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Final Report
TABLE OF CONTENTS
EXECUTIVE SUMMARY 6
1. INTRODUCTION 19
6. FINANCIAL PERFORMANCE 65
7.1 INTRODUCTION 74
7.2 PR 1 – ENVIRONMENTAL AND SOCIAL APPRAISAL AND MANAGEMENT 75
7.3 PR 2 – LABOUR AND WORKING CONDITIONS 77
7.4 PR 3 – POLLUTION PREVENTION AND ABATEMENT 78
7.5 PR 4 – COMMUNITY HEALTH, SAFETY AND SECURITY 79
7.6 PR 5 – LAND ACQUISITION, INVOLUNTARY RESETTLEMENT AND ECONOMIC
DISPLACEMENT 80
7.7 PR 6 – BIODIVERISTY CONSERVATION 82
7.8 PR 7 – INDIGENOUS PEOPLES 82
7.9 PR 8 – CULTURAL HERITAGE 82
7.10 PR 9 – FINANCIAL INTERMEDIARIES 82
7.11 PR10 – INFORMATION DISCLOSURE AND STAKEHOLDER ENGAGEMENT 82
EXECUTIVE SUMMARY
(1) Background
The water and wastewater utility company of Cazin ("Vodovod" or the "Company"), together with the Mu-
nicipality of Cazin ("Cazin" or the "Municipality"), have approached the European Bank for Reconstruction
and Development ("EBRD" or the "Bank") with a request for a loan in the amount ofup to EUR 4 million,
with sovereign guarantees as well as counter guarantees from the Federation of Bosnia and Herzegovina
and the Municipality, towards financing part of the costs related to development of a wastewater collection
and treatment system (the "Project").
Grant funds in the amount of EUR 700,000 have been approved by the Western Balkans Investment
Framework ("WBIF"). The funds will be used to finance two assignrnents. The funding for the first assign-
ment concerns the preparation of this feasibility study ("FS"), which is covered by the respective Terms of
Reference ("TOR").
The FS is necessary for the EBRD and the potential donors to determine the feasibility of the Project from
a technical, financial, environmental and social aspect and to confirm its eligibility for grant funding. The FS
will also identify possibilities and recommend a programme for financial and operational performance im-
provements in the Company (the "FOPIP"). It also produces legal framework for introduction of an arms
length arrangement between the Company and the Municipality in form of an adequate public service
agreement ("PSA").
The existing sewage system is of a combined type (the same sewer transports both the wastewater and
surface water) with a total length of approximately 8,000 meters. It is made of concrete pipes with a diame-
ter range between 200 mm and 600 mm. Occasionally, the capacity of the system is not sufficient to evac-
uate both wastewater and surface water at the same time.
The overall objective of the Project is to assist Cazin in its sustainable development of wastewater infra-
structure, which will, in addition, enable the Municipality to become compliant with EU directives pertinent
to urban wastewater and sludge treatment and contribute to Bosnia and Herzegovina meeting the EU envi-
ronmental acquis communautaire in the medium to long term.
Further, the Project will contribute to environmental protection, protection of water resources, minimize the
risks to public health and improve the quality of drinking water through the implementation of sewage and
wastewater treatment infrastructure in the Municipality. This will be achieved by: (i) increasing the number
of population connected to the sewage networks, and (ii) reducing the direct discharges of untreated
wastewater by the construction of a wastewater treatment plant (“WWTP”).
Option: Design and construction of sand filters at specific sources to protect Low 0.8
against turbidity.
The total investment of all proposed measures has to suffice the intended loan- and grant ar-
rangements and be affordable within the financial analysis that has been included in this report
The proposed measures should best pursue financial and operational sustainability of VODO-
VOD and its customers
The measures should be complementary among water supply and waste water management in
order to increase service performance and financial viability of VODOVOD
A lower number of different measures allows for easier “packaging” and potentially shortens
planning, tendering and approval processes. This is a vital factor for the timely implementation
within a rather challenging project schedule.
Based on the above criteria, the following list comprises the priority measures.
Land Cost for land acquisition and compensation in case the land 0.5
does not fully belong to the Municipality
Grants
EC 2'000 800 600 600
SIDA 2'000 600 800 600
ORIO 2'000 600 800 600
Shortage of financing 551 220 165 165
Total financing sources 10'353 3'741 3'506 3'106
In the course of the study preparation one of the donors withdrew his support from the project. We believe
that with the Feasibility Study already completed, the City and Vodovod will be in a better position to find
another grant for replacing this donor and covering the still missing funds of about € 0.55 million.
All assumptions and inputs to the financial models have been coordinated and accepted by Vodovod.
The financial model calculates the following full-cost recovery tariffs for water and wastewater:
WATER SUPPLY 2012 2013 2014 2015 2016 2017 2018 2019 2020
Water tariff (current terms) 1.09 1.30 1.30 1.28 1.29 1.29 1.32 1.35 1.38
Annual increase, % 18.89% 0.14% -1.57% 0.84% 0.10% 2.17% 2.19% 2.21%
Water tariff (constant terms) 1.09 1.27 1.24 1.19 1.17 1.13 1.12 1.11 1.11
Annual increase/decrease, % 15.99% -2.30% -3.97% -2.09% -2.81% -0.81% -0.79% -0.77%
WASTEWATER SUPPLY 2012 2013 2014 2015 2016 2017 2018 2019 2020
W/W tariff (current terms) 0.30 0.32 0.58 0.78 1.54 1.53 1.51 1.50 1.48
Annual increase, % 8.01% 79.18% 34.01% 98.30% -1.10% -1.04% -0.97% -0.89%
W/W tariff (constant terms) 0.30 0.32 0.55 0.72 1.39 1.34 1.28 1.23 1.19
Annual increase/decrease, % 5.38% 74.81% 30.74% 92.52% -3.98% -3.92% -3.85% -3.78%
It is assumed that cross subsidies between he consumer groups will be eliminated and both categories of
consumers will be charged with eh same tariff.
Water tariff will have to be raised by some 20% in order to reach the cost-recovery level but otherwise it is
not further affected by the investment program.
The implementation of the STIP with almost € 10 million invested in the wastewater sector alone will re-
quire practically a ‘new’ wastewater tariff, much higher than the current one. To avoid steep tariff increas-
es we have proposed the following staged or ‘managed’ increase of the wastewater tariff starting already in
2013:
As suggested by the Bank in July 2012 MTR presentation, we have considered tariff scenarios with ‘Pollu-
tion Charge’ – a fee to households that are not connected to the sewage. This approach is found by all
stakeholders fair, since these households pollute environment through poorly built septic tanks. The follow-
ing table summarizes the results of evaluating the affordability for each of the tariff scenarios:
Economic Analysis
The evaluation proves that the benefits of the proposed Short Term Investment Program from the view-
point of local economy and society are considerable and justify the planned investment. The EIRR of the
project over its technical lifetime is over 17.45% while the benefit-cost ratio is 1.8.
PR 3: In terms of drinking water sampling and testing, the Company is compliant with national and EU
legislation. However, current wastewater management does not meet those requirements. Project imple-
mentation will ensure compliance with EBRD requests and national and EU legislation on wastewater
management. The Company is monitoring the energy and natural resources consumption. However, there
is currently no management plan to improve to maintain or improve the energy efficiency of the on-going
water supply and wastewater treatment. All waste generated by the Company is collected and managed by
the local solid waste company PUC “Čistoća” - legitimate enterprise licensed by the relevant regulatory
agency. Generally, the Company produces a very small amount of hazardous waste. Sodium hypochlorite
and chlorine gas are used for water disinfection. Currently, the Company stores its sodium hypochlorite
tanks in front of the Company’s premises, in the open, which is not in line with the guidelines for sodium
hypochlorite storage. The Company adopted a General Act on Maintaining, Use and Monitoring of Water
Facilities and Response in Case of Breakdown or Accident which lists chlorine as a toxic material and em-
phasises dangers of chlorine explosion, however, this Act needs to be updated with written procedures on
safe chlorine management and emergency preparedness.
PR 4: At present, Rulebook on Occupational Safety and Rulebook on Fire Protection is used by the Com-
pany, as well as accident/incidents forms in case of accident. The Company does not analyse the causes
of occupational accidents; the accidents are only reported on Company protocol. During construction
works, there is a possibility of safety risk situations (trench hazard etc.), as well as temporary disruption of
local traffic and pedestrian movement, however, these situations can be mitigated by application of good
engineering and construction practices. It is expected that at the stage of the WWTP operation, there might
be odour impact on nearby population. This will be taken into account in the process of adopting the loca-
tion of WWTP and during the design phase. No emergency preparedness policies have been issued by the
Company concerning accident hazards and no emergency preparedness exercises have been conducted
with the local community representatives so far.
PR 5: The institution in charge for administering the expropriation, in behalf of the Company is the Munici-
pality of Cazin. The resettlement is not foreseen by the project. Temporary land acquisition and establish-
ing the right to access (the right of way, incomplete expropriation) within the trajectory of the sewage line
will be set in place during construction and later operation of the infrastructure. The Municipality has
adopted the decision on public interest for the land acquisition purpose. Permanent land acquisition will be
required at the location of the WWTP. However the resettlement is not envisaged and potential locations
do not hold any households. Negotiations regarding the settlements should not pose substantial difficulties.
Given the status of the land and its current use, no economic displacement is expected. Affected land plots
are mostly owned by private owners. One of the 17 plats is public property. Expropriation study is under
preparation. The Municipality is in charge for the expropriation and will carry out the consultations with
affected parties in accordance with local legal requirements. The Project will establish a grievance mecha-
nism (within SEP) that needs to be made available to all affected stakeholders.
PR 6: Project implementation will result in improvement of quality parameters of the wastewater dis-
charged into the natural water bodies. The project does not impact any protected site or biologically sensi-
tive area. No Natura 2000 sites are in the near proximity of the WWTP construction area.
PR 7: Not applicable.
PR 8: It is envisaged that the Project will have no impact on cultural heritage. However, if the contractors,
during the construction phase, unexpectedly encounter anything suggesting the possibility of finding ob-
jects and sites of cultural/archaeological significance, it is necessary to immediately suspend work and
inform relevant competent authorities.
PR 9: Not applicable.
PR 10: It is expected that the project will have mainly positive long-term impacts to the affected communi-
ties. The client has identified several stakeholders, including company users, employees, local NGOs and
vulnerable groups. A Stakeholder Engagement Plan (SEP) has been developed on the basis of the EBRD
requirements in order to define the type and scope of project-specific information that will be made availa-
ble to the public and to specify the proposed grievance mechanism.
Reduction of the water losses, energy efficiency improvements: The replacement of water supply
pipelines will reduce the loss of water in the water supply system and therefore raise the energy efficiency
(as pumping stations will not be as heavily burdened as they are now with old and leaky pipes often of
lower nominal pressure installed than required).
Additional environmental and social benefits arising from the project are:
Minimizing the risks of occurrence of water borne diseases in the Municipality of Cazin;
Aesthetics and ambient improvement of the entire area, especially along watercourses;
Creation of better environment for economic growth;
Increasing the standard of living in the Municipality of Cazin.
sions pertaining to its operation (biological treatment) are unavoidable, so it is necessary to undertake miti-
gation measures which ensure they have minimal impact on the surrounding area.
Noise: Noise is unavoidable during construction, but will be kept within limits set by national regulations.
During operation, noise will be generated by the WWTP but this is not considered significant as it will be
placed away from densely populated human settlements and will be mitigated to keep noise levels at a
minimum.
Solid waste: Some wastes are expected to occur during construction, mainly construction waste and sur-
plus soil. These will need to be disposed of accordingly or reused. Hazardous wastes associated with the
project may include a variety of materials such as oil contaminated material, solvents and similar. These
materials need to be segregated and stored separately, in appropriate containers placed under a roofed
and protected area and they should be re-used (and/or recycled) or handled and/or disposed of by li-
censed contractors. During operation of the WWTP, wastes are expected to be generated from preliminary
and mechanical treatment operations. These will have to be handled and disposed of by licensed opera-
tors. Sludge is to be managed according to Sludge Management Plan.
Cultural heritage: No impacts are envisaged, but recommendation for the introduction of a „Chance Find
Procedure“ is specified in the ESAP.
Impacts on people: Traffic disturbances may occur mainly due to the transport necessary construction
material and during the construction of linear objects (collectors and secondary network) which may re-
quire complete closure of specific streets for pedestrians and vehicles in urban areas. A decrease in traffic
safety may also occur during this period. These impacts can be mitigated by applying measures proposed
in Traffic Management Plan. Increased noise levels due to machinery operation are likely to occur, but they
are a normal part of construction and will be short – term. Dust arising from construction activities is also
unavoidable. However, aforesaid impacts will occur mainly during construction phase, which has a limited
duration, while the same are not expected in the course of the operational phase. During phase of WWTP
operation bad odour and an increased quantity of insects may occur if the WWTP is not operated accord-
ing to projected parameters or due to extremely high temperatures, but this impacts can be mitigated by
using good construction and operation practices.
Mitigation measures
Abovementioned short term negative impacts mainly associated with construction activities and impacts
associated with operation of the WWTP need the implementation of mitigation measures which, based on
the timeline of their execution, may be classified as:
Mitigation measures prior to the execution of construction works;
Mitigation measures during the execution of construction works and
Mitigation measures during the operational phase of the project.
Mitigation measures during the execution of construction works are usually related to a good working prac-
tice, which reduces negative influences on the water and land quality and noise level as well. Since the
implementation of such measures is direct responsibility of the Contractor, specific requirements for both
execution of works and implementation of mitigation measures ought to be included in the tender/contract
documentation. During construction works, mitigation measures include measures regarding materials
supply and transport, measures for the construction site and measures related to construction activities.
Most mitigation measures which should be implemented during the operation phase are related to the
proper functioning of the WWTP. These include monitoring and control of WWTP processes. Certain miti-
gation measures are related to the sewage collection system and its correct operation. Mitigation
measures which should be implemented during all Project lifecycle are proposed as a part of Environmen-
tal and Social Analysis.
The Client will establish and implement monitoring procedures to assess the project compliance with envi-
ronmental and social requirements. Framework Monitoring Plan is given as a part of Environmental and
Social Analysis; however, it can be updated in line with provisions set in the Application for Environmental
Permit for WWTP that needs to be developed during the environmental permitting process..Monthly pro-
gress reports should be prepared by the Contract Supervisor and sent to Municipality/Company HSE man-
agement for approval. In addition, the responsible HSE person should prepare periodic HSE progress re-
ports and a summary should be made publicly available.
1. INTRODUCTION
The project proposal suggested the funding of decentralized sewage system with fa-
cilities for wastewater treatment (WWTP) for the local community Stijena in the munic-
ipality of Cazin. The project proposal has been assessed as eligible for funding, pri-
marily in the field of design and construction of WWTP, while, according to their rec-
ommendation, Cazin municipality should finance the design and construction of sew-
erage system with supporting facilities. For this project Preliminary and Primary de-
sign for collection and wastewater treatment in LC Stijena have been developed.
The last population census was performed back in 1991.After the war a significant
migration happened from the territory of the Municipality of Cazin to the countries of
West Europe.
For the preparation of the projection of population growth on the area of the Munici-
pality of Cazin different sources are being used : For 2010, the Federal Institute for
Statistics (62.468 inhabitants) and the Municipal Administration (69,560 inhabitants)
have been used.
The natural population growth is significantly lower regarding the pre-war and its pro-
jections for the planning period. They vary from 0.5-06%.
Water supply
For the calculation of the storm water quantities the data from the Federal Hydro-
meteorological Institute have been used for the Municipality of Cazin,
For the calculation of the relevant discharge capacities, the rain intensity of 170
l/ha/day, with a return period of 2 years has been used. Duration was set at 15
minutes.
Different precipitation runoff coefficients were used in the reviewed documents.
1.3.3 Feasibility study for the rehabilitation of the water supply system Cazin (Una-Sana
Programme Office IBG Ltd Bihac, 2002).
The Feasibility Study for the reconstruction and rehabilitation of the water supply system in Cazin
has been prepared in the post-war period for the KfW Bank. The assessment was based on the
analysis of socio-demographic, socio-economic, institutional, technical, environmental and finan-
cial aspects. Also the general, legal, organizational and the financial status of the water supply
company have been assessed.
The main challenges were identified as the high percentage of non-revenue water (>66%), dete-
rioration of the drinking water quality, low efficiency of the operation of pumping stations, high
operation and maintenance cost, and organisational issues.
Unfortunately, the Municipality of Cazin did not accept the loan conditions offered by the KfW
Bank back then, and it decided to a new water supply subsystem Ljubijankici for which it received
a loan from the World Bank.
Instead of the reconstruction and rehabilitation of the existing water supply system the municipali-
ty decided for its extension to the north eastern part where the inhabitants did not have a regular
24-hour supply.
During the past few years, the original project concept proposed in the FS has been implemented
to a smaller extent and the percentage of non-revenue water decreased to approx. 52%.
c) Sanitary sewer of Cazin town – Innovation of the Final design (2000, Energoinvest-Higra Sa-
rajevo
An important change regarding the conceptual design dating back to 1983 is that the new lo-
cation for the central waste water treatment plant was closer (Slatinske bare - INCEL) to the
city by about 3.7 km. The total length of the main sewer according to this design was about
4.9 km
d) Conceptual design for collection and wastewater treatment in Municipality Cazin - Book I, II, III
and IV (2006, the Department of Water Resources Sarajevo)
This Conceptual design, developed at the level of a Master Plan, provides details for the con-
struction of a separate sewer system, a central sewage system and several (18) independent
decentralized systems with the planning period from 2005 to 2035. The length of the main
sewer of the central sewer system is approximately 16.5 km, with diameters of 300 to 800
mm. The project proposes the collection and waste water treatment for about 2/3 of the popu-
lation of Cazin Municipality.
The WWTP was proposed near the settlement Tržac, close to the state border and river Ko-
rana as the recipient. The design also includes the connection of secondary sewers from nine
suburban areas to the main sewer.
Other more remote villages of the municipality should, due to the terrain, have decentralized
collection and treatment systems. In total, 18 sub-projects for decentralized wastewater treat-
ment with the capacity from 100 to 5000 PE had been proposed. The construction of commu-
nal septic tanks (below 100 PE), for part of the population in rural areas were also considered.
e) Final design for the section I of the main sewer (2007), the Department of Water Resources
Sarajevo) and Final design for the section II of the main sewer (2008, the Department of Wa-
ter Resources Sarajevo);
Aforementioned Conceptual design (Master Plan) for waste water collection for the entire mu-
nicipality of Cazin formed the basis for the development of the final designs of I and II sections
of the main sewer. For the first phase of the project (section I) the route in the length of ap-
proximately 7.0 km was designed, mostly through the urban city area, from the central part of
town to the mouth of the Radetina river into Mutnica respectively. Designed pipeline diameters
are DN 300 to DN 600 mm. For the second phase of the project (section II) the route in the
length of approximately 9.5 km was designed, with the pipeline diameter of DN 600 to DN 800
mm.
Secondary sewers that are not included in the final design should be connected to the main
sewer. Secondary and tertiary systems within the City are not included in the conceptual de-
sign.
1.5.2 Decrees
Decree on Conditions for Discharge of Wastewater into Natural Recipients and Public Sewer
Systems (Official Gazette of FB&H ", No. 6/12)
Decree on Building Structures and Interventions Important for the Federation of Bosnia and
Herzegovina and on Building Structures, Actions and Interventions that May Largely Affect
Environment, Life and Health of People in the Federation of Bosnia and Herzegovina, for
which the urban development approval is issued by the Federal Ministry of Physical Plan-
ning ("Official Gazette of F B&H", No. 85/07 and 29/08)
Decree on Building Structures and Interventions Important for Una-Sana Canton and on
Build-ing Structures, Actions and Interventions that May Largely Affect Environment, Life
and Health of People, for which the urban development approval is issued by the Ministry of
Construction, Physical Planning and Environment of Una-Sana Canton ("Official Gazette of
F USC", No. 22/11)
EXECUTIVE SUMMARY
1. INTRODUCTION
6. FINANCIAL PERFORMANCE
Cazin is situated at 376 m above sea level, with moderate continental climate. The average an-
nual temperature is 9.5°C, with annual amplitude of temperature of 20.6°C. The relief is low and
hilly with watercourses valleys between the hills. The highest peak (797 m) in the area is Mala
Gomila. The territory of the Municipality Cazin covers 356 square kilometres.
The proximity of Cazin to major centres in the Republic of Croatia and some touristic destinations
such as the National Park "Plitvice Lakes", the rivers Korana and Una, and the thermal water
sources in Gata, offers favourable conditions for the economic development of the municipality.
Through the main road M-4.2 Cazin is well connected to the Cantonal centre Bihac and to other
cities in the FBiH and RS.
Cazin Municipality consists of 54 settlements organized in 23 local communities.
A Spatial Plan is in the preparatory phase and is being developed in line with the federal Spatial
Plan.
With regard to the water sector, the Spatial Plan foresees improvement of water sources protec-
tion and activities for identifying new potable water sources.
