investment package for works which shall be carried out in the very near future (within 1-2 years) and 2nd investment package for other works which must be implemented in order to secure the water and sanitation operations in long term. The preliminary cost estimations for these investment paccages for the ten towns selected for preparation of feasibility studies are presented in the following table:
Table 15.3.1: Preliminary investment costs for selected towns,Million USD
Town Bli Cahul Clari Cueni Drochia Fleti Floreti Orhei Rcani Ungheni Total
rao1e 2005-01-17
1st investment package 2.4 1.8 1.2 1.5 1.2 1.2 1.2 2.2 1.4 1.9 16.0
2nd investment package 16.0 9.0 8.0 10.5 13.0 8.5 8.5 8.0 9.0 11.0 101.5
SWECO INTERNATIONAL
Preliminary investment costs for the towns not selected for preparation of feasibility studies are presented in the following table:
Table 15.3.1: Preliminary investment costs for the not selected towns
Town Leova Singerei Teleneti
1st investment package 1.1 1.2 1.2
2nd investment package 8.5 8.0 9.0
Million USD
rao1e 2005-01-17
SWECO INTERNATIONAL
Appendix 1
Sources of information for the Institutional Aspect Balti Written information from Apa-Canal Persons interviewed: Victor Corcodel Cahul Written information from Apa-Canal Persons interviewed: Gheorghe Ghetivu, deputy Mayor Vasiliv Zagaevischi, director Apa-Canal Calarasi Written information from Apa-Canal Causeni Written information from Apa-Canal Persons interviewed: Anatolie Zaremba, Mayor Filip Cebanu, deputy Mayor Mihail Lazarov, director Apa-Canal Victor Doag, chief engineer Apa-Canal Veaceslav Digol, medical doctor Ion Burleau, ecology Drochia Written information from Apa-Canal Persons interviewed: Valeriu Boris Tinco, director Apa-Canal Falesti Written information from Apa-Canal Persons interviewed: The Mayor Sacara Liubomir, deputy Mayor Vasile Bagrin, director Apa-Canal Ion Rotaru, chief engineer ApaCanal Floresti Written information from Apa-Canal Sergiu Rusu, Mayor Iurie ap, general manager SA Servicii Comunale Floreti Leova Written information from Apa-Canal
rao1e 2005-01-17
Persons interviewed: Nicolai Gospodinov, deputy Mayor

SWECO INTERNATIONAL
Victor Antoniu, director Municipal Enterprise Division for Production of Communal Housing Management Orhei Written information from Apa-Canal Persons interviewed: Ion A. Sarban, Mayor Mihail Chiperi, director Apa-Canal Riskani Written information from Apa-Canal Persons interviewed: Oleg Turea, deputy Mayor Vasile Grecu, director Apa-Canal Singerei Written information from Apa-Canal Persons interviewed: Mihail Tabarcea, director Apa-Canal Telenesti Written information from Apa Canal Persons interviewed: Valentin Rotaru, Mayor and former Apa-Canal director Ungheni Written information from the Town Administration and Apa Canal Persons interviewed: Ilie Ciocanu, Mayor Victor Ceban, director ApaCanal
rao1e 2005-01-17

PreFS Report With Cover - FINAL - June 2007

Încărcat de

Informații document

Descriere originală:

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

PreFS Report With Cover - FINAL - June 2007

Încărcat de

Drepturi de autor:

Formate disponibile

Pilot Water and Sanitation Project, Moldova

FINAL REPORT Stockholm June 12

Water Supply and Sanitation Project Implementation Unit

FINAL Stockholm 12 June 2007 SWECO International AB Water and Environment

Project No. 1989 161 000

P:\ 1080\01 Uppdrag\1989161000 FS 15 Towns Moldova

45 45 46 47 47 47 48 48 49 51 51 52 59 60 60 60 62 68 71 75 75 76 76 76 76 76 78 78 78 78 79 79 80 83 83 83 91 92 92 93 94 98 101 105 105

Sources of information for the Institutional Aspect

Abbreviations and Acronyms

Figure 1.2.1 Map over Moldova

Consultants Time Schedule

May June July

Figure 1.3.1 Simplified time schedule for the project period.

Figure 2.1.1 Location of Bli

Municipal service dept. Balti ApaCanal Director

Techn inspectors dept 7.5 p

Figure 2.2.1 Organization of Regia Ap-Canal-Bli

Production & engineering 4 p

Energy service 17p

Constr. & repair dept 10 p

Civil protection engineer 1 p

2000 407.9 133.9 102.2

2003 890.8 128.8 115.4

2004 1103.1 123.8 110.1

2005 1318.7 119.5 106.8

2006 1695.4 128.6 114.1

Source: National Institute for Statistics

Source: National Bank of Moldova

Population Total Urban Rural Average number of population for 2006

(Thou.) 142.2 142.2 142.7

Estimation of Household Average Revenues

Table 2.3.4: Estimation of household revenues

Bli 2004 2005 1,103.1 1,318.7 1,302.7 1,501.4

Lei Lei Lei Lei

491.4 325.3 580.3 384.2

568.6 383.4 647.4 436.5

No. No. Lei Lei

3.0 1.8 1,740.9 691.5

3.0 1.8 1,942.1 785.7

Economic environment in Bli Municipality

Table 2.3.5: Volume of Industrial Production Evolution Bli Municipality

Volume of industrial production in 2006 Total out of which Bli

Current prices (mil. lei) 17533 1799.9

2004 Compared to previous year (%) 106.9 108.9

Current prices (mil. lei) 21123.5 2049.6

2005 Compared to previous year (%) 106.3 101.5

Current prices (mil. lei) 22243.2 2293.6

2006 Compared to previous year (%) 93.1 99.8

Source: National Institute for Statistics

Jan.-Sept. 2004 Total Bli

Jan.-Sept. 2005 Total Bli

Jan.-Sept. 2006 Total Bli

Source: National Institute for Statistics

Analysis of the operating activity

Source: Water Utility from Bli

The evolution of invoiced quantities is presented in the following table:

2004 Th. m3 3,533.7 2,117.0 1,416.7 3,250.6 1,867.6 1,383.0

2005 Th. m3 3,454.5 2,193.7 3,264.0 1,951.0 1,313.0

Source: Water Utility from Bli

P ersonnel (salaries and related taxes) D epreciation

Source: Water Utility from Bli

Source: Water Utility from Bli