In 2010 Cazin Municipality elaborated a strategic plan for water and environment which provides
the main guidelines for improvement of these sectors. A significant number of projects included in
this plan have already been implemented with financial support from the Municipality and foreign
donors, local and international financing institutions.
In 1991 the population of Cazin was 63'406 which decreased substantially during the war and
has recovered to the level of 62'468 in 2009. The ethnic composition of the population is domi-
nated by the Bosnians group.
With a population density of 175 inhabitants per km² Cazin is among the densest populated mu-
nicipalities in the Federation of Bosnia and Herzegovina and BiH as well.
In recent years, the natural population growth is positive and constant with an average rate of
4.29 ‰ during the last four years. This rate is higher than the population growth rate in BiH. Tak-
ing into account this natural growth rate, not including a potential change in population due to mi-
gration, the total population in future could change significantly, and therefore there could be ad-
ditional pressure on existing infrastructure in the municipality (communal, school, health).
Some twenty years ago the urban population was less than 20% of the total, as the following fig-
ure illustrates:
Although currently there is no official data on the rural and urban population, the migration to the
towns is very strong and as a result we could assume that the share of the urban population has
grown.
The changes that occurred in the age structure of population are related to the decrease of
young people (under 14 years of age) in the total population and increase of people over 65
years.
The current population structure is characterized by a significant proportion of the working age
population (14-64 years).
Finally, the social developments in Cazin municipality are largely determined by the economic
migration abroad. Although it is recognized that the official statistics fails to propose exact figures
in this respect, the Cazin municipality estimates that there might be around 13'000 people work-
ing abroad. We have assumed that these people are included in the population count mentioned
above.
Table 2.1: Overview of employment by sectors – data for USC and Cazin Municipality for 2009
Sector Employed in USC Employed in Municipality per Location
per sectors sectors coefficient
1 2 3 4 5 6
Agriculture, hunting and 1.091 3,3% 89 1,6% 0,74
forestry
Fishing 55 0,2% 0 0,0% 0,00
Mining and quarrying 141 0,4% 35 0,6% 0,18
Processing industry 5.680 17,4% 1.042 19,2% 0,99
Energy, gas and water 880 2,7% 105 1,9% 0,62
production and supply
Construction 2.357 7,2% 605 11,1% 1,80
Retail and wholesale 6.588 20,2% 1.290 23,8% 1,31
trade and maintenance
Hotels and restaurants 1.902 5,8% 265 4,9% 1,16
Transportation, storage 1.663 5,1% 269 5,0% 0,73
and communications
Financial mediation 733 2,2% 81 1,5% 0,61
Realestate, renting and business 889 2,7% 112 2,1% 0,55
services
Public administration and defence 3.273 10,0% 373 6,9% 0,63
1 2 3 4 5 6
Education 3.950 12,1% 754 13,9% 1,61
Health and social service 2.354 7,2% 232 4,3% 0,63
Other social and service industry 1.027 3,2% 176 3,2% 0,83
Total number of employed 32.587 100,0% 5.428 100,0%
Cazin is a trading centre of the Una-Sana Canton, which could be attributed to its favourable ge-
ographical position. According to the Federal Bureau of Statistics the majority of employees are
in trade (23.8%), processing industry (19.2%) and education 13.9%. The employment level in the
construction sector in the municipality of Cazin is higher (11.1%) compared to the level of em-
ployment in the Canton (7.2%) and the Federation (6.2%). The same applies to the trade sector
where the level of employment in the municipality is 23.8% while on average it is 20.2% in the
Canton and 18.2% in the Federation (18.2%).
There is no available data on the salary by economic sector. The only available estimate is pro-
posed by the Cazin Municipality and it indicates an average salary of 668 KM in 2009 as com-
pared to 792 KM in Federation BiH.
There is no data at city’s level on the net revenue coming from people working abroad. The na-
tional statistics report just an annual lump sum which cannot be apportioned to Cazin. Therefore
we can assume that the income of households in which at least one person works abroad would
be considerably higher than the reported average salary. With 13’000 people working abroad and
over 16’000 households, it would be reasonable to assume that at least half of the households
have income which is not accounted for by the statistics and which is much higher than the in-
come of households depending on domestically generated salaries and wages. An indirect sup-
porting argument of this estimate could be the housing fund of the whole municipality in which re-
cently constructed or renovated two-storey houses constitute more than 90% of the total. This
comes to confirm the assumption that the undeclared households’ income is quite high but the
lack of any relevant data does not allow ascribing a monetary value to it.
The types and levels of pensions for the Federation, Canton and Cazin for 2009 are indicated be-
low:
Based on perennial observation of meteorological data, the mean annual temperature is 9, 5 °C.
Annual temperature amplitude is 20, 6 °C. The coldest months are January, with a mean temper-
ature of – 1, 4 °C, December (- 0, 8°C), and the warmest are July (19, 2 °C) and August (18,
7°C). The remaining summer months have temperatures below that average. As the terrain ele-
vation increases, the temperature is reduced by 0, 5 to 0, 6°C for every 100 meters. Snow is typi-
cal for January, when temperatures are lowest. Snow retention period for January is 7 days and
for December, February and March the corresponding period is 6 days. The remaining winter
months have temperatures slightly higher than the season’s average, which is approx. 0,2 °C.
2
Mean annual precipitation in this area is 1,213 mm/m . Lower parts of the Municipality have ap-
2 2
prox. 1,194 mm/m of rain, and higher planes of the area receive approx. 1,300 mm/m . Months
with the largest amounts of precipitation are April, May and June, and with the least amounts are
in December and January.
Potential evapotranspiration (PET), measured at the Bihać Meteorological Station amounts to
615 mm/year. In Cazin, evaporation is taken as 0,85 of the PET value in Bihać and for water sur-
face it is 1.25 of the PET value for Bihać MS.
In Cazin Municipality, the most frequent winds are northern winds (occurrence 19, 3 %) and the
rarest are south-eastern winds (occurrence rate 3, 6 %). Highest velocity winds are south and
south-eastern, with a speed of 2,2 m/s, and lowest velocity winds are northern and eastern (1, 6
m/s).
Figure 3.2: Occurrence (a) and mean velocity (b) of winds in Cazin
3.2 Geomorphology
The area of the considered region is characterized by mildly sloping terrain at Skokovi – G.
Koprivna – D. Koprivna and relatively flat terrain at Čoralići, D. Baraka and the wider area of Ca-
zin town.
The greatest absolute elevation is in the northern and eastern part of the terrain (515 m a.s.l.)
and the lowest is in Čajin Stream bed and its entry into Mutnica River (270 – 272 m a.s.l.).
Figure 3.3: Morphology of Cazin Municipality with inhabited settlements by size (Source: Digital
atlas of BiH)
This terrain belongs to the outer Dinarides and from morphological point of view is very charac-
teristic in different formations and processes. Generally, two morphological units can be differen-
tiated:
northern unit – characterized by hilly undulating land with striking ravines, pronounced karstifi-
cation process, karst formations in the areas of Žunići, Velagići and D. Koprivna,
southern unit – characterized by gently sloping terrain of the Miocene plateau where continu-
ous and intermittent streams have formed the present day relief. Areas near streams are
characterized by swamp formations due to slight inclines, meandering of flat coasts over-
grown with vegetation and erosion deposits.
Complex tectonic movements have basically shaped the present day relief. Main fracture struc-
tures of the Dinarides have been broken with numerous vertical faults that, in certain areas, the
Dinaride’s continuity is practically broken.
3.3 Geology
The geological build-up of the terrain is very complex. It consists of Mesozoic and Cenozoic sed-
iments in complex tectonic relationships which affects global hydrogeological relations on terrain.
The oldest formations in Mutnik, Vignjevići and Tahirovići are sediments of Middle Triassic with a
thickness of about 400 m. They occur as massive and stratified dolomites.
The Upper Triasic continually overlays the Middle Triasic. It contains approximately 92 – 96 %
dolomitic components, and is partially silicified with a strong laminar structure. These layers are
400 – 600 m thick.
Middle Miocene makes up the catchment area of Mutnik source with two distinct layers:
limestones and limestone marls with intercalations of tuff and coal,
Figure 3.4: Morphology of Cazin Municipality with inhabited settlements by size (Source: Digital
atlas of BiH)
3.4.2 Groundwater
The catchment areas of Mutnik, Vignjevići and Tahirovići, according to porosity, intensity and
depth of karstification, general permeability and mutual spatial orientation of its geological units
have the following hydrogeologic mediums:
high hydraulic and very high hydraulic-conductivity aquifer:
permeable aquifers with intergranular porosity,
Mutnik source is located south of Vignjevići on Brown earth on clay, with occurrence of alluvial-
diluvial Gleyic soils along the watercourse valley. Both of these soils are heavy mechanical soils
so there is no danger of vertical percolation of pollutants into groundwater. Still, consideration
should be given to surface erosion which can be very pronounced on slopes due to limited verti-
cal percolation into subsurface layers because of its clayey character.
Tahirovići source is located on Alluvial-diluvial Gleyic soil, while its immediate vicinity consists of
Brown Rendzina on tough lime stones. Due to its Gleyic characteristics, this soil has an imper-
meable or poorly permeable base. This makes vertical percolation limited to surface layers and
no percolation of pollutants is possible to groundwater, but only runoff to surface waters.
Karst sources in Jurassic sediments are low in yield (about 0, 02 – 2, 0 l/s). Čajin Stream source
is the only one with a higher yield (15 l/s). Sources in Miocene sediments are also of low yields
(0, 1 – 0, 8 l/s).
3.4.3 Flow of Mutnica River and Čajin Stream and their impact on Mutnik and Vignjevići
sources
In the catchment areas of Mutnik and Vignjevići, evacuation of surface waters is performed by
Mutnica watercourse and available surface hydrographic network of its tributaries. All surface wa-
ters migrate towards Korana River in Croatia. Impact of surface waters from Mutnica and its tribu-
taries is possible on Mutnik and Tahirovići sources, as they are located in the immediate vicinity
of the water source bed.
Water is drawn using vertically drilled wells from Mutnik source, at a depth of up to 300 m in karst
aquifer. When in stationary mode, there is no possibility of surface water contamination from
Mutnica River; however, during pumping, due to pressure loss and terrain configuration (lime-
stone sediments make up the surrounding area of Mutnica River) this possibility exists.
No systematic measurements have been undertaken on Mutnica River and Čajin Stream, so their
discharge rates have been calculated using approximate method, by analysing specific discharge
of Korana and Glina catchment areas. Discharge rates for these rivers are given in the table be-
low.
Geologic and hydrogeological relations and calculated discharge rates indicate that recharge of
these sources is mostly performed by vertical infiltration and seeping of rainwater in distinctly
karstic parts of the catchment areas, and most probably by redistribution of water in the karstic
cavernous system. This leads to a conclusion that the effect of surface water sources is not dom-
inant on yields of the sources in the area.
Data in 2010
Bacteriological quality Chemical quality
Negative samples Positive samples Negative samples Positive samples
180 64 211 33
Data in 2011
188 39 220 7
Source: PUC “Vodovod”
Major rainfall causes ammonia and faecal bacteria to occur periodically at water sources, and as
neither the Company nor any other authority monitors groundwater levels and its quality, no spe-
cific data exists on the impacts of waste water on the groundwater table of the area.
The table below gives a more detailed breakdown of water quality by water source (data for
2011):
Table 3.3: Water quality analysis of Cazin's watersources for 2011
SOURCES
PAJIĆA
VIGNJEVIĆI MUTNIK TAHIROVIĆI LJUBIJANKIĆI STOVRELA
STREAM
No. of
No. of No. of No. of No. of No. of
bacteri- No. of No. of No. of No. of No. of No. of
bacterio- bacterio- bacterio- bacterio- bacterio-
MONTH
Neg. results
Neg. results
Neg. results
Neg. results
Neg. results
Neg. results
Neg. results
Neg. results
Neg. results
Neg. results
Neg. results
Pos. results
Pos. results
Pos. results
Pos. results
Pos. results
Pos. results
Pos. results
Pos. results
Pos. results
Pos. results
Pos. results
Pos. results
1 I 4 - 4 - 3 1 4 - 4 - 4 - 1 3 4 - 1 1 2 - 2 - 2 -
2 II 2 1 3 - 4 - 4 - 3 1 3 1 4 - 4 - 2 - 2 - 2 - 2 -
3 III 4 1 5 - 4 - 4 - 4 - 4 - 3 1 3 1 2 - 2 - 2 - 2 -
4 IV 4 - 4 - 4 - 4 - 4 - 3 1 3 1 4 - 2 - 2 - 2 - 2 -
5 V 4 - 4 - 3 1 4 - 4 - 4 - 3 1 4 - 2 - 2 - 2 - 2 -
6 VI 4 - 4 - 3 1 4 - 1 3 3 1 1 3 3 1 2 - 2 - 1 1 2 -
7 VII 4 - 4 - 3 1 3 - 2 1 3 - 1 3 4 - 1 - 1 - 1 1 2 -
VII
8 I
4 - 4 - 3 1 4 - 4 1 5 - 3 1 3 1 1 - 1 - 1 1 2 -
9 IX 4 - 4 - 4 - 4 - 4 - 4 - 1 3 4 - 1 - 1 - 2 - 2 -
1
X 4 - 4 - 4 - 4 - 4 - 4 - 2 2 3 1 1 - 1 - 1 1 2 -
0
1
XI 4 - 4 - 4 - 4 - 4 - 4 - 3 1 4 - 1 - 1 - 2 - 2 -
1
1
XII 2 - 2 - 2 - 2 - 1 - 1 - - 2 2 - 1 - 1 - - 1 1 -
2
4
Tot 2 50 - 41 5 45 - 39 6 42 3 25 20 42 4 17 1 18 - 18 5 23 -
8
Source: PUC “Vodovod”
The Health Centre Cazin provided the basic data on the water borne diseases observed in Cazin
Municipality.
Year
Diseases 2012
2009 2010 2011 Total
5 months
Hepatitis - - - - -
virosa (A)
Enterocolitis 31 25 43 23 122
Dysenteria - - - - -
Salmoneloza 2 1 2 - 5
Source: Health Centre Cazin
A characteristics of water borne diseases is that they are transmitted via the fecal-oral route,
meaning that the causes of illness are excreted from infected hosts (as a source of infection) in
faeces and urine and enter the new host through orally or through the lining of the digestive tract.
These diseases have a pronounced seasonal character - they are more common in sum-
mer/autumn periods - and have a hygienic and epidemiological importance in areas where sew-
age system is not managed properly or where the supply of hygienic water is insufficient.
Some areas of the Municipality are not connected to the communal water supply system, but
have local sources which are not controlled by the Institute for Public Health. These sources are
not disinfected accordingly, and outbreaks of waterborne diseases have been noted in communi-
ties that are supplied by means of private sources (most likely shallow wells and surface waters).
One water source at Mutnik well field has been found unsuitable for drinking, with noted amounts
of bacteria as pumps are located at only 60 m depth. -This water source has been closed for a
longer period. The Company stated that insufficient funds prevent them from pumping water from
greater depths.
Another significant problem is the lack of any wastewater collection system for approximately
2,400 households. They have local septic tanks which are not constructed to meet EU or national
standards, often of faulty construction, and wastewater is either dumped at the nearest water-
course, or spread informally on the surrounding ground, where cattle is sent for grazing, thus in-
creasing the possibility for infections. There is no authorized company for maintenance of these
septic tanks, and the Company has no control over them, as they are considered private proper-
ty.
All industrial wastewater, which amounts up to 20% of overall wastewaters, including oils, lubri-
cants, paints, butchers’ shops wastewater, etc. is also discharged into nearest watercourses, and
no monitoring systems nor does information on quantities or types of water pollution exist.
Generally, the inhabitants show a low level of awareness regarding problems in waste water
management and treatment (Local Environmental Action Plan of Cazin Municipality, 2011).
It is expected that with the completion of the Ljubijankici water supply project in 2012 the number
of the residential consumers connected to the water supply system will reach 15’402 and the
number of legal entities – 887.
For all consumers that are connected to the sewage system, the volume of wastewater is consid-
ered equal to the water consumption.
The Company has an extensive and efficient consumer database which is updated on a daily ba-
sis. It contains detailed information on consumer characteristics, consumption history and bill-
ing/payment history.
Vodovod has a Billing and Collection Department with 12 employees out of which 10 are control-
lers (collectors. The latter visit the consumers, take the readings of the meters, deliver previous
month’s bills and collect payment. Each collector is designated to a specific number of users and
specific part of the service area. The work of the collectors is monitored on a daily basis, includ-
ing number of distributed bills, amount of collected income and percentage of income collected in
the area they cover. Collectors that have better achievement are rewarded with performance bo-
nus while the poor performance leads to corrective administrative measures.
The consumer bill is produced electronically and contains the following information:
Table 4.4: Sample of monthly water consumption for four-member family in households
in KM
No. Descrpition Amount Price Total
1. Water consumption per meter - (1 KM/m3) 20 1,00 20,00
2. Sewage - (0,30 KM/m3) 20 0,30 6,00
3. Meter base fee 3/4'' 1 2,00 2,00
4.* Water protection fee (0,04 KM/m3) 20 0,04 0,80
5.* Water usage fee (0,04 KM/m3) 20 0,01 0,20
Total VAT excluded 29,00
VAT basis 28,00
VAT 4,76
Total VAT included 33,76
*Note: VAT is not calculated to water fees for protection and usage of water.
When the collector receives payment on the spot, the second part of the bill, containing identical
information, is submitted to the Billing and Collection Department for recording the payment in the
data base. Beside direct payment to the collectors, residential consumers can pay either in the
main office or a second cash office in the town centre. Legal entities pay most often through the
banks.
Usually the bills are produced and delivered on a monthly basis. Exceptionally, in winter condi-
tions when temperatures are low, most of water-meters are not read because consumers protect
them fromdamage. In that case, billing is done on the basis of average monthly consumption and
adjustments with water-meter readings are done when spring comes. Safety aspect for collectors
during water-meter reading is very good.
The four major systems use underground water by means of wells, while two smaller subsystems
use water of karst springs. Sanitary protection zones have been defined for all these sources.
The total maximal yield of all sources for the water supply in Cazin amounts to 300 – 320 l/s. Po-
tential sources for further increase of the water quantity produced are Vrelo source with a capaci-
ty of about 50 l/s and Mlakulja source with 30 l/s. Both of them were tested in the past for exploi-
tation as drinking water. In addition, it is planned in the coming years to increase production of
the source at LJUBIJANKICI by 50 l/s.
The customers in the Municipality of Cazin have in general 24-hour access to piped drinking wa-
ter. However, there are certain problems related to low pressure in the systems of VIGNJEVICI
and MUTNIK at peak water demand during summer. A limited number of households (ca. 100)
has a reduction in supply in these periods.
Customers are in general content with the service of the Company. Complains are related to the
level of the tariffs.)
4.3.2 Facilities
Pumping stations
At Water Sources:
There are six major water production sites in the water supply system of Cazin, which are
equipped with bulk water meters. The following table presents the water produced in the years
2010 and 2011:
Table 4.5: Main water supply sources in Cazin Municipality
The characteristics of the pumping stations at these sources are described below:
1. “VIGNJEVICI”
The source consists of 4 wells with a maximum yield of 100 l/s. Pumps are installed at different
depths (18 - 81 m). The difference in elevation between the pumping station and the reservoir
“MIHALJEVAC” is 114 m. Specific energy consumption per m3 is high. The source has been ex-
ploited since 1979.
2. “MUTNIK”
The source consists of two wells with a maximum yield of 75 l/s. Pumps are installed at depths of
around 28m. The difference in elevation between the pumping station and the reservoir “STRA-
ZA” is around 72 m. Specific energy consumption per m3 is moderate. The source has been ex-
ploited since 1985.
3. “TAHIROVICI”
The source consists of three wells with a maximum yield of 40 l/s. Wells have depths of 70 –
180m. Specific energy consumption per m3 is high. The construction of the system of Tahirovici
continued in 2001 after the implementation of this project had been interrupted due to the war.
4. “LJUBIJANKIĆI”
The source consists of three wells with a maximum yield of 78 l/s. Wells have depths up to 340m.
Specific energy consumption per m3 in this system is very high. The source has been exploited
since 2011. The project was financed by the World Bank. There is potential to increase the ca-
pacity of the source by one additional well of 50 l/s. It has been planned to implement this project
including a filter station in the period 2012 to 2014.
5. “STOVRELA”
The source consists of two catchments which are supplied by a few small springs. The minimum
total yield is at around 10 l/s. The water is transported by gravity to the reservoir “SOSIN KA-
MEN”. The source has been exploited since 1887.
6. “PAJIĆA POTOK”
The source was put in service in 2011. The minimum total yield is at around 10 l/s. The water
from this source is used for the system of “TAHIROVICI”.
Reservoirs
3
There are in total 35 reservoirs with a total volume of 16’000 m for the storage of the water.
3 3
Their volumes vary from 25 m to 3’000 m . The reason for such a high number of reservoirs is
again the character of this rural region with many small settlements. The Company plans to install
video surveillance at the main reservoirs for better control.
Distribution Network
The network of the water supply system of Cazin has a total length of around 1’500 km, consider-
ing all pipelines of a diameter bigger than DN50. The pipelines are made of many different mate-
rials (cast iron, asbestos cement, PVC, PE, steel, galvanized iron and ductile cast iron). The old-
est parts of the water supply network originate from the Austro-Hungarian period. Cast iron and
asbestos cement pipes prevail in the main system, which were installed in the 70s and 80s.
Network management is hardly possible due to the lack valves on the pipelines. If valves are in-
stalled, they are often defective or inaccessible (e.g. road caps covered with asphalt).
The local supply schemes sometimes face pressure drops which are caused by hydraulic irregu-
larities. Due to the lack of pipe material and for own cost savings, smaller pipe diameters were
installed than was hydraulically required.
House Connections and Domestic Water Meters
The regulation of the Company requires that service lines shall be paid by the registered custom-
ers. The service lines are now made of HDPE. Before 1995, service lines were made of galva-
nized pipes, which are often damaged by internal and external corrosion. Domestic water meters
are installed at around 90% of the service lines to record consumption. There might be water me-
ters that are not in a reliable condition. VODOVOD will be liable to make sure that water meters
are held in a technically good condition and also be organising and financing for it within their
regular budget.
Table 4.6: Data on water quality samples in 2011 are summarized in the table below
VIGNJEVIĆI 48 2 50 --
MUTNIK 41 5 45 --
TAHIROVIĆI 39 6 42 3
LJUBIJANKIĆI 25 20 42 4
STOVRELA 17 1 18 --
PAJIĆA POTOK 18 5 23 --
The Company informed that the reason for the relatively high number of positive samples is that
some of the samples were taken before disinfection. In cases when samples did not meet the
standards, another water quality test had to be done, which did in each case fulfil the require-
ments.
It has been reported that 80 illegal landfills were registered in 2010, out of which 46 were re-
moved. Illegal landfills occur in locations without continuous waste collection service and along-
side the roads. 58% of households in municipality of Cazin have septic tanks, which are generally
in bad condition and leaking. Sludge is mainly spread over fields. This situation presents a per-
manent threat to the quality of the raw water taken from the sources for the drinking water supply.
Neither of the above mentioned water supply systems do have water treatment, except for disin-
fection, before the distribution via network. Disinfection is conducted by means of sodium hypo-
chlorite or chlorine gas. No sand filters are used against high turbidity, which sometimes occur in
periods of long-lasting rainfall events (especially at Tahirovici and Ljubijankici).
Protection zones were created and formally put into force for the major sources of the system. A
total of 12 zones with a surface of 4’850 ha and around 4’700 inhabitants were defined.
Water Losses
The rate for Non-Revenue Water amounts to 52% for the whole service area. The company has
estimated that about half of them account for technical and the other half for administrative loss-
es.
The table below indicates the main losses in 2010 expressed in Non-Revenue Water (%) per sys-
tem:
Water supply systems of VIGNJEVIĆI, MUTNIK and STOVRELA constructed in pre-war period
are the main cause of physical losses in the system.
The water supply systems of TAHIROVICI, PAJICA POTOK and LJUBIJANKICI were
constructed in the after-war period with the use of new generation materials (ductil cast iron,
PEHD, PVC).
The number of illegal connections is very high, in particular in the local supply schemes, which
were later connected to the main systems. The list below indicates the number of illegal connec-
tions that the Company’s task force has identified:
In 2009: 69
In 2010: 108
In 2011: 73
According to the Company, more time should be invested in the detection and identification of il-
legal connections. This has not been possible over the last three years, as the Company was
heavily involved in the implementation of the works for the completion of the system in LJUBI-
JANKICI.
The number of recorded breaks and leakages reported in the past two years are listed below:
In 2010: 1’806
In 2011: 1’936
Another problem is that there are areas in which pipes of lower nominal pressure are installed
than required (i.e. PN 6 bar). This is above all the case in local supply schemes, which were con-
nected to one of the principle systems after years of autonomous operation.
The need for pressure management in the framework of a master plan is evident to properly ad-
dress the problem of excessive pressure in parts of the network.
Electricity consumption
The electricity cost is estimated to be at around 20% of the total cost. The main cause lies in the
high number of pumping and booster stations which are needed for the transportation of the
drinking water.
The table below indicates different figures in context with the electricity consumption in the past 4
years:
Table 4.8:
The increase in electricity cost over the last four years is closely related to the completion of the
project in LJUBIJANKIĆI. The new booster pump stations which were put into operation also con-
tribute to the higher consumption. Generally speaking, improvements made in the field of water
supply in the municipality of Cazin have resulted in higher electricity consumption.
There are no emergency cases of blockages reported so far, but attention has to be paid on
leakages. However, complaints arising in respect of wastewater are not being registered
presently. The Municipality of Cazin covers a total number of 16,498 households.
The local existing settlements and communities are currently not being covered with sewer-
age networks. This reportenvisages the implementation of the following independent sewage
systems U2, K1, G3, and G4 as follows:
There are no existing sewerage networks in systems U2, K1, G3, G4 presently but the mas-
terplan proposes generally to build separate systems.
Cazin town
The existing sewerage network covers only a small district in the city centre of Cazin town.
The number of currently connected users amounts to 2,122 including households, economy,
industry, agriculture, etc. and the estimated equivalent inhabitants are 7,603 equal to 38% of
Cazin town.
The remaining 72% - 4,000 users estimated as 14,400 equivalent inhabitants are partially
connected to septic tanks discharged in closest local watercourses or open channels.
Sludge deriving from emptying the septic fosses are currently spread disposed of in agricultural
areas.
The remaining 42% have either soak away pits either directly discharging the wastewater into
nearby local watercourses and ditches.
Network Maintenance
The sewerage network developed as single branches covers only small part of the city. 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 is carried out.
In order to provide proper sanitation services the network should be enlarged to cover more wa-
ter consumers.
Domestic persons
Independent sewage U2 G4 K1 G3
system
Parameter Abbr. Specific Specific Specific Specific Unit
Unit Load- Unit Load- Unit Load- Loading
1 1 1
ing Fac- ing Factors ing Factors Factors in
1
tors in in in g/(capita·d)
g/(capita·d) g/(capita·d) g/(capita·d)
Wastewater lcd 100 100 80 80
Biological Oxygen BOD5 60 60 60 60
Demand
Chemical Oxygen COD 120 120 120 120
Demand
Total Suspended Sol- TSS 70 70 70 70
ids
Total Kjeldahl Nitrogen TKN 11 11 11 11
Total Phosphorus Ptot 2.5 2.5 2.5 2.5
Parameter Unit U2 G4 K1 G3
3
Wastewater Qw m /d 840 650 328 80
3
Drainage Water (20% of wastewater) Qd m /d 68 130 66 16
3
Dry Weather Flow m /d 1,008 780 394 96
Peak Flow h 14 14 12 10
3
m /h 67 52 30 9
l/s 19 14 8 2
Biological Oxygen Demand kgBOD5/d 504 390 246 60
There are no existing wastewater treatment plants on the territory of Cazin Municipality so far.
On the background of the large number of existing septic tanks being in generally bad condition
and being maintained by only one cistern truck the Consultant recommends additional mainte-
nance equipment.
Figure 5.1:Institutional organisation of the water supply and sewerage sector in FBiH
All infrastructure municipal assets in FBiH are owned by the municipalities (unlike Republika
Srpska where 50% of public utilities own them). The relationship between the municipality as an
asset owner and the public utility as an operator of the assets is based either on a Concession
Agreement (e.g. Zenica and Travnik) or on a Statute or Founding Act.
Financing of the water sector is provided in a different degree by the three administrative levels
as indicated by the diagram. However, after the war the main financial flows have been provided
by the international donors
The legal and regulatory framework of the water sector in BiH is schematically presented by the
following figure:
The entity and canton laws are targeted mainly to strategic issues of the development and opera-
tion of the water supply and sanitation sectors. In line with BiH intentions to join the EU, these
laws comply to a very high extent with the requirements of the European Union water legislation.
According to the Water Law “public water supply” means all activities related to water intake,
treatment, transport and distribution to users, if daily quantities are larger than 10 m3. It regulates
main issues regarding drinking water quality for public supply systems: water quality itself, protec-
tion of water sources and proper evidence and reporting on quantities used for public water sup-
ply. Main concern of entity law is prohibition of exhaustion of water resources and in that sense
public water supply systems are mentioned.
The Law on Principles of Local Self-Government, adopted in 2005, defines competences of self-
government local unit, that are among others, management, financing and improvement of the
operations and facilities of the local public infrastructures for water supply, wastewaters disposal
and treatment, etc.
The Law on Communal Services regulates methods of managing and operating public enterpris-
es. According to this law a public enterprises is “enterprise employing at least 50 employees” and
carry out activities of public interest, and in which municipality, city, canton or federation of BIH is
owner of at least 50% at least 50% plus one share.
It should be noted that on federal and canton level Bosnia and Herzegovina has reached a legal
framework that is a good base for future developments on approximations of national regulations
with EU legislation requirements.
The secondary legislation on municipal level deals mostly with operational issues of the water
supply companies. Some of the project-relevant documents will be discussed in different sections
of this report.
The management of the Company is provided by: Assembly, Supervisory board, Company man-
agement and Auditing Board.
The Assembly’s functions are listed in detail by the Company Statute. They concern mostly the
strategic development of the enterprise and include, among other, approval of three-year devel-
opment plan, distribution of profit, etc. The Assembly is summoned whenever necessary but at
least once a year.
The Supervisory Board (SB) is appointed by the Assembly, consists of five external members
and meets whenever necessary, in practice – on a monthly basis. The functions of this body are
quite numerous and include supervision of the operational and financial performance, appoint-
ment and supervision of management staff, supervision of regulation compliance, etc.
The functions of th eAudit Board, namely review of the annual financial statements of Vodovod,
are performed by an external auditing house.
The Company is managed by a Director appointed by the SB and is organised within 3 main divi-
sions: legal and general services, financial and technical, each one headed by a manager. This is
the standard set up of a commercially operating company which provides for minimum layers of
management with decisions taken at the most appropriate delegated level within the organisa-
tion.
At the moment of preparing this report, Vodovod is managed by an acting director since the
mandate of the previous director is over and a procedure for selecting a new one is underway.
The overall organisation of Vodovod with two bodies above the Director level seems to be a typi-
cal structure in BiH and we understand it is required by law. Due to the sensitivity of the topic,
during our interviews with Vodovod we could not draw univocal conclusions concerning the role
and efficiency of the Assembly and the Supervisory Board, especially regarding the direct inter-
ference of the latter in the operation of the Company.
It is required by law that Vodovod signs a service agreement with the municipality within a given
timeframe after the founding of the enterprise. We understand that the deadline for this has ex-
pired but so far such agreement does not exist. Therefore the ToR for this project demands that
the Consultant propose a draft agreement and when enforced it may transfer direct controlling
functions to the Municipal Council.
In view of this it could well be that in future the federal and cantonal legislators will consider sim-
plifying the relations between the municipality and its communal companies by revising the insti-
tutional structure of communal companies. For the purposes of this study, however, we will as-
sume that this organisational structure will remain and our further recommendations will concern
improvements only of the internal structure of Vodovod.
Each employee signs a contract with the Company which includes also his/her job description.
The salary structure and levels are recommended by the Utilities’ Association, a federal institution
in which Vodovod has a membership. The remuneration of the employees include net salary and
fringe benefits, e.g. for food, vacation and transportation to work as well as one-time payments
for special occasions. The total amount of these fringe benefits is around 25% of the net salary.
Vodovod does not have a specific training programme or plan. Requests for additional training
are identified and organised by each division manager. Usually the training is carried out by ex-
ternal experts for whom funds are budgeted on an annual basis.
5.3.4 Conclusion
The overall conclusion of this review is that Vodovod has a functional organisational internal
structure with well-designed and established budgeting and reporting practices. The computer
system allows timely and efficient information flows between the different departments and with
external stakeholders. The staff has adequate educational and practical qualifications but could
benefit in future from an improved training programme. The introduction of a Service Agreement
with the Municipality and the FOPIP will definitely contribute to further improvements in certain
areas such as accountability to the owner, increased financial and operational efficiency and
consumer relationship management.
6. FINANCIAL PERFORMANCE
0.50 0.10
0.05
0.00 0.00
2004 2005 2006 2007 2008 2009 2010 2011 2004 2005 2006 2007 2008 2009 2010 2011
During the last few years the electricity price has been rising steadily thus leading to negative op-
erational income in 2010 and losses in 2011. Last year the Director of the Company submitted
request for tariff increase to the Supervisory Board, which was suspended by the latter.
It is obvious that in the absence of an institution that serves as a qualified regulator the approval
and adjustment of water tariffs is seen more as a political affair rather than business necessity.
We understand that this situation is being recognised on federal level and therefore a new federal
law is under consideration. It is expected that it will lead to the establishment of a regulatory body
that will ultimately approve tariffs for water utilities and the municipal councils will only nominally
accept them. In case of non-acceptance the municipality will be required to subsidise the differ-
ence from its own budget. We have no further information on the status of progress of this new
law.
In addition to the tariff, water customers pay a monthly meter service fee which differs according
to meters and connecting pipes diameters. Thus the minimum meter fee is KM 1.25, the maxi-
mum KM 43.10. For projection purposes we will use an average value of 2KM per connection.
In 2008 two more water fees were introduced in accordance with the Federal Water Law – ‘Water
protection’ and ‘Water usage’ fees which are at the level of KM 0.04/m3 and KM 0.01/m3 respec-
tively. These fees are designed to protect national water resources and the revenue is divided
among the following institutions:
40% to the relevant Water Agency;
45% to the Canton; and
15% to the Environmental Protection Fund.
The services for water supply and wastewater for all customers are subject to 17% VAT (water
fess are excluded).
One-time connection fee is charged when a new consumer is connected to the network; the
amount depends on the pipe diameter and water demand: usually it is about KM 600KM and it
could go as high as KM 1’000 for commercial/industrial consumers.
6.2.2 Revenue
The P&l Statement reports separately revenue from main activities that include: (i) sales of water
and charges for waste water, (ii) revenue from meter reading/maintenance, (iii) revenue from new
connections and (iv) services provided to third parties. Although the Company documents sepa-
rately revenue from water supply and sewage, in the P&L Statement it indicates only combined
revenue. The current level of corporate profit tax is 10%.
The review of the P&L Statement reveals constant revenue from main activities during the last
three years with slight increase in 2011 due to the commissioning of the sections of the new Lju-
bijankici water supply system. The services provided to third parties consist of relatively small
scale construction works and these tend to decrease for lack of demand.
The operating loss in 2010 has been compensated by a write-off of accumulated water fees pay-
able to the federal budget which was made possible by changes in the corresponding law.
The collection rate of Vodovod is reported to have been at the level of 94% at least since 2008,
thus being the highest in the country.
Electricity costs are at the level of 17-19% of the total operating costs but nominally they have
increased from KM 614’536 in 2009 to KM 734’708 in 2011, i.e. by 20% over 3 years. The first
obvious reason is the cancellation of the seasonal electricity tariff scheme in 2011. Between 2007
and 2010 the Company benefited from a winter/summer tariff scheme where the summer tariff
was by some 30% lower than the winter tariff. Since 2011 a uniform tariff was introduced which is
very close to the level of the previous winter tariff thus contributing to altogether higher total elec-
tricity costs.
It should be noted, however, that the different types of electricity tariffs (by voltage, day/time and
seasonal) have been fairly stagnant during the last four years as the follow graph illustrates:
0.3
0.25
0.2
0.15
0.1
0.05
0
2007 2008 2009 2010 2011
This means that not really the tariff increase but rather electricity tariff restructuring has led to ris-
ing electricity costs for the company in 2011 (when the summer tariff was abolished).
It should immediately be stated that apart from unfavourable changes in electricity structure, the
total amount of consumed electricity has grown up as well (by 15% over the last 3 years). To a
certain extent this could be explained by the expansion of the water supply system with the Ljubi-
jankici section. On the other side, as the following table illustrates, the specific consumption of
electricity per cubic meter produced water has increased by 25% during the last 4 years. This in-
dicates falling technical operation efficiency and thus combined with the restructured electricity
tariffs will lead in future to significant increase in the share of electricity in the total operating
costs.
This short review leads to the conclusion that the substantial increase in the overall elec-
tricity costs of Vodovod might be driven more bythe increase of the total electricity con-
sumption and less by the electricity prices.
Recommendation: The issue regarding the electricity consumption needs further and detailed
analysis. The budget and time constraints of this assignment do not allow us to do it, but we will
recommend that Vodovod invests resources over the next 3-4 weeks into a detailed investigation
of the rising electricity consumption. This should include a thorough analysis of electricity con-
sumption by:
voltage level,
day and night,
and, most important, by water supply sources (branches or wells)
Such analysis should reveal the reasons for rising total and specific consumption per cubic me-
ter, i.e. determining the impact of electricity tariff changes and falling operational efficiency, and
thus will facilitate undertaking corrective measures. It will be appreciated if the results are com-
municated to the Consultant who will on his side propose appropriate actions under the Financial
and Operation Performance Improvement Plan in the Final Report.
Salary costs have the biggest share, around 40% of the total costs, which is quite typical for wa-
ter companies with similar size and service area. The social fund payments constitute about 33-
34% of the total personnel expenditures.
The share of ‘Materials’ shows a significant fall from 12% in 2009 to 5% in the next two years,
thus suggesting inadequate and poorer maintenance and repair of the system. This might be one
of the reasons for the lower efficiency as measured by the specific consumption of electricity.
While ‘Financing’ and ‘Other’ costs remain on a constant level there is a dramatic increase in the
item ‘Provisions for bad debt’. This issue is discussed in detail further in this section.
Considering the above findings about the main cost drivers’ behaviour, it is not surprising that the
net profit of the Company has been decreasing during the last three years and in 2011 it has reg-
istered a loss of KM 136’692. Since the Municipality does not finance or subsidize the operation
of Vodovod, the losses are covered by the Company’s own capital.
The law allows the Company to apply two methods for collection of bad debt:
Court decision
Disconnection of water supply
The Company uses quite often the first approach for both residential and legal customers. By law
Vodovod has to wait one year for the residential and three years for the legal entities before un-
dertaking this action. During the last few years the number of court proceedings has increased
from 95 in 2009 to 796 in 2011 covering an outstanding amount of over KM 440’000.
Based on the detailed information we received from Vodovod, it seems that the effort and related
costs are not worth the final results. The procedures take very long time, several years on aver-
age; the decisions of the court are not usually enforced; if at the end seizure of delinquent cus-
tomer property is to be executed, the latter reaches a deal with Company for re-scheduling the
debt, etc. There are cases when the court decides that the debt cannot objectively be paid by the
debtor and this gives grounds for Vodovod to proceed with write-off.
Vodovod reports that although the collection rate is high, some households still fail to pay their
bills within the stipulated 15-days period. After 3 or 4 months the Company sends one or more
warnings and if within a year the payment is still outstanding, it takes the case to court.
The Company seldom applies disconnection to both residential and legal consumers.
We understand that with the support of the municipality, some administrative measures have
been recently introduced. The Law on Communal Affairs requires that registration of new vehi-
cles is conditional upon a check for outstanding water bills. No information has been provided on
the success of this measure.
6.2.8 Loans
In 2003 The World Bank lent to the federal Ministry of Finance interest-free SDR loan of about
3.5 million for 20 years, out of which 10 years grace period. The Ministry of Finance further on-
lent this loan to Vodovod with 2% interest and only 8 years grace period. The proceeds of the
loan were used for construction of Ljubijankici water system, which is to be fully operational in
2012. In 2011 interest payments were about KM 70’000 but in addition Vodovod had to cover
negative exchange rate differences of about KM 177’700. The repayment of the principal will be
in equal annual instalments of KM 300’000 and will start in 2012.
We have deliberately opted not to adjust the above table for inflation considering the following: (i)
the water tariff has not changed since 2007; (ii) this will yield more conservative results because
if we inflate the rest of the expenditures the water bill share will be even lower.
Based on the consumption data provided in this report the monthly household bill is calculated
under the following assumptions:
Average household size – 3.8 persons
Average daily water consumption – 165 l/c/d (estimated by Vodovod)
Average monthly household water consumption – 18.8 m3
Monthly household bill for water, including connection fee and water fees – KM 21.75
Monthly household bill for water and sewage, including connection fee and water fees – KM
27.4
HOLINGER IC – UNA Consulting 72
Cazin Wastewater Project Final Report
Feasibility Study August 2012
The share of these bills in the total household expenditures of KM 1’541 would be:
Only for water supply 1.41%
For water and sanitation 1.78%
We can conclude that the water supply and sanitation expenditures at present are quite below
the internationally accepted threshold and thus do not give any grounds for concerns. In the next
stage of the project will continue with the analysis of the affordability in view of the future invest-
ment programme and its impact on the water/wastewater bills.
7.1 INTRODUCTION
The present Report objective is to assess Cazin Wastewater Project’s (CWWP) compliance with
the new EBRD Environmental and Social Policy published on May 2008 (EBRD, 2008).
The EBRD Environmental and Social Policy define specific Performance Requirements (PR) for
key areas of environmental and social issues and impacts. The following list indicates the scope
of the assessment:
PR 1: Environmental and Social Appraisal and Management. The client’s responsibilities in the
process of appraising, managing and monitoring environmental and social issues associated with
project were outlined; a Feasibility Study is underway with a focus on the priority investments,
and the compliance with National legislative requirements, EU requirements and the EBRD PRs
was assessed;
PR 2: Labour and Working Conditions. The company employee management was reviewed;
PR 4: Community Health, Safety and Security. The main social impacts associated to the project
and project compliance to this PR was verified;
PR 6: Biodiversity Conservation and Sustainable Natural Resource Management. Cazin area un-
der the project influence was evaluated against impacts to biodiversity;
PR 8: Cultural Heritage. The Cazin area under the project influence was evaluated against im-
pacts to cultural heritage; potential adverse impacts on cultural heritage were evaluated and rele-
vant PR compliance was verified;
In the following sections, the main findings of the due diligence are reported for each individual
PR.
Compliance with the EBRD PRs is provided in tables where the proposed activities are compared
against the requirements of each specific PR. Compliance has been defined through a coded as-
sessment, as follows:
NOT COMPLIANT (to be addressed in the ESAP with short timescales specified);
PARTIALLY COMPLIANT (to be addressed in the ESAP);
COMPLIANT
For each of the compliance findings, the tables also provide recommendations / comments as
guidance for achieving compliance.
Identified gaps will be addressed through the Environmental and Social Action Plan (ESAP),
which contains mitigation and performance improvement measures and actions that address the
identified social and environmental issues/gaps. The mitigation measures are actions designed to
ensure that the Project will operate in compliance with relevant local laws and regulations, as well
as EBRD’s Environmental and Social Policy (2008) in all relevant stages of the Project. The
ESAP focuses on avoidance of identified environmental and social impacts where possible, or on
the mitigation measures to minimize or reduce possible impact to acceptable levels.
A Stakeholder Engagement Plan (SEP) will be developed on the basis of the EBRD requirements
in order to define the type and scope of project-specific information that will be made available to
the public.
7.2.4 Training
The Company provides some training for employees. From time to time, the Company sends
some of the employees to workshops and trainings related to environmental protection issues,
organized by a third party. However, no specific training matrix has been developed by the Com-
pany either for general HSE issues (i.e. corporate level) or for the Project.
However, the Law does not require the contracting authority (the Company) to require from the
contractors any documents related to work or employment issues with the exception of proof that
the contractor has registered all its employees at the Pension and Disability Fund, as well as the
Health Insurance Fund, and that the contractor promptly pays all the social security contributions
for the employees. Monitoring of contractors is entrusted to a third party. Specific provisions to
address labour, OHS and grievance mechanism requirements shall be included in the Tender
documents and Contracts with contractors (addressed by ESAP).
7.4.3 Wastes
The Company generates small quantities of waste, mainly regular household refuse that accumu-
lates at the Company’s offices and recyclables – paper. All waste generated by the Company is
collected and managed, in accordance with the agreement between the Company and the local
solid waste company PUC “Čistoća” - legitimate enterprise licensed by the relevant regulatory
agency. Currently, there is no waste separation at source, however the Company plans to adopt
procedures concerning recycling. Minor quantities of waste generated from pipeline maintenance
(metal pipes) are sold as secondary raw materials.
During the consultation process with the client during the feasibility study preparation several lo-
cations had been considered for the WWTP location. The location on the left side of River Mut-
nica, next to the local road leading to the settlement Mutnik is selected as the WWTP location
due to the following conditions:
The location meets the needs in terms of size of land available;
The selected area is substantially isolated, two sides of the location are bounded with
trees, and one side and with the river Mutnica on the other;
The selected area is substantially neglected and unusable for agricultural purposes, cov-
ered with low vegetation (e.g. shrubs), and it is of general consideration that the land
owners will be interested to sell the land under favorable conditions
It covers substantially a lesser number of land plats (17) in comparison to other areas
and therefore it is expected that the land acquisition would be easier and with lesser im-
pacts.
2
The size of the available land for WWTP construction is 103 156 m .
Negotiations regarding the settlements should not pose substantial difficulties. Given the status
of the land and its current use, no economic displacement is expected. Affected land plots are
mostly owned by private owners. One of the 17 plats is public property.
Expropriation study is under preparation. According to the FBiH Law on Expropriation, the client
will have the right to expropriate the land that is of public interest under market value. Prior to the
expropriation process, the client will try to negotiate the voluntary sale-purchase agreements with
the landowners. In case of not reaching agreement, the land will be expropriated from the owner.
The landowner has a right under the FBiH Law to appeal on the Decision of the Expropriation.
The Municipality prefers to accelerate the expropriation process in order not to cause any delays
to the construction process. Therefore, it prefers to adjust the projects to the use of public land,
where possible, and negotiate the settlement to reach an agreement without involving the court.
In previous cases of land acquisition the Municipality managed to negotiate the agreements out-
side the court, with only few exemptions. If the Municipality was not able to agree on the com-
pensation with the landowners, the case was brought to court.
During the due diligence phase, no potential impacts on livelihoods or economic displacement is
identified within the project area. The initial point of the collector is placed narrowly in the city ar-
ea with present businesses, but is outside the project scope.
The key issues for PR 5 were as follows:
7.6.1 Consultation
The Municipality is in charge for the expropriation and will carry out the consultations with affect-
ed parties in accordance with local legal requirements. The FBiH Law on expropriation provides
the framework for informing/consulting the owner and stakeholders. In addition, the consultation
process for the project will be guided by the Stakeholder Engagement Plan (SEP).
vulnerable persons and on the individual assessment of Company's field workers in charge for
sales. The vulnerable status is mainly related to their incomes. Stakeholders and vulnerable
groups will be treated in SEP.
The activities on information disclosure and consultations with regards to the Project have been
carried out by the Municipality (through its website and stakeholder consultations). Given its in-
volvement in the Project, the Municipality, as well as the Client, is responsible to implement SEP.
The Project grievance mechanism is provided in the SEP.
Increase managerial, operational and technical capacities and increase safety of workers
Table 8.1: Development of population and connection rate in catchment area of WWTP1
The estimation of the lower catchment area is based on information from the report "Final design
for the section I of the main sewer (2007, the Department of Water Resources Sarajevo) and Fi-
nal design for the section II of the main sewer (2008, the Department of Water Resources Sara-
jevo) ". For the project period to 2035 a connected population and industrial figure of 17,000 PE
is assumed.
3. Assumption: 100% connection rate for commercial entities in the long term
No. Description
No. Description
No. Description
The long-term investment plan consists of measures, which will have sustainable impact on the
performance of the Company. It is important that proposed measures become an integrated part
of the Company’s strategy and that they are implemented conscientiously and duly by their staff
Since, river Mutnica is currently not defined as bathing waters, and therefore, no measures for
water disinfection are required, retrofitting of the facilities is, however, possible at any time (Chlo-
rination or UV).
The connection of the main sewer to the WWTP naturally occurs in the valley .Because of the
economic scale, a single sewage treatment plant at the end of the main sewer in the area near
the confluence of the river Mutnica in the river Korana would be logical.
Subsequently, the following main components were identified:
1. Sanitation of Cazin City including the Mutnik branch, including WWTP to be implemented in
two stages (WWTP 1a and 1b)
2. Further development of the sanitation system towards Korana river including WWTP 2 and the
connection of additional branches
Biological treatment activated sludge process, BOD5, COD, ammonium, total nitrogen,
attached growth processes phosphorus, biodegradable micropollu-
tants,
The primary objective of the mechanical treatment is to remove coarse solids and grit that might
disturb the proper functioning of the downstream processes.
A further component of the mechanical treatment is the primary sedimentation. The primary sed-
imentation typically eliminates about one third of BOD5 and COD (without chemical precipitation).
Since primary sludge is highly reactive and tends to produce strong odor emissions, primary sed-
imentation should only be considered if anaerobic digestion is foreseen.
The biological treatment is usually the most important part of a WWTP. It has the following task:
Reduction of the biological and chemical oxygen demand (BOD5 and COD) through the degrada-
tion of solid and dissolved organic material
Oxidation of ammonium to nitrate (nitrification)
Removal of total nitrogen (denitrification)
Degradation of organic chemical pollutants
Reduction of the concentration of microorganisms
The most widely used process for biological treatment is the so-called “activated-sludge process”.
In the most basic form, the activated-sludge process consists of an aeration tank and a second-
ary clarifier. In the aeration tank, bacteria are cultivated by providing oxygen. In the presence of
oxygen, bacteria can use the pollutants as food for the production of energy and cell mass. As a
result, the pollutants are converted into carbon dioxide, water and biomass. The cultivated bacte-
ria are present in the aeration tank in the form of sludge flocs.
To retain the bacteria in the activated-sludge process, the secondary clarifier separates the treat-
ed water from the sludge flocs. In the form of return activated-sludge (RAS), the bacteria are
brought back to the aeration tank. To avoid that the concentration of bacteria in the aeration
tanks exceeds the target value, a certain percentage of the sludge must be removed from the
process. This sludge is called waste activated-sludge (WAS).
Secondary Clarifier
Aeration Tank
Influent
Effluent
Return Activated-Sludge
Waste Activated-Sludge
The activated-sludge process can also remove nitrogen, if the aeration is stopped from time to
time or if an anoxic compartment is included. The discontinuation of aeration results in the for-
mation of anoxic conditions (nitrate is present, but no oxygen). Under anoxic conditions, bacteria
use nitrate instead of oxygen to degrade organic pollutants. This process results in the produc-
tion of molecular nitrogen that is released into the atmosphere.
Membrane Bio Reactor excellent effluent quality, high investment costs, low
(MBR) small footprint complex technology, high
energy consumption
Chemical treatment is typically applied to precipitate dissolved phosphorus. Chemicals used for
this purpose (coagulants) include iron chloride, iron sulphate, alum or polyaluminium chloride.
The coagulant can be dosed into the primary sedimentation or the aeration tanks of the biological
treatment.
Alternatively, phosphorus can be removed using biological processes. However, biological phos-
phorus removal processes are relatively sophisticated and need a very good process under-
standing. Furthermore, the required treatment target cannot be achieved by biological phospho-
rus removal alone. Therefore, biological phosphorus removal has not been considered in the
studied variants.
Because of the demands on the cleaning performance and the available space it is assumed that
for the following estimates for both wastewater treatment plants a Pre-anoxic Denitrification as a
biological process level will be used.
Description of possible processes for the sludge treatment
The activated-sludge process produces considerable amounts of sludge that must be treated and
disposed properly. Independent of the type of disposal, the sludge should be stabilized. Stabiliza-
tion means that little biodegradable material is left in the sludge. As a consequence, stabilized
sludge does not emit strong odours. There are different ways, how sewage sludge can be stabi-
lized. The most important processes are compared in the following Table.
aerobic digestion smaller tank volumes for energy intensive, re- low
biological treatment quires separate tanks,
more complicated
process than extended
aeration, risk of odor
emissions
chemical stabilization can be applied for agricul- only temporary stabili- low
with lime tural use zation, increased
sludge amount, un-
suitable for disposal in
landfill
Stabilization by extended aeration means that the activated sludge is kept relatively long in the
biological treatment so that very little biodegradable material is left when it is extracted from the
1
process as WAS. According to ATV , a biological treatment with nitrogen removal requires a min-
imum sludge age (SA) of 25 days to produce stabilized sludge.
For aerobic digestion, WAS is not stabilized in the biological treatment itself, but in separate aer-
ated tanks. Since this process is energy intensive and more complicated than extended aeration,
it is not considered as an option for Cazin.
The preferred stabilization for WAS with a shorter SA is anaerobic digestion. As anaerobic deg-
radation is generally much slower than aerobic degradation, the minimum temperature for anaer-
obic digestion is about 35°C (to speed up the biological reactions). The big advantage of anaero-
bic digestion is that it produces biogas (a mix between methane and carbon dioxide) that can be
1
ATV-DVWK-A 131 (2000): Sizing of single stage activated sludge plants.
burnt in a cogeneration plant or transformed to natural gas. The waste heat from cogeneration
can be used to heat the anaerobic digester.
Since chemical stabilization is often only temporary, requires a large amount of lime, significantly
increases the sludge amount and makes only sense for the ultimate use in agriculture, this option
was not included in the investigated options.
Composting is an interesting option, if the sludge is fully used in agriculture. As this is unlikely to
be the case for Cazin (see below), composting was not considered.
Constructed wetlands provide non-stabilized sludge over a period of up to 10 years to drain with
the help of reeds and also largely to mineralize (stabilizing).
Subsequently, the sludge can be used as a fertilizer in agriculture or disposed of in land-fills.
Sludge disposal
Sludge disposal is an important issue for every WWTP. Ideally, sludge disposal should be:
cost efficient
environmentally safe (no pollution of soils, groundwater, surface waters)
Fertilisation:
Due to its nutrient content, stabilized sludge can be used as fertiliser in agriculture. The sludge
can be applied in liquid (in the proximity of the plant), dewatered or dried form. In many EU coun-
tries, land application of sludge is an important disposal path, in particular for smaller WWTPs.
Potential problems associated with land application of sewage sludge include:
enrichment of heavy metals in agricultural soils
hygienic concerns with respect to the crops grown on the treated fields
potential for groundwater contamination (in particular in karstic areas)
If the maximum concentrations specified for metals in industrial wastewater discharged to the
public sewer system are enforced, the metal concentrations in the sludge produced by Cazin
WWTP should be in the normal range.
For the safe use of sewage sludge in agriculture, clear rules must be established, defining the
type of crop for which sewage sludge may be applied. Currently, the EU legislation does not re-
quire any type of sanitation/pathogen reduction for sewage sludge so that stabilized sludge can
in principal be used in agriculture without further treatment.
Since Cazin is in a karstic area, there is eventually little scope for the application of sludge.
Overall, it can be concluded that the potential of agricultural use for sludge will be limited in the
case of Cazin.
Disposal in Landfill:
The municipal waste of Cazin is disposed at Mezdre -Vlaski Dol Landfill Municipality of Bosan-
ska Krupa. This landfill is not sanitized and therefore not suitable for the disposal of sludge. Other
suitable landfill sites in the surrounding area are currently not available.
Incineration:
Incineration will reduce the sludge volume to a minimum and completely destroy its organic mat-
ter content. The most widespread options for sludge incineration include:
cement burning kiln
PIP: For WWTP 1a is in a first step constructed wetlands proposed. This method allows on one
hand to stabilize the sludge in a simple and low-investment way and reduce the volume. In addi-
tion this allows the sludge over the next 10 years to be buffered on-site. In parallel, this period of
time allows to develop appropriate disposal concepts on regional and national levels, that would
advise specify clear disposal routes in future.
LTIP: With the construction of WWTP 2, the implementation of WWTP 1b and the significantly
higher amount of sludge, the anaerobic digestion on-site of WWTP 1 for both systems seems to
be a realistic option. The sludge from the WWTP 2 would have to be thickened and transported
over a distance of about 8km to WWTP 1. That would allow for a system that can produce ther-
mal and electrical energy by biogas. Furthermore, it would allow for reducing and stabilizing the
amount of sludge significantly. The product from the digestion is suitable for all conventional dis-
posal methods (landfill, incineration, fertilizer for agriculture). After all, the existing constructed
wetlands can be re-used for other purposes.
To keep all options open for the disposal of the excess sludge, the Consultant proposes to re-
serve some space of the constructed wetlands for the later installation of a solar sludge drying
facility. If there will be an opportunity in the future to incinerate a portion of the produced sludge
in the region, the solar drying facility will allow for the required dry solids content in an efficient
and sustainable way. In the long-term, sludge incineration should be preferred over the disposal
in a landfill.
The Tables are split into different catchments in order to enable prioritisation and subsequent
formulation of the PIP.
Table 8.11: Investments for the downstream sewer
Table 8.14: Costs for independent communities for sewerage network and WWTPs
The WWTP will be implemented in the outskirts of Cazin City in 2 steps according to the
connection rate
The Mutnik branch (secondary system) will also be connected to it at the same time
Water supply in Mutnik will be at the same time be improved by rehabilitating parts of the
supply system (recurrent investments to achieve cost savings and gain more revenues)
Priority measures should also be taken to decrease illegal connections in this region with-
in a district management programme (DMP) and been extended to other notorious dis-
tricts
Water conditions is to be improved on a high priority level
These measures represent an integrated package referring not only to a least cost approach but
also to a unique and required mix of effective and technically efficient measures.
This approach is expressively underlined by the below shown calculation of specific costs per
connected inhabitant. It becomes very obvious that sanitising the City comes at the least cost
while connecting approximately 50% of the whole population of the Cazin Municipality (including
the Mutnik branch).
The downstream component (“Korana River” incl. side branches) are significantly higher in spe-
cific costs and it remains to be seen whether such expenditures would be feasible at all in the
long term.
Since so far, waste water management was missing by far and wide, the corresponding costs will
have to be partly financed by the water supply system. This will have to be achieved by cost sav-
ings in terms of reduction of non-revenue water and savings in the energy consumption.
Table 8.3: Specific, approximated costs for the main project components (refer to detailed cost
estimates above)
Tertiary network
City incl.main sewer
16,000,000 € 570 28,000
and WWTP 1a and
1b (incl. Mutnik)
LTIP (downstream
main sewer incl.
14,400,000 € 850 17,000
WWTP 2 but excl.
tertiary networks)
LTIP-U2, K1, G3, G4-
incl. Tertiary net- 23,640,000 € 1570 15,100
work and 4 WWTP
The above Table clearly shows the obvious. The more people equivalents are connected to a
specific length of sewerage, the cheaper is the cost for each connection. Therefore, connecting
the maximum households within the city area provides maximum sanitation effectiveness at least
cost.
It needs to be mentioned, that both, neither the LTIP “downstream” nor the decentralised
schemes include any cost for tertiary networks. It can safely be assumed that the specific cost
would actually be higher than stated in the Table, once the projects would be implemented. On
the other hand, for the City the whole Mutnik branch was included but adds only a fraction of the
City’s population. This specific value is thus proportionally lower.
The higher specific cost for WWTP 1b is due to the envisaged fermentation for all of the planned
WWTPs.
Option: Design and construction of sand filters at specific sources to protect Low 0.8
against turbidity.
TC FS 0.3 0.3
From the above funding scheme, it can be concluded that around 10 mio Euro would be
available for investments. Unofficially, it became known that EC has withdrawn their 2 mio
Euro grant.
However in this report, the Consultant took an iterative approach and tested the 10 mio Euro
(regardless of this so far unofficial information) against affordability criteria using EBRD’s fi-
nancial model and directives. Using relatively conservative assumptions, the proposed in-
vestment frame has been found affordable (5% threshold on house hold income and other
benchmarks).
According to the general approach and prioritisation criteria, the following measures are pro-
posed to be included in the PIP:
1. Tertiary Network within the City of Cazin
The tertiary network within the City was so far never included in any planning. Without
this network structure, the project could not be completed in time as people would have
to be forced to pay for their own connections over rather long distances. The tertiary
network will ensure that the most customers can be connected within the shortest pos-
sible time.
2. Main sewer line towards WWTP 1
This main sewer line will generally follow the riverbed of the Mutnica and allow in future
to connect further secondary sewer lines (side branches). This main sewer line ultimate-
ly leads into the inlet pumping station of WWTP 1.
3. 50% of the Mutnik secondary network (Mutnik branch 5a)
The LTIP states the cost for the whole Mutnik secondary sewer line which is approx. 9
to 10 km long. For the purpose of protecting the Mutnik well field, it is sufficient to build
the first 50% of the total length. With this measure, a major part of infiltrating waste wa-
ter can be eliminated from the area.
4. Replacement of broken (corroded) water mains out of the Mutnik well field
The Mutnik well field shows the highest rates for unaccounted for water within the whole
Municipality (ca. 60%). It was communicated by VODOVOD that heavily corroded water
mains play a strong role in this. Furthermore, it cannot be excluded that under low pres-
sure conditions also waste water infiltrates. The replacement of these mains is urgent
and cannot easily be afforded through the regular budget.
Land Cost for land acquisition and compensation in case the land 0.5
does not fully belong to the Municipality
9.5.1 Background
During the elaboration of the Feasibility Study, several locations for WWTP 1 were proposed
by the Municipality. The latest location was chosen because of the fact that most of the land
is owned by the Municipality. It is hoped, that by this fact the cost for land acquisition can be
reduced and potential conflicts with private owners be avoided. However, the land lays today
in an area that is regularly flooded. This would mean that investment costs for piling and
back-filling could become higher than anticipated.
In the wider area of the LC Pjanici on the location Rajak, the Municipality of Cazin selected
two potential locations for the construction of the central waste water treatment plant (WWTP
1a and 1b). The selected locations (Zone 1 and Zone 2) are placed immediately near the riv-
er Mutnica and the highway Cazin – Bihac (see the map in the appendix).
Upstream from the proposed locations, the basin of the River Mutnica is regulated while in its
proximity the River Mutnica meanders and floods the area south of the mentioned highway
(location in the Zone 2). Zone 1 is located in the flooding area. The basin of the River Mut-
nica in this area is mainly covered with dense vegetation. Due to the relatively low slope and
dense vegetation Mutnica is meandering typically and during the occurrence of high levels,
the water overflows pre-dominantly over the near agricultural lands.
The flooding patterns are more pronounced during the coincidence of high water levelsin
River Korana and River Mutnica. Flooding would then typically last for around 1-2 days. The
overflow of flood water over the fields happens often, which causes the soil to be “eternally”
wet (saturated by surface and ground water).
Flooding protection had been studied previously as well as hydraulics. Flow analysis and the
flooding areas have been defined for the high water occurrence of the rank 1/20, 1/100 and
1/500 years. The duration of floods greatly depends on the level of high water of the River
Korana to which flows the River Mutnica respectively the time coincidence of high waters in
both watercourses. Hydraulic calculations of the characteristic high waters have been made
through the program package DUFLOW.
and, backfilling in order to elevate the plant’s buildings above flood levels
Piling is likely to be required at all sites and has respectively been included in the projected
costs.
On the basis of the above, estimating the required revenue and the required tariff on
an annual basis
Development of the financial statements of the company using the defined and ad-
justed tariffs
Once the model is established we will proceed with the sensitivity analysis by varying key
assumptions. The results will be presented in the form of scenarios among which we will
designate the most realistic one as a Base Case. It has to be noted however, that the pro-
posed scenario will reflect the Consultant’s best knowledge and may not necessarily be tak-
en over by the decision makers. Since the water supply is responsibility of the local authori-
ties who ultimately decide and approve the water and sewage tariffs, the latter are often in-
fluenced by political and social factors which cannot be accommodated by the model except
through the affordability analysis. Therefore we will provide a range of scenarios among
which the city and Vodovod will ultimately select the one which serves best all stakeholders.
All inputs and assumptions are organised in two sheets and all changes to those should be
made only in these sheets. Since the tables are inter-linked the changes are considered in
all other sheets where the inputs/assumptions appear. The inputs inserted by hand are indi-
cated in blue colour.
WASTEWATER DISCHARGE, m3
Population 204'113 206'460 208'835 332'203 424'173 444'024 481'025
Legal entities 103'794 105'252 106'730 108'229 152'955 160'828 175'628
Total wastewater discharge 307'907 311'712 315'565 440'432 577'128 604'852 656'653
The own water consumption of Vodovod is assumed to remain at the level of 5’000m3 per
year.
5'000'000
4'500'000
4'000'000
3'500'000
3'000'000
2'500'000
2'000'000
1'500'000
1'000'000
500'000
0
2012 2013 2014 2015 2016 2020 2027
The interest on the WB loan from the Ljubijankici water supply branch is attributed to the wa-
ter supply costs.
The following table shows the basis for the water supply O&M projections:
Table 10.4: Water Supply Costs Inputs
Water Supply, in KM 2012
Salary, incl. Social fund 1'500'000
Electricity 750'000
Other costs 650'000
Depreciation 500'000
Financing costs 72'000
Total water supply 3'472'000
Wastewater
The O&M costs for wastewater include costs for the operation of the WWTP and the ex-
panded sewage network. They are estimated as per cent of the investment cost in the follow-
ing way:
0.5% of main sewer and tertiary network investment cost
0.5% of the investment costs of civil works for the WWTP
1.5% of the investment costs of the WWTP electromechanical equipment
Thus the total O&M costs for the canalisation network and the WWTP (after adding a small
reserve) amounts to 140’000KM per year.
We have assumed that the total new staff for the operation of the WWTP and the sewage
network will be 13 people with an average gross salary in 2012 of 1667KM. Salary costs are
inflated in the same way as described previously in this section.
The electricity cost is estimated on the basis of specific consumption of electricity per m3 of
treated wastewater, which is 0.43kWh/m3, and the total volume of wastewater. We apply the
same electricity average tariff of 0.16KM/kWh.
10.3.6 Depreciation
Depreciation costs are indicated separately for the existing and the new assets. The rates for
the new assets have been coordinated with Vodovod and correspond to the nationally ap-
proved rates.
The depreciation of the existing assets is considered as a total annual amount according to
Vodovod data and is attributed to the water supply tariff.
The depreciation of the new assets is calculated in the model and is attributed entirely to the
wastewater tariff.
10.3.7 Financing
The short-term investment programme will be financed through debt and grants as indicated
in the following table:
Grants
EC 2'000 800 600 600
SIDA 2'000 600 800 600
ORIO 2'000 600 800 600
Shortage of financing 551 220 165 165
Total financing sources 10'353 3'741 3'506 3'106
The information on the capital grants is according to the Terms of Reference. Currently there
is a shortage of financing in the amount of €550’000. This could be covered either by local
sources or through the tariff.
We understand that the Dutch Facility for Infrastructure Development (ORIO) has committed
to provide a grant over a 10 year period for covering part of the O&M costs of the WWTP
once it is commissioned.
The following table summarises the terms of the EBRD loan to the city which will be on-lent
to Vodovod:
Although the current rate of the 6-month Euribor is much lower, we have chosen its value as
of the start of 2012 which is in line with our conservative approach. In the sensitivity analysis
we will evaluate the impact of a lower base interest rate.
Water production based on demand and assumed decreasing water losses (Sheet
‘WatBal’)
Total operating costs (Sheet ‘O&M Costs’)
Depreciation of new assets (Sheet ‘Depr’)
Calculation of debt service (Sheet ‘ Debt’)
Estimation of the required revenue for each year and on its basis the required annu-
al tariff in current terms (i.e. accounting for inflation) (Sheet ‘Tariff’)
The required revenue is built up by including the following cost components:
Once we derive the required total revenue on an annual basis and by sector we divide it by
the projected amount of water sold, respectively wastewater collected, in order to receive the
required tariff for each year in current terms. Thus the model allows calculation of average
water and wastewater tariffs i.e. equal for all consumer categories. Using one tariff only
will contribute to eliminating the current cross-subsidies as a result of which the population
benefits from a lower tariff at the cost of the other consumer group.
If, however, this will not be acceptable for any of the stakeholders, it will be easy to design
different consumer categories’ tariffs following the approach currently used by Vodovod. In
this case it would be important to achieve the total required revenue as calculated by the
financial model.
Since the current water tariff has not been increased during the last 5 years, it does not
cover anymore the full operation and financing costs of Vodovod and the latter incurs losses.
To rectify this situation, we will suggest increasing the water tariff already in 2013 by
some 20%. After this increase the water tariff will grow slowly only due to inflation impact
while in constant terms it will slightly decrease due to improved operational efficiency.
The wastewater tariff, which at the moment is somewhat symbolic and is not related to
costs of canalisation services, will undergo considerable changes as indicated by the table
below:
Table 10.10: Water Supply Tariff Projections
WASTEWATER SUPPLY 2012 2013 2014 2015 2016 2017 2018 2019 2020
W/W tariff (current terms) 0.30 0.32 0.58 0.78 1.54 1.53 1.51 1.50 1.48
Annual increase, % 8.01% 79.18% 34.01% 98.30% -1.10% -1.04% -0.97% -0.89%
W/W tariff (constant terms) 0.30 0.32 0.55 0.72 1.39 1.34 1.28 1.23 1.19
Annual increase/decrease, % 5.38% 74.81% 30.74% 92.52% -3.98% -3.92% -3.85% -3.78%
For the purposes of the projections, we have assumed that parts of the sewage network will
be ‘operational’ before the end of the 3-year implementation period, although only from ac-
counting viewpoint. In real life the sewage network will be used only after its full completion
and the commissioning of the WWTP. Since we start already in 2014 depreciating those
parts of the network which are completed, the calculations indicate that in this year we have
to start increasing, or actually charging the ‘new’ wastewater tariff. The latter reaches its
highest level in 2016 when the servicing of the loan commences and gradually decreases
with the decreasing interest rate.
Since the annual increases during the implementation period are uneven and very steep, we
would propose somewhat more gradual schedule for the tariff adjustment, which could be for
example as follows:
The issue of raising the tariffs from the very start of the project has been discussed during
the kick-off meeting with EBRD in May 2012 in Sarajevo. The Bank has suggested that this
is included as ‘Condition Precedent’ in the Loan Agreement. We have followed this recom-
mendation in our financial model and believe that the proposed annual increases starting
from 2013 could be used in the Loan Agreement.
provisionally called ‘Pollution Charge’. The revenue from this Pollution Charge is subtracted
from the required revenue for wastewater and thus the wastewater tariff decreases.
We have developed several scenarios for the option Pollution Charge with varying its level
from 2 KM per month and per connection to 4 KM.
The following graph illustrates how the Base Case wastewater tariff changes as a result of
introducing different levels of Pollution Charge:
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2016 2017 2018 2019 2020
10.6 Affordability
In evaluating the affordability levels the Consultant encountered serious difficulties which did
not allow using the standard EBRD methodology. These difficulties relate solely to lack of of-
ficial as well as unofficial statistical data on population, household income and remittances
from abroad.
Alternatively we could use the household expenditures approach, for which there are some
available studies with adequate information; however EBRD has expressed certain reserva-
tions against this approach and therefore we have not followed it.
Under these circumstances we have opted for an unconventional methodology in which we
use the scant available information to the best possible extent and in a quite conservative
way.
The assessment of the affordability level is based on the following inputs:
We evaluate the affordability for 2016 when the wastewater tariff is on its highest
level both in current and constant terms
The only available data on income is from 2009 and it includes: (i) an average salary
in Cazin municipality of 668 KM per month and (ii) average pension of 311 KM per
month. The average salary in the period 2012-2016 has been inflated with the esca-
lation rate applied to the personnel costs in the financial model. For the past years
2009-2011 we have applied EBRD estimates for the salary growth in Bosnia. The
average pension has been escalated with the general domestic inflation rate.
As stated in the Mid-Term Report, we have calculated that there are on average
1.28 bread earners per household
By dividing the total water consumption for 2011 by the number of the total popula-
tion in Cazin municipality, as reported by the City administration, we calculate an av-
erage consumption of 84.4 l/c/d. This individual consumption has been increased for
the period 2012-2016 by the assumed growth of 1.15% from the demand projec-
tions.
Further we define two cases for which we will evaluate the affordability, both of which may
be viewed as extreme:
Case 1: a 4.5-person household which may have total income either from 1.28
bread-earners or just from one bread earner with average salary. The currently re-
ported average number of persons in a household is 3.7 with a downward trend. We
believe that by assuming 4.5 person per household, we are quite on the safe side.
The average monthly consumption of this household in 2016 would be 11.9m3.
Case 2: a family of 2 retired people which may have either two average pensions or
only one average pension. Their total household water consumption per month in
2016 would be 5.3 m3
For both cases we have considered that they may be connected to the sewage or
they may have only water consumption
The following table summarizes the inputs and assumptions described above:
Average salary increase 4.1% 6.6% 2.9% 3.6% 3.6% 3.6% 4.1%
General domestic inflation 2.1% 3.7% 2.8% 2.5% 2.5% 2.5% 3.0%
The total household bill for water and wastewater is calculated with the help of the following
tables (Note that total amount is different under each scenario and case):
The water tariff is equally sensitive to changes in the volumes sold as the wastewater. Pos-
sible increases in O&M costs affect it more though since these costs represent a higher por-
tion of the total costs as compared to wastewater where the financing cost and depreciation
are much higher.
We understand that by law Vodovod is not allowed to plan a profit. Therefore in our
projections net profit is zero. In real life of course profit or loss will occur and will be
treated according to the current legislation.
The Debt Service Coverage Ratio indicated below the Cash Flow table is on a satis-
factory level, sufficiently above the minimum threshold of 1.2 required by the Bank.
Revenue from sales - water 2'325'000 2'779'590 2'870'547 2'857'279 2'913'873 2'949'777 3'047'624 3'149'358 3'255'129
Residential 2'106'176 2'517'085 2'605'306 2'593'856 2'645'836 2'679'046 2'768'540 2'861'606 2'958'381
Other 218'824 262'505 265'241 263'423 268'038 270'731 279'084 287'752 296'748
Revenue from sales - wastewater 92'372 101'009 183'223 342'701 890'491 891'049 892'216 894'016 896'472
Residential 61'234 66'902 121'253 258'487 654'487 654'705 655'369 656'496 658'103
Other 31'138 34'106 61'970 84'213 236'004 236'344 236'847 237'520 238'368
Revenue from connection fee 396'168 397'025 397'883 398'744 399'607 400'472 401'338 402'207 403'078
Other revenue 200000 203'000 206'045 209'136 213'318 217'585 221'936 226'375 230'903
Revenue from grant 150'000 150'000 150'000 150'000 150'000 150'000 150'000 150'000 150'000
Total revenue 3'163'540 3'630'624 3'807'698 3'957'859 4'846'292 4'887'885 4'992'117 5'100'958 5'214'584
Operating cost water 2'900'000 2'963'615 3'064'475 3'061'159 3'128'799 3'175'834 3'284'899 3'397'940 3'515'110
Operating cost wastewater 0 0 0 0 492'510 509'188 526'476 544'395 562'972
Depreciation existing assets 500'000 500'000 500'000 500'000 500'000 500'000 500'000 500'000 500'000
Depreciation new assets 0 0 171'261 342'701 491'600 491'600 491'600 491'600 491'600
Interest charges on WB loans 72'000 66'000 60'000 54'000 48'000 42'000 36'000 30'000 24'000
Interest charges on EBRD loan 0 101'009 11'961 0 185'384 169'263 153'143 137'023 120'902
Total expenditures 3'472'000 3'630'624 3'807'698 3'957'859 4'846'292 4'887'885 4'992'117 5'100'958 5'214'584
Current assets
Accounts receivable 253'083 290'450 304'616 316'629 387'703 391'031 399'369 408'077 417'167
Cash & Bank 405'959 584'455 959'257 1'504'961 1'569'517 1'617'135 1'666'007 1'714'970 1'764'029
Other Current Assets 477957 477957 477957 477957 477957 477957 477957 477957 477957
Total Current Assets 1'136'999 1'352'861 1'741'830 2'299'547 2'435'177 2'486'123 2'543'333 2'601'004 2'659'153
TOTAL ASSETS 14'218'047 21'287'922 27'965'509 33'916'421 33'060'451 32'119'797 31'185'407 30'251'479 29'318'028
Liabilities
Current Liabilities (% of expenditures) 347'200 363'062 380'770 395'786 484'629 488'788 499'212 510'096 521'458
Other current liabilities 453'859 453'859 453'859 453'859 453'859 453'859 453'859 453'859 453'859
Existing long-term loan 3'300'000 3'000'000 2'700'000 2'400'000 2'100'000 1'800'000 1'500'000 1'200'000 900'000
EBRD loan 0 3'011'532 5'345'470 7'737'755 7'092'942 6'448'129 5'803'317 5'158'504 4'513'691
Equity
Owners equity contribution 4'820'191 4'820'191 4'820'191 4'820'191 4'820'191 4'820'191 4'820'191 4'820'191 4'820'191
Accumul.Profit -408'931 -408'931 -408'931 -408'931 -408'931 -408'931 -408'931 -408'931 -408'931
Grants 5'705'728 10'048'209 14'674'150 18'517'760 18'517'760 18'517'760 18'517'760 18'517'760 18'517'760
TOTAL LIABILITIES AND EQUITY 14'218'047 21'287'922 27'965'509 33'916'421 33'060'451 32'119'797 31'185'407 30'251'479 29'318'028
Check 0 0 0 0 0 0 0 0 0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Sources of Funds
Internal Sources
Net profit before interest 167'009 71'961 54'000 233'384 211'263 189'143 167'023 144'902 122'782 100'662
Depreciation 500'000 671'261 842'701 991'600 991'600 991'600 991'600 991'600 991'600 991'600
Total Internal Sources 667'009 743'223 896'701 1'224'983 1'202'863 1'180'743 1'158'622 1'136'502 1'114'382 1'092'261
External Sources
EBRD Loan 3'011'532 2'333'937 2'392'286 0 0 0 0 0 0 0
Donors 4'342'481 4'625'942 3'843'610
Total External Sources 7'354'013 6'959'879 6'235'895 0 0 0 0 0 0 0
Total Sources 8'021'022 7'703'102 7'132'596 1'224'983 1'202'863 1'180'743 1'158'622 1'136'502 1'114'382 1'092'261
Requirements of Funds
Capital Expenditure (Investment) 7'354'013 6'959'879 6'235'895 0 0 0 0 0 0 0
Debt service WB loan
Principal repayment 300'000 300'000 300'000 300'000 300'000 300'000 300'000 300'000 300'000 300'000
Interest payment 66'000 60'000 54'000 48'000 42'000 36'000 30'000 24'000 18'000 12'000
Debt service EBRD loan
Principal repayment 0 0 0 644'813 644'813 644'813 644'813 644'813 644'813 644'813
Interest payment 101'009 11'961 0 185'384 169'263 153'143 137'023 120'902 104'782 88'662
Total Requirements of Funds 7'821'022 7'331'840 6'589'895 1'178'197 1'156'076 1'133'956 1'111'836 1'089'715 1'067'595 1'045'475
Increase in Working Capital 200'000 371'261 542'701 46'787 46'787 46'787 46'787 46'787 46'787 46'787
Less: Increase in net current asset other than cash-21'504 3'541 3'003 17'769 832 2'085 2'177 2'273 2'372 2'475
Increase in Cash 178'496 374'803 545'704 64'555 47'619 48'871 48'964 49'059 49'159 49'262
Accumulated Cash (Cash&Bank account) 548'692 923'494 1'469'198 1'533'754 1'581'372 1'630'244 1'679'207 1'728'266 1'777'425 1'826'687
Accum. cash in % of annual revenue 15.1% 24.3% 37.1% 31.6% 32.4% 32.7% 32.9% 33.1% 33.3% 33.5%
Debt Service Coverage Ratio 1.42 1.43 1.43 1.48 1.48 1.49 1.49
Avoided capital and operating costs of construction of a new water treatment plant
which will have to be built if no measures in water treatment are undertaken
The economic evaluation is carried out for the technical life of the project, i.e. 25 years. De-
tails are provided in Sheet EIRR in the financial model. The following table illustrates these
results:
Benefits
O&M costs saving 1'646'193 0 0 83'456 118'900 175'419
Water losses savings 5'323'434 0 0 329'411 333'124 566'142
Health benefits (savings from avoided health expenditure) 12'536'509 0 0 0 1'466'873 1'466'873
Avoided investment cost of water treatment plant 5'538'455 3'084'519 3'084'519 0 0 0
Avoided O&M costs of water treatment plant 6'750'747 0 0 721'898 721'898 721'898
Total economic benefit 3'084'519 3'084'519 1'051'310 2'521'895 2'754'913
Net benefit -4'232'314 -3'772'187 -5'023'064 2'521'895 2'754'913
Benefit/Cost ratio 1.8
EIRR 25 years 17.45%
The evaluation proves that the benefits of the proposed Short Term Investment Program
from the viewpoint of local economy and society are considerable and justify the planned in-
vestment. The EIRR of the project over its technical lifetime is over 17.45% while the benefit-
cost ratio is 1.8. The Investment Program is therefore considered to satisfy financial and
economic analysis
Estimating the O&M costs, depreciation of new assets and debt service
On the basis of the above, estimating the required revenue and the required tariff on
an annual basis
Development of the financial statements of the company using the defined and ad-
justed tariffs
Once the model is established we will proceed with the sensitivity analysis by varying key
assumptions. The results will be presented in the form of scenarios among which we will
designate the most realistic one as a Base Case. It has to be noted however, that the pro-
posed scenario will reflect the Consultant’s best knowledge and may not necessarily be tak-
en over by the decision makers. Since the water supply is responsibility of the local authori-
ties who ultimately decide and approve the water and sewage tariffs, the latter are often in-
fluenced by political and social factors which cannot be accommodated by the model except
through the affordability analysis. Therefore we will provide a range of scenarios among
which the city and Vodovod will ultimately select the one which serves best all stakeholders.
The tariff model is developed for 15 years in nominal terms, i.e. accounting for inflation.
However, if the inflation assumptions are put to zero, the results will be expressed in real
(constant) terms, i.e. excluding the impact of inflation.
The following figure illustrates the structure of the tariff model:
All inputs and assumptions are organised in two sheets and all changes to those should be
made only in these sheets. Since the tables are inter-linked the changes are considered in
all other sheets where the inputs/assumptions appear. The inputs inserted by hand are indi-
cated in blue colour.
The projections of water consumption of the legal entities follow a similar approach. By as-
suming that the average consumption per legal entity will grow at the rate of 0.9% per year
and the number of legal entities connected to water supply will increase by 0.5%, we have
arrived at total water consumption close to the one projected by Vodovod.
Projections of wastewater collection
We assume that the growth of the average households’ wastewater collection will be the
same as for water consumption, i.e. 1.15% per year and connection. After the expansion of
the main sewer and the tertiary network we expect that some additional 1’600 households
will be connected to the canalisation system.
It should be noted that the model shows average wastewater collection slightly higher than
the average water consumption. While normally it is the other way round, in Cazin we have
somewhat untypical situation where only the centre of the city is connected to the sewage.
These households apparently tend to use more water than the average for the whole munic-
ipality and this explains the higher average per connection wastewater collection.
Currently only 56% of the legal entities are connected to the sewage. After the short-term
investment programme the number of connected legal entities will grow by maximum 200.
The annual growth for the average wastewater per connection is assumed to be the same as
for water supply: 0.5% growth of connection number and 0.9% annual growth of wastewater
discharge.
The following table summarizes the demand for water consumption and wastewater dis-
charge used in the financial model:
Table 10.2: Projections of Water Consumption and Wastewater Collection
WATER CONSUMPTION, m3 2012 2013 2014 2015 2016 2020 2027
Population 1'925'000 1'935'000 2'000'000 2'023'000 2'046'265 2'142'029 2'320'526
Vodovod's projections 1'935'000 2'000'000 2'025'000 2'050'000 2'150'000 2'300'000
Legal entities 200'000 201'800 203'616 205'449 207'298 214'862 228'769
Vodovod's projections 191'000 200'000 200'000 200'000 210'000 220'000
Total water consumption 2'125'000 2'136'800 2'203'616 2'228'449 2'253'562 2'356'891 2'549'296
Total Vodovod's projections 2'126'000 2'200'000 2'225'000 2'250'000 2'360'000 2'520'000
WASTEWATER DISCHARGE, m3
Population 204'113 206'460 208'835 332'203 424'173 444'024 481'025
Legal entities 103'794 105'252 106'730 108'229 152'955 160'828 175'628
Total wastewater discharge 307'907 311'712 315'565 440'432 577'128 604'852 656'653
The own water consumption of Vodovod is assumed to remain at the level of 5’000m3 per
year.
5'000'000
4'500'000
4'000'000
3'500'000
3'000'000
2'500'000
2'000'000
1'500'000
1'000'000
500'000
0
2012 2013 2014 2015 2016 2020 2027
The interest on the WB loan from the Ljubijankici water supply branch is attributed to the wa-
ter supply costs.
The following table shows the basis for the water supply O&M projections:
Table 10.4: Water Supply Costs Inputs
Water Supply, in KM 2012
Salary, incl. Social fund 1'500'000
Electricity 750'000
Other costs 650'000
Depreciation 500'000
Financing costs 72'000
Total water supply 3'472'000
Wastewater
The O&M costs for wastewater include costs for the operation of the WWTP and the ex-
panded sewage network. They are estimated as per cent of the investment cost in the follow-
ing way:
0.5% of main sewer and tertiary network investment cost
0.5% of the investment costs of civil works for the WWTP
1.5% of the investment costs of the WWTP electromechanical equipment
Thus the total O&M costs for the canalisation network and the WWTP (after adding a small
reserve) amounts to 140’000KM per year.
We have assumed that the total new staff for the operation of the WWTP and the sewage
network will be 13 people with an average gross salary in 2012 of 1667KM. Salary costs are
inflated in the same way as described previously in this section.
The electricity cost is estimated on the basis of specific consumption of electricity per m3 of
treated wastewater, which is 0.43kWh/m3, and the total volume of wastewater. We apply the
same electricity average tariff of 0.16KM/kWh.
10.12.6 Depreciation
Depreciation costs are indicated separately for the existing and the new assets. The rates for
the new assets have been coordinated with Vodovod and correspond to the nationally ap-
proved rates.
The depreciation of the existing assets is considered as a total annual amount according to
Vodovod data and is attributed to the water supply tariff.
The depreciation of the new assets is calculated in the model and is attributed entirely to the
wastewater tariff.
10.12.7 Financing
The short-term investment programme will be financed through debt and grants as indicated
in the following table:
Grants
EC 2'000 800 600 600
SIDA 2'000 600 800 600
ORIO 2'000 600 800 600
Shortage of financing 551 220 165 165
Total financing sources 10'353 3'741 3'506 3'106
The information on the capital grants is according to the Terms of Reference. Currently there
is a shortage of financing in the amount of €550’000. This could be covered either by local
sources or through the tariff.
We understand that the Dutch Facility for Infrastructure Development (ORIO) has committed
to provide a grant over a 10 year period for covering part of the O&M costs of the WWTP
once it is commissioned.
The following table summarises the terms of the EBRD loan to the city which will be on-lent
to Vodovod:
Although the current rate of the 6-month Euribor is much lower, we have chosen its value as
of the start of 2012 which is in line with our conservative approach. In the sensitivity analysis
we will evaluate the impact of a lower base interest rate.
Estimation of the required revenue for each year and on its basis the required annu-
al tariff in current terms (i.e. accounting for inflation) (Sheet ‘Tariff’)
The required revenue is built up by including the following cost components:
Once we derive the required total revenue on an annual basis and by sector we divide it by
the projected amount of water sold, respectively wastewater collected, in order to receive the
required tariff for each year in current terms. Thus the model allows calculation of average
water and wastewater tariffs i.e. equal for all consumer categories. Using one tariff only
will contribute to eliminating the current cross-subsidies as a result of which the population
benefits from a lower tariff at the cost of the other consumer group.
If, however, this will not be acceptable for any of the stakeholders, it will be easy to design
different consumer categories’ tariffs following the approach currently used by Vodovod. In
this case it would be important to achieve the total required revenue as calculated by the
financial model.
Since the current water tariff has not been increased during the last 5 years, it does not
cover anymore the full operation and financing costs of Vodovod and the latter incurs losses.
To rectify this situation, we will suggest increasing the water tariff already in 2013 by
some 20%. After this increase the water tariff will grow slowly only due to inflation impact
while in constant terms it will slightly decrease due to improved operational efficiency.
The wastewater tariff, which at the moment is somewhat symbolic and is not related to
costs of canalisation services, will undergo considerable changes as indicated by the table
below:
For the purposes of the projections, we have assumed that parts of the sewage network will
be ‘operational’ before the end of the 3-year implementation period, although only from ac-
counting viewpoint. In real life the sewage network will be used only after its full completion
and the commissioning of the WWTP. Since we start already in 2014 depreciating those
parts of the network which are completed, the calculations indicate that in this year we have
to start increasing, or actually charging the ‘new’ wastewater tariff. The latter reaches its
highest level in 2016 when the servicing of the loan commences and gradually decreases
with the decreasing interest rate.
Since the annual increases during the implementation period are uneven and very steep, we
would propose somewhat more gradual schedule for the tariff adjustment, which could be for
example as follows:
The issue of raising the tariffs from the very start of the project has been discussed during
the kick-off meeting with EBRD in May 2012 in Sarajevo. The Bank has suggested that this
is included as ‘Condition Precedent’ in the Loan Agreement. We have followed this recom-
mendation in our financial model and believe that the proposed annual increases starting
from 2013 could be used in the Loan Agreement.
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
2016 2017 2018 2019 2020
10.15 Affordability
In evaluating the affordability levels the Consultant encountered serious difficulties which did
not allow using the standard EBRD methodology. These difficulties relate solely to lack of of-
ficial as well as unofficial statistical data on population, household income and remittances
from abroad.
Alternatively we could use the household expenditures approach, for which there are some
available studies with adequate information; however EBRD has expressed certain reserva-
tions against this approach and therefore we have not followed it.
Under these circumstances we have opted for an unconventional methodology in which we
use the scant available information to the best possible extent and in a quite conservative
way.
The assessment of the affordability level is based on the following inputs:
We evaluate the affordability for 2016 when the wastewater tariff is on its highest
level both in current and constant terms
The only available data on income is from 2009 and it includes: (i) an average salary
in Cazin municipality of 668 KM per month and (ii) average pension of 311 KM per
month. The average salary in the period 2012-2016 has been inflated with the esca-
lation rate applied to the personnel costs in the financial model. For the past years
2009-2011 we have applied EBRD estimates for the salary growth in Bosnia. The
average pension has been escalated with the general domestic inflation rate.
As stated in the Mid-Term Report, we have calculated that there are on average
1.28 bread earners per household
By dividing the total water consumption for 2011 by the number of the total popula-
tion in Cazin municipality, as reported by the City administration, we calculate an av-
erage consumption of 84.4 l/c/d. This individual consumption has been increased for
the period 2012-2016 by the assumed growth of 1.15% from the demand projec-
tions.
Further we define two cases for which we will evaluate the affordability, both of which may
be viewed as extreme:
Case 1: a 4.5-person household which may have total income either from 1.28
bread-earners or just from one bread earner with average salary. The currently re-
ported average number of persons in a household is 3.7 with a downward trend. We
believe that by assuming 4.5 person per household, we are quite on the safe side.
3
The average monthly consumption of this household in 2016 would be 11.9m .
Case 2: a family of 2 retired people which may have either two average pensions or
only one average pension. Their total household water consumption per month in
3
2016 would be 5.3 m
For both cases we have considered that they may be connected to the sewage or
they may have only water consumption
The following table summarizes the inputs and assumptions described above:
Average salary increase 4.1% 6.6% 2.9% 3.6% 3.6% 3.6% 4.1%
General domestic inflation 2.1% 3.7% 2.8% 2.5% 2.5% 2.5% 3.0%
The total household bill for water and wastewater is calculated with the help of the following
tables (Note that total amount is different under each scenario and case):
The water tariff is equally sensitive to changes in the volumes sold as the wastewater. Pos-
sible increases in O&M costs affect it more though since these costs represent a higher por-
tion of the total costs as compared to wastewater where the financing cost and depreciation
are much higher.
Revenue from sales - water 2'325'000 2'779'590 2'870'547 2'857'279 2'913'873 2'949'777 3'047'624 3'149'358 3'255'129
Residential 2'106'176 2'517'085 2'605'306 2'593'856 2'645'836 2'679'046 2'768'540 2'861'606 2'958'381
Other 218'824 262'505 265'241 263'423 268'038 270'731 279'084 287'752 296'748
Revenue from sales - wastewater 92'372 101'009 183'223 342'701 890'491 891'049 892'216 894'016 896'472
Residential 61'234 66'902 121'253 258'487 654'487 654'705 655'369 656'496 658'103
Other 31'138 34'106 61'970 84'213 236'004 236'344 236'847 237'520 238'368
Revenue from connection fee 396'168 397'025 397'883 398'744 399'607 400'472 401'338 402'207 403'078
Other revenue 200000 203'000 206'045 209'136 213'318 217'585 221'936 226'375 230'903
Revenue from grant 150'000 150'000 150'000 150'000 150'000 150'000 150'000 150'000 150'000
Total revenue 3'163'540 3'630'624 3'807'698 3'957'859 4'846'292 4'887'885 4'992'117 5'100'958 5'214'584
Operating cost water 2'900'000 2'963'615 3'064'475 3'061'159 3'128'799 3'175'834 3'284'899 3'397'940 3'515'110
Operating cost wastewater 0 0 0 0 492'510 509'188 526'476 544'395 562'972
Depreciation existing assets 500'000 500'000 500'000 500'000 500'000 500'000 500'000 500'000 500'000
Depreciation new assets 0 0 171'261 342'701 491'600 491'600 491'600 491'600 491'600
Interest charges on WB loans 72'000 66'000 60'000 54'000 48'000 42'000 36'000 30'000 24'000
Interest charges on EBRD loan 0 101'009 11'961 0 185'384 169'263 153'143 137'023 120'902
Total expenditures 3'472'000 3'630'624 3'807'698 3'957'859 4'846'292 4'887'885 4'992'117 5'100'958 5'214'584
Current assets
Accounts receivable 253'083 290'450 304'616 316'629 387'703 391'031 399'369 408'077 417'167
Cash & Bank 405'959 584'455 959'257 1'504'961 1'569'517 1'617'135 1'666'007 1'714'970 1'764'029
Other Current Assets 477957 477957 477957 477957 477957 477957 477957 477957 477957
Total Current Assets 1'136'999 1'352'861 1'741'830 2'299'547 2'435'177 2'486'123 2'543'333 2'601'004 2'659'153
TOTAL ASSETS 14'218'047 21'287'922 27'965'509 33'916'421 33'060'451 32'119'797 31'185'407 30'251'479 29'318'028
Liabilities
Current Liabilities (% of expenditures) 347'200 363'062 380'770 395'786 484'629 488'788 499'212 510'096 521'458
Other current liabilities 453'859 453'859 453'859 453'859 453'859 453'859 453'859 453'859 453'859
Existing long-term loan 3'300'000 3'000'000 2'700'000 2'400'000 2'100'000 1'800'000 1'500'000 1'200'000 900'000
EBRD loan 0 3'011'532 5'345'470 7'737'755 7'092'942 6'448'129 5'803'317 5'158'504 4'513'691
Equity
Owners equity contribution 4'820'191 4'820'191 4'820'191 4'820'191 4'820'191 4'820'191 4'820'191 4'820'191 4'820'191
Accumul.Profit -408'931 -408'931 -408'931 -408'931 -408'931 -408'931 -408'931 -408'931 -408'931
Grants 5'705'728 10'048'209 14'674'150 18'517'760 18'517'760 18'517'760 18'517'760 18'517'760 18'517'760
TOTAL LIABILITIES AND EQUITY 14'218'047 21'287'922 27'965'509 33'916'421 33'060'451 32'119'797 31'185'407 30'251'479 29'318'028
Check 0 0 0 0 0 0 0 0 0
External Sources
EBRD Loan 3'011'532 2'333'937 2'392'286 0 0 0 0 0 0 0
Donors 4'342'481 4'625'942 3'843'610
Total External Sources 7'354'013 6'959'879 6'235'895 0 0 0 0 0 0 0
Total Sources 8'021'022 7'703'102 7'132'596 1'224'983 1'202'863 1'180'743 1'158'622 1'136'502 1'114'382 1'092'261
Requirements of Funds
Capital Expenditure (Investment) 7'354'013 6'959'879 6'235'895 0 0 0 0 0 0 0
Debt service WB loan
Principal repayment 300'000 300'000 300'000 300'000 300'000 300'000 300'000 300'000 300'000 300'000
Interest payment 66'000 60'000 54'000 48'000 42'000 36'000 30'000 24'000 18'000 12'000
Debt service EBRD loan
Principal repayment 0 0 0 644'813 644'813 644'813 644'813 644'813 644'813 644'813
Interest payment 101'009 11'961 0 185'384 169'263 153'143 137'023 120'902 104'782 88'662
Total Requirements of Funds 7'821'022 7'331'840 6'589'895 1'178'197 1'156'076 1'133'956 1'111'836 1'089'715 1'067'595 1'045'475
Increase in Working Capital 200'000 371'261 542'701 46'787 46'787 46'787 46'787 46'787 46'787 46'787
Less: Increase in net current asset other than cash-21'504 3'541 3'003 17'769 832 2'085 2'177 2'273 2'372 2'475
Increase in Cash 178'496 374'803 545'704 64'555 47'619 48'871 48'964 49'059 49'159 49'262
Accumulated Cash (Cash&Bank account) 548'692 923'494 1'469'198 1'533'754 1'581'372 1'630'244 1'679'207 1'728'266 1'777'425 1'826'687
Accum. cash in % of annual revenue 15.1% 24.3% 37.1% 31.6% 32.4% 32.7% 32.9% 33.1% 33.3% 33.5%
Debt Service Coverage Ratio 1.42 1.43 1.43 1.48 1.48 1.49 1.49
Main sewer line towards WWTP 1, including replacement of broken (corroded) water
mains out of the Mutnik well field
Tertiary Network within the City of Cazin
The main objective of the project is to improve environmental protection through proper col-
lection and treatment of the waste discharges. This will result in considerable prevention of
the contamination of the ground waters in the main well field providing drinking water to the
town of Cazin.
The economic evaluation takes into consideration only the impact of the Short Term Invest-
ment Program.
The basis for establishing project economic viability is the comparison of the “With project”
scenario against the “Without project” scenario. The “With project” option is represented by
the implementation of the proposed Investment Program. The without project scenario is
taken as the existing supply situation.
The implementation of the proposed program will provide the following economic benefits:
Savings from reduction of water losses and O&M costs
Avoided capital and operating costs of construction of a new water treatment plant
which will have to be built if no measures in water treatment are undertaken
The economic evaluation is carried out for the technical life of the project, i.e. 25 years. De-
tails are provided in Sheet EIRR in the financial model. The following table illustrates these
results:
Table 10-20: Economic Evaluation
KM
Financial year NPV 2013 2014 2015 2016 2017
Investment Capex -7'316'834 -6'856'706 -6'074'374 0 0
Total project costs -17'629'320 -7'316'834 -6'856'706 -6'074'374 0 0
Benefits
O&M costs saving 1'646'193 0 0 83'456 118'900 175'419
Water losses savings 5'323'434 0 0 329'411 333'124 566'142
Health benefits (savings from avoided health expenditure) 12'536'509 0 0 0 1'466'873 1'466'873
Avoided investment cost of water treatment plant 5'538'455 3'084'519 3'084'519 0 0 0
Avoided O&M costs of water treatment plant 6'750'747 0 0 721'898 721'898 721'898
Total economic benefit 3'084'519 3'084'519 1'051'310 2'521'895 2'754'913
Net benefit -4'232'314 -3'772'187 -5'023'064 2'521'895 2'754'913
Benefit/Cost ratio 1.8
EIRR 25 years 17.45%
The evaluation proves that the benefits of the proposed Short Term Investment Program
from the viewpoint of local economy and society are considerable and justify the planned in-
vestment. The EIRR of the project over its technical lifetime is over 17.45% while the benefit-
cost ratio is 1.8. The Investment Program is therefore considered to satisfy project procure-
ment and implementation plan
law and the respective Construction Law of Federation of B&H. In addition, the PPC will
have to prepare tender and bidding documents for the next project phase.
It is to be noted that the project schedule does not provide for any reserves. This means, that
the WWTP will have to be operational latest by the end of 2015. The Consultant regards this
as a serious challenge and will later in this text comment on it.
The implementation plan covers also preparation and implementation of the necessary train-
ing activities for the project implementation (see implementation schedule for activities of AM
Consultant).
Details are presented in the implementation plan attached on the next 2 pages.
and a Capacity Building (Accompanying Measures) Consultant to assist the Public Utili-
ty VODOVOD in implementing the project regarding administrative and financial mat-
ters.
On the following pages, a tentative time schedule for the project activities is presented (Fig-
ure 11.1)
design review,
site supervision,
participation at testing,
participation at commissioning,
participation during hand over,
The AM Consultant aims to improve wastewater system throughout the project area by sup-
porting local authorities with up-scaling and institutional development within 5 broad areas:
Organizational Enhancement,
Financial Management,
Regulatory Development,
The AM Consultant shall seek partnerships with appropriate domestic educational bodies,
technology centres and training entities to assure maximum transfer of locally adapted
knowledge to the beneficiaries of the capacity building programme.
Further investigations of the WWTP and presentation of the results to the public (during
WWTP construction),
In addition to the limitations which regard the technical feasibility of the project, the additional
time requirements respectively the limitations will appear firstly due to the need of auditing
the Project Documentation (Final Design for the sewage network, Primary Design for the
WWTP) and then also due to the issue of different approvals and permits in accordance to
the existing laws on spatial planning, construction and environmental protection (Urban, En-
vironmental, Water and Construction etc.) and additional approvals for the connections to the
specific infrastructure (electricity, water supply, telecommunications, road etc.).
In accordance to the above stated and including the experiences obtained during the past 5
years in the implementation of similar projects in B&H, the implementation period of the Pri-
ority Investment Plan (PIP) for the Cazin Waste Water Project is necessary to be extended
from 3 to 5 years.
The consequences regarding grace period of the loan need to be addressed during the loan
negotiations. Also, the affordability assessment within this report has not taken this con-
straint into consideration.
Table 11.16: Tariffs for water supply and sewage in Cazin Municipality
In addition to the above listed tariffs, the Company charges a monthly fee for maintenance of
water measuring devices in a range of 0.8 to 22 EUR equivalent, based on the profile of the
device.
by the Company and whose wastewaters are directly discharged into the ground. The re-
maining 29% of the households do not have septic tanks and they discharge their
wastewaters directly to the nearest watercourses.
The existing wastewater collection system is approximately 8 000 m long, made of concrete
pipes with diameters of Ø200 – 600 mm. It is of combined type (simultaneously collects both
wastewaters and rain).
The central collector is 400 m long and is confined to the very urban area of Cazin.
Wastewater collected by it is discharged directly into Čajin Potok through several outlets.
The rest of the constructed collection system is practically nonexistent due to its severe
damage and age.
No wastewater treatment is undertaken because the Municipality does not have a WWTP,
and no data exists if any of the industrial facilities perform any pre-treatment of their
wastewaters. However, it is estimated that the industry contributes less than 10% of total
wastewater discharge.
The main recipient of wastewaters in the urban area of the Municipality is Čajin Stream
which is a Mutnik River tributary which, in turn belongs to the Danube catchment area. Other
settlements discharge their wastewaters to numerous streams closest to them.
Regulation on Waste Categories with Lists (Official Gazette of FBiH, no. 9/05);
Law on Air Protection of FBiH (Official Gazette of FBiH, no. 33/03, 4/10);
Regulation on Emission Limits of Pollutants into the Air (Official Gazette of FBiH, no.
12/05);
Regulation on Limit Values of Air Quality (Official Gazette of FBiH, no. 12/05);
Regulation on Permitted Limits of Sound and Noise Intensity (Official Gazette of SRBiH,
no. 46/89);
IFC EHS Guidelines: Noise Management, April 2007;
Water Framework Directive 2000/60/EC;
The New Groundwater Directive 2006/118/EC;
The Urban Wastewater Treatment Directive 91/271/EEC;
Directive on Using Sewage Sludge in Agriculture 86/278/EEC;
WHO Guidelines for Drinking-water Quality, 2006;
Directive on Waste 2008/98/EC
Projects which require an Environmental Impact Assessment may not be issued an Urban
Planning Consent or Construction Permit unless an Environmental Permit is obtained. In
FBiH, the EIA procedure is regulated by the Law on Environmental Protection (Official Ga-
zette of FBiH, no. 33/03 and 38/09) and the Regulation on Facilities Subject to Obligatory
EIA and Facilities Which May be Constructed and Operated Only with a Valid Environmental
Permit (Official Gazette of FBiH, no. 19/04). The latter gives thresholds on facilities which are
under the jurisdiction of Federal Ministry of Environment and Tourism (FMET). Wastewater
treatment plants which treat over 50 000 PE are subject to environmental impact assess-
ment and the Environmental Permit is issued by the Federal Ministry. Plants and facilities for
which an environmental impact assessment is not required, as well as for plants and facilities
below the thresholds identified in FBiH regulation, the Environmental Permit is issued by the
competent cantonal ministry. Therefore, wastewater treatment plants < 50 000 PE are sub-
ject to cantonal regulations. Una – Sana Canton has its own Regulation on environmental
permitting for facilities, plants and other planned activities which may significantly affect the
environment (Official Gazette of Una- Sana Canton, no. 18/07 According to this regulation,
all plants and facilities subject to environmental permitting, must submit the Application for
issuance of the Environmental Permit to Ministry of Construction, Physical Planning and En-
vironment of Una-Sana Canton. The cantonal regulation also defines the content of the Ap-
plication which is in line with Annex IV of EU EIA Directive. The law also defines the content
of the Application which is in line with Annex IV of EU EIA Directive. Since this WWTP is en-
visaged to have 28 000 PE (14 000 in the first phase + 14 000 in the second phase), it will
be treated by this regulation and therefore under the jurisdiction of Ministry of Construction,
Physical Planning and Environment of Una-Sana Canton.
With regard to compliance of BiH law with EU standards, the following can be said:
Transposition of the Water Framework Directive (2000/60/EC) to national legislation is
very advanced, as 90% of it has been transposed through the Law on Waters (Official
Gazette of FBiH, no. 70/06). The Decree on Conditions for Discharge of Wastewater into
Natural Recipients and Public Sewer Systems (Official Gazette of FBiH ", No. 6/12) is in
accordance with provisions set out in the Urban Wastewater Treatment Directive
91/271/EEC;
Transposition of the Directive on Waste 2008/98/EC to national law has been to some ex-
tent implemented through the Law on Waste Management (Official Gazette of FBiH, no.
33/03 and 72/09) and several others, but it is not known when full transposition of the re-
Article 11 states that in case of partial expropriation, the body in charge for expropriation
must inform the owner about his/her right to request full expropriation;
Article 19 states that an appeal against the Decision on Expropriation can be submitted to
the FBIH Administration of Geodesy and Legal Ownership Affairs.
The WWTP will be implemented in the outskirts of Cazin town in 2 steps according to
the connection rate;
The Mutnik branch (secondary system) will also be connected to it at the same time;
Water supply in Mutnik will be at the same time be improved by rehabilitating parts of
the supply system (recurrent investments to achieve cost savings and gain more rev-
enues);
Priority measures should also be taken to decrease illegal connections in this region
within a district management programme (DMP) and been extended to other notori-
ous districts;
Water conditions are to be improved at a high priority level.
This project will be undertaken in two phases, one of which falls under the PIP and is of im-
mediate interest: the construction of WWTP Phase I, construction of a primary collector and
connection of the Municipality via secondary and tertiary collectors, and the LTIP phase
which includes expansion of the collector network and construction of a second WWTP to
fulfil PE requirements in the long term. This concept is shown in the table below:
This table shows the phases in which the wastewater and water supply of Cazin would be
carried out, with its main components:
1. Sanitation of Cazin City including the Mutnik branch, including WWTP to be implemented
in two stages (WWTP 1a and 1b);
2. Further development of the sanitation system towards Korana river including WWTP 2
and the connection of additional branches;
3. Sanitation of independent systems throughout the Municipality by constructing separate
systems and WWTPs.
ject will be reduction of pollutant discharges due to wider coverage by the sewage networks
and provision of a new WWTP. The national legislation, which is in line with EU Urban
Wastewater Treatment Directive, provides the discharge limits of the WWTP effluent that
must be satisfied before discharge to recipient. By implementing the PIP and satisfying the
prescribed conditions, it is expected that BOD5 will be reduced for approximately 264 tonnes
per annum, total nitrogen for approximately 38 tonnes per annum and total phosphorus for
about 10 tonnes per annum. Wastewater collection and treatment will ensure protection of
groundwater sources for drinking water by evacuating wastewaters from the water protection
zones.
Minimizing ecosystem deterioration: The ecosystem of the recipient river will be greatly
improved, as water will be treated prior to its discharge. The improved water quality of these
rivers will also have an indirect positive impact on species (amphibians, fish, etc.) and habi-
tats surrounding these rivers (i.e. floodplains).
Improvement of soil conditions and agricultural land use: A positive impact on soil quali-
ty may result if treated wastewater is reused in irrigation, thereby increasing soil fertility, re-
sulting in increased agricultural productivity and/or a reduction in the use of chemical fertilis-
er. However, wastewater must undergo further treatment (i.e. disinfection etc.) and be con-
tinuously monitored before use in agriculture.
Positive impacts of the wastewater collection system, including the WWTP are reflected in
the number decrease of septic tanks (increased number of households collected to the
wastewater collection system) from which wastewater and sludge were directly spilled on to
the ground.
Reduction of the water losses, energy efficiency improvements: The electricity cost is
estimated to be at around 20% of the total cost to the Company. The main cause lies in the
high number of pumping and booster stations which are needed for the transportation of
drinking water. These costs may be lowered significantly if technical and administrative loss-
es are addressed properly thus improving overall energy efficiency of the Company, as
pumping stations will not be as heavily burdened as they are now with old and leaky pipes
often of lower nominal pressure installed than required. Therefore, the replacement of water
supply pipelines will reduce the loss of water in the water supply system and therefore raise
the energy efficiency.
Additional environmental and social benefits arising from the project are:
Minimizing the risks of occurrence of water borne diseases in the Municipality of Cazin;
Aesthetics and ambient improvement of the entire area, especially along watercourses;
Creation of better environment for economic growth;
Increasing the standard of living in the municipality of Cazin.
Beside the environmental and social benefits, due to its nature, the proposed project might
have certain influence on the environment, primarily during the construction phase related to
the extension of the existing sewerage network, construction of a new secondary sewerage
network and construction of the WWTP as well as its operation later on.
The potential environmental impacts of the proposed project are presented and analyzed in
this Section with respect to the following aspects:
impact on species (amphibians, fish, etc.) and habitats surrounding these rivers (i.e. flood-
plains). However, it is necessary to consider adequate cascades for fish migration during the
river regulation process.
pollutant load discharged into Čajin Stream and Mutnica River will be achieved following the
commission of the WWTP as opposed to current discharge of untreated water into the near-
est watercourse. Wastewater collection and treatment will ensure protection of groundwater
sources for drinking water by evacuating wastewaters from the water protection zones.
Decree on Conditions for Discharge of Wastewater into Natural Recipients and Public Sewer
Systems (Official Gazette of FBiH ", no. 6/12) stipulates that all wastewaters must undergo a
secondary treatment at the WWTP prior to its discharge into recipients, and must satisfy the
following parameters:
BOD5 must be reduced minimally by 70 – 90 % (limit value is 25 mg/lO2);
COD must be reduced minimally by 75% (limit value is 125 mg/lO2);
Total suspended matter must be reduced minimally by 90% (limit value 35 mg/lO2);
Total phosphorus (Ptot) be reduced minimally 80% (limit value is 2 mgPtot/l);
Total nitrogen (Ntot) be reduced minimally70 - 80% (limit value is 15 mgNtot/l).
The limit values for the effluent discharge set out in this Decree are in line with EU Urban
Wastewater Treatment Directive 91/271 / EEC.
Due to inadequate operation of the WWTP, accidents, or uncontrolled influx of outside wa-
ters (for example, rainwater influx due to incorrect sewerage pipeline construction), incident
spills of wastewater which do not meet operation criteria may result in decrease of the recip-
ient quality. Adequate attention should be paid to inform downstream inhabitants of any ac-
cidental spills as well as intensified drinking water quality control should be ensured during
such accidents.
11.5.3 Soil
CONSTRUCTION:
Construction works related to the removal of superficial layer of humus, excavation of the
ground, as well as the presence of mechanization units and workers on the construction
sites will cause appearance of certain negative impacts on soil.
Mechanical impacts during excavation works which result from the presence of mechaniza-
tion units, vehicles and workers on the construction sites might be mitigated with good work-
ing practice. If proposed mitigation measures are properly implemented, impacts on land will
not be significant.
Execution of construction works on steep sloped terrains might cause erosion of the land
and removal of the erosion drift. Implementation of proper mitigation measures would mini-
mize impacts on the soil and environment in general.
Topsoil reutilization should be done using the best available procedures and techniques. Be-
fore construction works, the topsoil should be removed and stored beside the excavation site
or in locations that do not result in nuisance to the general public and properly protected to
avoid loss and/or degradation. After the construction works have been completed, the soil
should be replaced and pre-construction conditions reinstated. Adverse impacts may occur
as a result of delays in the reinstatement of the working area. Prolonged storage of topsoil
along trenches will lead to the impoverishment of the seed bank, and a reduction in the ger-
mination rate of seeds.
Possible soil contamination may occur resulting from uncontrolled waste disposal, from
wastewater disposal pertaining to the toilets from the construction sites and from oil spills
pertaining to the mechanization and vehicles on site. These impacts may be mitigated using
good construction practices and proper mitigation measures of proper disposal of said pollu-
tants.
Spare soil (if not contaminated) and other inert waste that needs to be disposed of could be
used as cover or as reinstatement material at the local landfill site. In addition, non contami-
nated subsoil could also be used for the reinstatement of other construction sites. If fill mate-
rial is needed (e.g. sand, aggregate, etc.), it should be supplied from licensed quarries
and/or licensed subcontractors authorized to use approved quarries.
OPERATION:
Sludge
The impact of the WWTP on soil conditions during operation can have indirect effects on
public health and the environment. Sludge is an unavoidable by-product of biological
wastewater treatment plants, and can be handled in several ways (disposal at landfill, incin-
eration and agriculture use following its pre-treatment). Appropriate actions for safe disposal
or reuse of this sludge should be considered with due respect as they depend on several
factors (economic, proximity of sanitary landfill, agriculture development of the area, etc.).
Sludge reuse, when possible, is prescribed by the Decree on Conditions for Discharge of
Wastewater into Natural Recipients and Public Sewer Systems (Official Gazette of FBiH ",
no. 6/12). However, it must meet certain criteria which make it harmless to the environment,
which are prescribed by the “Regulation on Animal Waste and Other Non – hazardous Mate-
rials of Natural Origin Which May Be Used for Agricultural Purposes” (Official Gazette of
FBiH, no. 8/08). This should be considered accordingly during the development of any
sludge management procedures. The aim, therefore, is for the medium-term, to have a flexi-
ble solution for the sludge disposal, on which the sludge treatment is orientated. The follow-
ing actions are therefore proposed:
PIP: WWTP 1a should have constructed wetlands, which will allow the sludge to be
buffered on-site over the next ten years. This means of sludge stabilization requires
a large basin volume, but is a simple process.
LTIP: With the construction of WWTP 2, the implementation of WWTP 1b and the
significantly higher amount of sludge, the anaerobic digestion on-site of WWTP 1 for
both systems seems to be a realistic option. That would allow for a system that can
produce thermal and electrical energy by biogas. Furthermore, it would allow for re-
ducing and stabilizing the amount of sludge significantly. The product from the diges-
tion is suitable for all conventional disposal methods (landfill, incineration, fertilizer
for agriculture). After all, the existing constructed wetlands can be re-used for other
purposes.
It would be wise to reserve some space of the constructed wetlands for later installation of a
solar sludge drying facility.
Compared to conventional sludge drying beds, sludge stabilization method for WWTP 1a
stage that includes constructing wetlands has lower costs of maintenance, very low energy
consumption (only for pumping sludge into wetlands and reject water back to wastewater
treatment plant) and high levels of mineralization and dewatering of sludge due to natural
decontamination and water-extracting properties of plants used in these systems. However,
this method requires large basin volumes and does not represent a final sludge treatment.
The final sludge treatment needs to be addressed in line with concepts on national and re-
gional level that would specify clear disposal routes in the future. In any case, the sludge res-
idue from wetlands needs to satisfy the requirements set in the Regulation on Animal Waste
and Other Non – hazardous Materials of Natural Origin Which May Be Used for Agricultural
Purposes (Official Gazette of FBiH, no. 8/08). The limit values set out in this regulation are in
line with EU Sewage Sludge Directive 86/278/EEC.
Other
Other potential adverse impacts on soil can also occur as a result of the improper handling of
other solid wastes, including grit/sand and debris from the screening stations, aerated grit
chamber, sedimentation tanks etc; and soil contamination from pollutants in wastewater (i.e.,
grease, excess nutrients and organic matter), causing poor soil productivity, harm to vegeta-
tion and unsightly conditions.
A potential positive impact on soil quality may result if treated wastewater is reused in irriga-
tion, thereby increasing soil fertility, resulting in increased agricultural productivity and/or a
reduction in the use of chemical fertiliser. However, wastewater must undergo further treat-
ment (i.e. disinfection etc.) and be continuously monitored before use in agriculture.
Positive impacts of the wastewater collection system, including the WWTP are reflected in
the number decrease of septic tanks (increased number of households collected to the
wastewater collection system) from which wastewater and sludge were directly spilled on to
the ground.
River regulation pertaining to construction of the WWTP will also have its positive impacts on
land use – intensifying agricultural activities and creating conditions for cultures which cannot
grow in flood areas, but only if the riverbed is kept in good condition throughout time.
11.5.4 Air
The Law on Air Protection (Official Gazette of FBiH, no. 33/03 and 4/10) regulates technical
conditions, measures for prevention or reduction of air emissions which are caused by hu-
man activities on the territory of FBiH. Furthermore, the Law implies planning strategy for air
quality protection, special emission sources, cadastre of emissions and air quality.
CONSTRUCTION:
During construction, the majority of air pollution is expected from earthmoving and pipe-
laying machinery; construction activities, such as excavation and backfilling of trenches; and
vehicles transporting materials, equipment and construction personnel to and from site. Dust
will be released into the atmosphere from excavation and earthmoving operations. The areas
expected to be affected will be within several hundred meters of the working area; however,
dust is not expected to represent a significant issue to local residents provided the proposed
mitigation measures such as dust suppression techniques (e.g. soil damping, truck covering,
etc.) are properly implemented. Such impacts will be short term and neither significant influ-
ence on local population nor pollutant emission above the values set by legislation in force is
not expected. Emissions from diesel engines will be kept to a minimum by ensuring regular
maintenance and use of high quality fuels as well as shutting equipment down when not in
use.
Therefore, the adverse impacts on air quality will be short term and are not considered signif-
icant.
OPERATION:
During the WWTP lifecycle, emissions pertaining to its operation (biological treatment) are
unavoidable. Several emissions are expected, including greenhouse gasses and aerosols
which in the air have direct and indirect effects to the atmosphere, and they can also spread
viruses and bacteria to the surrounding environment. Bad odour and an increased quantity of
insects may occur if the WWTP is not operated according to projected parameters or due to
extremely high temperatures. The location of WWTP is planned in the area relatively distant
from the urban part of Cazin , with a small number of inhabitants in its vicinity. However, to
minimize the impacts of odour generation on nearby residents and the surrounding area, it is
necessary to undertake mitigation measures which include placing facilities which are the
main sources of odour/gas emissions in closed units or buildings; installation of gas and
odour control devices; and adherence to good housekeeping procedures, which lowers the
retention time of wastes in the facilities, as well as placement of a natural tree barrier to-
wards the road and inhabited areas.
11.5.5 Noise
CONSTRUCTION:
Increased noise level is expected during the execution of construction works as a result of
presence of people and vehicles and operation of mechanical units, such as compaction, ex-
cavation, drilling or mechanical digging.
Since the location of the activities is governed by the need to provide the sewage collection
and treatment system for the Municipality, it is unavoidable that some noisy works will be
undertaken in sensitive residential areas.
The FBiH and the EU have legislation in force regulating the levels of permissible noise from
mobile plants and machinery. These limits shall be respected in the course of any construc-
tion activities through the implementation of mitigation measures which include scheduling
construction activities so those which generate noise and vibration are operated separately
and during normal daytime periods; use of noise control devices, such as mufflers, silencers
etc.
Construction works will mostly be executed during the day, but depending on both the type
of work and the deadline for termination of the construction works, execution of some noc-
turnal activities cannot be excluded.
Sewerage pipe replacement and construction will also progress along the planned sewerage
network and, as a result, construction equipment would only be in close proximity to any giv-
en residence for a limited time. The noise impacts at any location would therefore be short-
term.
OPERATION:
Noise will be generated during operation of the WWTP. Potential noise sources include the
preliminary treatment facility, pumping station, compressor station, sedimentation tank (sec-
ondary) and biological treatment facility. Mitigation measures are proposed to minimize such
impacts, which include placing facilities or motors which emit high noise levels in closed
buildings or units; regular maintenance and inspection of all plant facilities; adopting good
housekeeping procedures and the use of noise control equipment, i.e. mufflers, enclosures
etc. The WWTP is located in a rural area away from densely populated areas. Therefore,
noise impacts associated with plant operation are not considered significant; however, resid-
ual noise impacts are recognized during plant operation.
OPERATION:
During operation of the WWTP, wastes are expected to be generated from preliminary and
mechanical treatment operations (solids, sands and grease). These should be collected in
closed tanks and treated and disposed of by a licensed contractor. The municipal waste of
Cazin is disposed at Meždre -Vlaški Do Landfill in the Municipality of Bosanska Krupa. This
landfill is not sanitary and therefore not suitable for the disposal of hazardous waste or
sludge. Other suitable landfill sites in the surrounding area are currently not available. The
major waste occurring from the WWTP is sludge. Sludge management has been explained
in the section above.
Since BiH has very few operating WWTPs, the sludge disposal paths are not well estab-
lished. In the long-term, sludge incineration should be preferred over disposal at landfill site.
Potential hazardous wastes (oils from pumps, transformers, etc.) will have to be sealed and
handled by authorized operators of such waste.
Some solid waste (mainly pipes) may be expected to occur during regular pipe maintenance
and repair. They should be disposed of accordingly or recycled if possible.
In order to mitigate these disturbances, it is necessary to phase the project and traffic man-
agement carefully and where possible construction traffic should be conducted during off -
peak traffic periods in order to ensure free flow of vehicles and pedestrians. During the
WWTP construction, construction traffic will have to be restricted to approved access roads.
Advance notice of any diversions should be given to the population, and adequate signs
should be placed.
placement of the WWTP in an area not densely populated, with a green buffer zone
planned around it,
the WWTP location should be flood - proof so all river regulation works are to be execut-
ed prior to WWTP construction,
all facilities within the WWTP which generate high noise levels, or emit strong odours
should be placed in closed units where possible,
closed unit facilities which generate air pollution should contain air treatment devices, and
the aeration chamber should be covered to prevent distribution of aerosols,
open collectors to be avoided where possible,
development of an emergency plan which will ensure minimal wastewater treatment dur-
ing accidents,
reserve power supply to ensure that priority units keep running,
use of corrosion resistant materials.
level as well. Since the implementation of such measures is direct responsibility of the Con-
tractor, specific requirements for both execution of works and implementation of mitigation
measures ought to be included in the tender/contract documentation.
Vegetation clearance will be minimized. Any damaged trees or vegetation will be restored
following construction.
Installation of temporary disposal sites for the construction material, and an area which
would serve for rinsing of concrete pumps and mixers (if used), as well as the area for
washing wheels with adequate purification treatment;
Procurement of licenses and approvals for all the equipment, which should be in accord-
ance with the local legislation and if possible, with EU standards;
Use of modern machinery and vehicles which fulfil environmental standards regarding
emission of gaseous pollutants (more complete combustion), usage of filters which serve
for the reduction of soot particles, provision and usage of fuels with an adequate chemical
composition (low content of sulphur);
Use of modern machinery and vehicles, which have isolated noise sources (motors, ex-
haust system). This predominantly includes either acquisition of new machinery, or im-
plementation of measures which include application of additional sound isolation systems,
as well as continuous maintenance of the same. Besides the implementation of such
measures, machinery functioning in time range from 07:00am to 08:00pm (especially on
all sections of the route which are less than 60 m distant from the settlements and resi-
dential areas) is recommended;
Use of biodegradable lubricants and oils for proper functioning of change gears. Further-
more, the maintenance, filling and cleaning of devices will be performed outside construc-
tion site in a paved area adequately separated from surface waters. Moreover, all the
machinery should be parked in strictly designated areas. Specific protection measures for
the prevention of land contamination with oil, crude oil and its derivatives should be un-
dertaken on previously mentioned parking places. In a case of land contamination, due to
the accidental oil spills or as a result of some other incident, contaminated layer of the soil
should be removed and transported to the designated disposal site;
Use of dirt, unpaved roads should be minimized;
Used waters from the construction site should be collected by means of watertight septic
tanks and should be treated (right on construction site or on a distant location) before
their discharge to the recipient;
Excavated materials will be stockpiled on the hill side of the trench. Exposed stockpiles of
excavated material will either be covered or watered to prevent dust and wind erosion.
stockpiles will be protected from vehicle movements.
Every kind of temporary or permanent disposal site of waste materials beside river banks
should be strictly prohibited. All the excavated material, which will not be used in con-
struction procedures should be disposed at proper locations;
Areas which are susceptible to erosion, should be protected with both stabilization agents
and plants which serve for the prevention of the same;
Adequate support of construction pits; and adequate fencing of construction sites and site
admittance to be controlled to ensure access by authorized personnel only.
Cleaning of the machines and vehicles is not allowed on the construction site;
Before the execution of the earthworks, humus and fertile layers of the soil should be re-
moved and stored with adequate protection from the contamination for subsequent reuse.
After the construction works have been completed, the soil should be replaced and pre-
construction conditions reinstated;
Any surplus excavated material will be disposed of by a licensed contractor.
During construction works in areas containing other utility networks (electricity, telephone
lines, etc.), representatives of those utility providers should be present on site with under-
ground installation cadastres in order to minimise risks of their damage or destruction due
to excavation. In case of their damage, the contractor is obliged to undertake repairs.
Dust suppression techniques (i.e. the application of water, spraying the site with water
mist) need to be performed when working in areas with dry soils or where activities gen-
erate airborne dust;
Emissions from diesel engines will be kept to a minimum by ensuring regular mainte-
nance and use of high quality fuels as well as shutting equipment down when not in use;
A strict duty of care will be enforced on project managers and contractors. Secure waste
storage sites will be established in defined areas away from watercourses and drains.
Uncontrolled burning and burial of waste will be prohibited. All waste material will be
transported and disposed of off-site by a licensed waste contractor. Hazardous wastes
(grease, oil contaminated material, solvents) will be collected in closed tanks and dis-
posed of by licensed contractors;
Strict control of new sewage connections to ensure that no mixing of rain and
wastewaters occur.
WWTP related mitigation measures to be undertaken are as follows:
Detailed mitigation measures for WWTP will be outlined in the Application for Environ-
mental Permit that needs to be developed in the process of environmental permitting;
Occurrence of leaks will be minimized by ensuring a good standard of quality during pro-
ject design, preparation and construction
Good project design need to ensure that facilities which are the main sources of
odour/gas emissions are placed in closed units or buildings; gas and odour control devic-
es need to be installed incl. a natural tree barrier towards the road and inhabited areas
The recipient should be regularly monitored to ensure that water quality standards pre-
scribed by the Decree on Conditions for Discharge of Wastewater into Natural Recipients
and Public Sewer Systems (Official Gazette of FB&H ", no. 6/12)(based on the Law on
Waters – Official Gazette of FB&H, no. 70/06) are met;
Good housekeeping procedures need to be adopted and implemented;
Potential Envi-
Location of Time of monitoring /
Phase ronmental Im- Parameter to be monitored Method of monitoring
monitoring Responsibility
pacts
According to the
Operation sewage network
maintenance plan /
(for WWC, Corrosion resistance
Pollution of Company (Operator);
sewage Water tightness Pipelines and water tightness
groundwater
network and control For WWTP – WWTP
WWTP) maintenance crew
Potential Envi-
Location of Time of monitoring /
Phase ronmental Im- Parameter to be monitored Method of monitoring
monitoring Responsibility
pacts
Potential Envi-
Location of Time of monitoring /
Phase ronmental Im- Parameter to be monitored Method of monitoring
monitoring Responsibility
pacts
limit values are set in the
Regulation on animal waste
and other non-hazardous
materials of natural origin
which can be used for
agricultural purposes (Offi-
cial Gazette of FBiH, no.
8/08)
Wind direction and speed
(m/s)
Air temperature (°C)
Air humidity (%) Twice a year (con-
ducted during a 10
Operation Air pollution from Precipitation (mm/min) Plant
Air quality meters day period, in cold
(WWTP) plant facilities Ammonia (μg NH/m3) boundary and warm periods) /
Hydrogen-sulphide (μg Company (Operator)
H2S/m3)
Mercaptans (μg
C2H5SH/m3)
Noise level Twice a year (con-
Operation Noise emissions ducted during a 5 day
< 70 dB (A) day and night Plant Measurement devic-
from WWTP period) /
(WWTP) (the permissible level for boundary es
operation
industrial land use) Company (Operator)
Regularly during
Soil and water Visual inspection, operation /
Operation Waste generation and On site,
pollution from disposal records or Company (Operator),
(WWTP) management around site
operation waste receipts from landfills WWTP maintenance
crew
Regularly during
Leaks/spills of operation , daily or
fuel, lubricants, weekly as appropri-
Operation Leaks and spills of hazard- On site, Visual inspection;
paints, solvents ate /
(WWTP) ous substances around site accident reports
etc. to the envi- Company (Operator),
ronment WWTP maintenance
crew
If the WWTP is to be decommissioned, monitoring of traffic safety, air quality, noise levels,
soil and water pollution form decommissioning waste, leaks and spills of lubricants, paints,
solvents etc. as well as landscape degradation, needs to be conducted regularly during de-
commissioning activities.
11.7.2 Reporting
Monthly progress reports should be prepared by the Contract Supervisor and sent to Munici-
pality/Company HSE management for approval. ESAP and PR compliance implementation
issues should be explicitly included in the monthly Progress Reports. In addition, the respon-
sible HSE person should prepare periodic HSE progress reports and a summary should be
made publicly available according to PR10 and the SEP.
Prior to the commencement of the Project and during the construction works, the Contractors
will submit monthly information regarding the progress of works, which will be disclosed on
the Municipality website as well as at the LCOs.
The work schedule and its potential amendments will be submitted to the Local Community
Offices approximately two weeks prior to the commencement of the construction activities.
The schedule will provide information on the timing of commencement and finalization of the
works which may impact the affected groups (such as temporary access limitations, noise
and dust emissions).
The opportunity to raise grievances shall be provided to the public; contact details for dis-
closing information or allowing expressing concerns will be presented. The notification will be
disclosed on the Company website, on the bulletin boards, and at LCOs. Details on griev-
ance procedure are reported in the Stakeholders Engagement Plan developed as part of this
assignment.
In summary, the Contractor will:
contact directly all parties in order to provide information on the construction works at
least two weeks prior to commencement of works, disclosing the schedule of works;
monthly update the information on the progress of works (to be delivered to the Company
for online disclosure, and affected people); and
dis-close information on any delays to affected persons.
EBRD policies
The provisions of EBRD Environmental and Social Policy (2008) and Public Information Poli-
cy (2008) for public consultations and access to information are fully taken into account to
prepare the Stakeholder Engagement Plan for the Project.
The EBRD Environmental and Social Policy cover the environmental and social dimensions
of sustainable development. EBRD considers stakeholder engagement as an essential part
of good business practices and corporate citizenship, and a way of improving the quality of
projects. In particular, effective community engagement is central to the successful man-
agement of risks and impacts on communities affected by projects, as well as central to
achieving enhanced community benefits.
According to the Policy, stakeholder engagement is an ongoing process involving:
(i) The client’s public disclosure of appropriate information so as to enable meaningful
consultation with stakeholders,
(ii) Meaningful consultation with potentially affected parties, and
(iii) A procedure or policy by which people can make comments or complaints. This pro-
cess should begin at the earliest stage of project planning and continue throughout
the life of the project.
The client’s public disclosure of appropriate information so as to enable meaningful consulta-
tion with stakeholders, meaningful consultation with potentially affected parties, and proce-
dure or policy by which people can make comments or complaints. This process should
begin at the earliest stage of project planning and continue throughout the life of the project.
EBRD expects clients to identify and interact with their stakeholders on an ongoing basis,
and to engage with potentially affected communities through disclosure of information, con-
sultation, and informed participation.
The EBRD Public Information Policy sets out how the EBRD discloses information and con-
sults with its stakeholders so as to promote better awareness and understanding of its strat-
egies, policies and operations. The project documentation will be enclosed for public on the
EBRD website in accordance with this policy.
Particular attention shall be paid to PAPs and vulnerable groups, especially to those who are
directly affected by Project activities. PAPs and vulnerable groups include individuals or
groups greatly affected by the Project and who have very little ability to influence the Project
while having in mind that vulnerable groups need to be informed and consulted in a specific
way, suited to their needs and vulnerability status.
Common practice of the Company in terms of informing the public of work to be performed in
their communities and individual properties is via the Company’s website
(www.vodovodcazin.com), local radio station RTV Cazin, numerous portals (www.cazin.net,
www.krajina.ba, and www.kip.ba, www.usk.ba), etc.
Please see Table 4.1. for identified stakeholders and proposed communication methods.
Detailed Descrip-
Identified
tion of Identified Popula- Proposed Communication tools
No. Stakeholder Contact Relevant Issues
Stakeholder tion
Group
Groups
Municipality of
Cazin
Trg Prvog Disclosure through the
predsjednika Municipality website
Predsjedništva
(www.opcinacazin.ba)
Bosne i Hercego- Delivering information by
Persons and vine, Alije Izetbe- Providing infor-
post
Project Affect- households, busi- govića br.1 mation on construc- Delivering relevant doc-
1. ed Persons nesses along the 77 220 Cazin tion and expropria- umentation to local
(PAPs) route of the new USK tion activities: communities on whose
pipeline Bosna i Hercego- territory expropriation is
vina carried out
E-mail: Public meetings
info- Individual meetings on a
desk@opcinacazin.ba need basis
Tel: +387 (0)37 515 300
Fax: +387 (0)37 514 314
Detailed Descrip-
Identified
tion of Identified Popula- Proposed Communication tools
No. Stakeholder Contact Relevant Issues
Stakeholder tion
Group
Groups
Disclosure through the
Municipality website
Population affected
(www.opcinacazin.ba)
by construction and
Disclosure through local
by access re-
Local residents web portals
strictions, including Providing infor-
and businesses (www.cazin.net,
the people living mation to the public
in the project ca. 16 500 www.krajina.ba,
alongside the on construction
2. area
transportation
house-
activities:
www.kip.ba,
Users of new holds www.usk.ba)
routes; Population
water supply Local media: RTV Cazin
who will benefit
Posters in the LCOs
though the water
Public meetings
supply.
Individual meetings ona
need basis
Cazin,Čizmići
Ćoralići, D. Koprivna
Gnjilavac Providing infor-
Ljubijankići
mation on planned
Local Commu- Miostrah
Mutnik
construction works, Contacts through internal
nities in the
Slatina consultations regard- communication channels
Project loca-
5. tion Stijena ing the prepared during project prepara-
N/A plans and documen-
Šturlić tion and implementation
Ostrožac tation, grievance Public meetings
Polje management:
Pjanići
Pećigrad
Vrelo
Prošići
G. Koprivna
Detailed Descrip-
Identified
tion of Identified Popula- Proposed Communication tools
No. Stakeholder Contact Relevant Issues
Stakeholder tion
Group
Groups
Liskovac
Krivaja
Majetići
Skokovi
Trž. Raštela
The Company will also provide printed copies of the above-mentioned documents that will be
available in its office, the Municipality building (at the Information Centre), and the Local
Community Offices (LCO) – Please see Annex B for the list of affected communities. All
PAPs will be informed on the availability of these documents at the offices through local
radio and newspapers and project information sheets delivered and posted at the LCOs.
Access to information for identified vulnerable groups will be facilitated by the Company with
the support of Municipality as appropriate for each person/family according to their specific
needs and/or situation. Please see Table 4.1 for proposed communication tools with each
stakeholder group.
Information provided by the contractors
During the construction works, the contractors will submit monthly information regarding the
progress of works, which will be disclosed on the website of the Company and Muncipality.
The schedule of works and potential amendments to the schedule of works will be submitted
approximately two (2) weeks prior to the commencement of the construction works to the
LCOs as well as local radios for broadcasting. The schedules will provide information on the
schedule of commencement and finalization of the works which may impact the affected
groups (such as changes in road access, noise).
At the same time, the opportunity to raise grievances will be provided (grievance mechanism
in Chapter 7), and the contact information for disclosing information or allowing expressing
concern will be presented. The notification will be disclosed on the website, bulletin boards,
and LCOs.
In summary, the contractors will:
Contact directly all parties in order to provide information on the construction works
at least two weeks prior to commencement of works, disclosing the schedule of
works;
Monthly update the information on the progress of works (to be delivered to the
Company for online disclosure, and affected peoples via mail or personal contact);
Disclose information on any delays to affected persons.
2
The Company is entitled to receive and respond to formal enquiries in English language, and to submit information
and documents in English language.
the request to the competent institution or legal entity. The Company is obliged to notify the
requester about the undertaken measure by issuing a Conclusion. Within fifteen (15) days
upon receiving the request, the Company is obliged to notify the requester whether he/she
3
has been granted access to the requested information .
In case the Company grants access to requested information completely or partially, it is
obliged to notify the requester by issuing a Decision. The Decision determines the possibility
of personal access and examination of information in the offices of the Company at a time
suitable for the requester and the Company personnel, or the possibility of delivering the in-
formation in written form to the requester if the document containing the information does not
exceed ten pages.
The official form for requesting access to information can be found in Annex E.
3
In case of exceptions and the need to examine the confidential commercial information or information of public in-
terest, the deadline may be prolonged, according to the LFAI. The requester must be notified of all actions and rea-
sons for prolonging the deadline.
All Contractors must follow this grievance mechanism, especially during the construction
phase to address grievances. The Company and Municipality monitor the Contractor’s
application of grievance mechanism and be involved in addressing the concerns through the
above-described process.
At all times, complainants are also able to seek legal remedies in accordance with the laws
and regulations of the FBiH.
For general information on the Project and grievances related to land acquisition:
Municipality of Cazin
Trg Prvog predsjednika Predsjedništva Bosne i Hercegovine, Alije Izetbegovića br.1
77 220 Cazin
USK
Bosna i Hercegovina
E-mail: infodesk@opcinacazin.ba
Tel: +387 (0)37 515 300
Fax: +387 (0)37 514 314
Reference Number:
Full name
Contact information
By Post: Please provide mailing address:
______________________________________________________________________________
Please mark how you wish to be
______________________________________________________________________________
contacted (mail, telephone, e-
_______________
mail).
By Telephone: _______________________________________________
By E-mail
Perefered language for
communication
Bosnian / Serbian / Croatian
English (if possible)
Description of Incident for Grievance What happened? Where did it happen? Who did it happen to? What is the
result of the problem?
Signature: _______________________________
Date: _______________________________
Please return this form to:
_____________________________________________
Name and last name of requester
_____________________________________________
Address
_____________________________________________
Telephone/telefax/e-mail
Date ____________________
____________________________________________________________________________________________________________________________
____
____________________________________________________________________________________________________________________________
____
____________________________________________________________________________________________________________________________
____
____________________________________________________________________________________________________________________________
____
____________________________________________________________________________________________________________________________
____
(Indicate precisely which information you are requesting and describe as precisely as possible).
Requester
________________
Note: The first ten pages of duplication of material of standard format is free of charge, and all other requested information with a larger
number of pages shall be paid by the requester in advance.
13.1 Introduction
The main objective of the FOPIP is to identify measures in priority areas to improve the
quality of water related services, and the financial and operational performance of the Com-
pany. Based on the results of the assessments from the chapters 4 to 6, priority areas were
identified. The Consultant also defined detailed performance indicator targets for the Com-
pany to address, which are used as guiding principles in the Public Service Agreement
(PSA) between the Company and the Municipality of Cazin. The following chapters provide
information about the proposed improvement measures and the related indicators.
13.2.1 General
The improvement of the financial performance of the Company means maximizing total rev-
3
enues per m water sold under consideration that the tariff structure is regulated by the local
authorities and minimizing the costs for operation and investments. Performance improve-
ments shall be focused on the following areas:
Increase collection efficiency
3
Decrease operating costs per unit (KM/m )
Achieve a sustainable proportion between costs of employees and total operation costs
The Company can achieve these goals if they introduce the practice of systematic monitor-
ing of several financial performance indicators. The analysis of the results should be used for
decision making targeted at applying appropriate measures for maintaining these indicators
at the right level.
Installation of an automatic control system for the whole water supply system of Cazin to
monitor the operation in a cost effective way according to the LTIP (WS07)
Application of effective material and resource management
Selection of a cost-effective method for waste water treatment and sludge disposal
13.3.1 General:
The improvement of the operational performance of the Company means that the most cost-
effective measures are planned and implemented with minimizing the resources and time
needed. Performance improvements shall be focused on the following areas:
Decrease non-revenue water
Increase proportion of customers with correct water meters
Improve number of needed interventions on the water supply and sewerage networks.
(the number is expected to be gradually reduced if works on these networks are imple-
mented in a professional way).
Remark: The non-water revenue rate has been calculated for the entire service area as well
as separately for each of the four main systems and the two subsystems. It allows more ef-
fective directing of resources to areas with high non-revenue water.
Action Plan / Measures:
Implementation of the district management programme according to the LTIP over an
unlimited period of time (WS01)
Implementation of a pipeline replacement and renewal programme according to the LTIP
(WS04)
Installation of an automatic control system for the whole water supply system of Cazin to
monitor the operation in a cost effective way according to the LTIP (WS07)
13.3.4 Improve Number of needed Interventions on the Water Supply and Sewerage
Networks.
Performance Indicator:
The performance indicator for the number of interventionsis defined as follows:
Number of interventions on the water supply and sewerage networks
The envisaged performance indicator targets are presented in the table below:
Indicator 2011 Target 1 (2015) Target 2 (2025)
(No) (No) (No)
Number of Interventions for rec- 1’936* 1’700 1’000
orded Breaks and Leakages
13.4.1 General
The improvement of the service quality of the Company means on the one hand supplying
drinking water of impeccable quality during 24 hours as well as collection and treatment of
waste water but on the other hand it also means raising the awareness of the Company
about the importance of customer care and performing customer oriented services as part of
their commercial activities. Performance improvements shall be focused on the following ar-
eas:
Decrease drinking water quality failures
Ensure a good water supply without interruptions
Increase coverage with wastewater services
Increase percentage of positive feedbacks about customer satisfaction
Application of HACCP (Hazard Analysis of Critical Control Points) principles in the drink-
ing water supply
Implementation of EBRD-wastewater project consisting of facilities for wastewater treat-
ment and collection
Expand the service area for piped waste water collection and increase number of cus-
tomers benefiting from wastewater treatment services
*small areas with reductions and other ones with problems related to low pressure at peak demand
nd
Development of fund-raising scheme for implementation of 2 stage of project in 2035
according to LTIP
The total number of positive feedbacks from surveys about customer satisfaction divided by
the total number of customers interviewed, expressed in percentage.
The envisaged performance indicator targets are presented in the table below:
Indicator 2011 Target 1 (2015) Target 2 (2025)
(%) (%) (%)
Customer Satisfaction: n. a. 75 85
The envisaged performance indicator targets are presented in the table below:
Indicator 2011 Target 1 (2015) Target 2 (2025)
- Technical & Operational Matters moderate good good
- Financial & Administrative Matters good good good
- Obligatory Reporting n.a. good good
Table 1 Review of the Project against PR1 – Environmental and Social Appraisal/Management
Requirement of EBRD PR1 Compliance Status (PIU, Integrated Quality Management System Implementation: Department)
Service of technical
Records and payment Production and
preparation and
Commercial service (2) service distibucion service
development
(12) (7)
(2)
Maintenance of water
Vehicle maintenance
Accountancy service supply and water waste
service
(3) netwok service
(3)
(22)
The Company has no written HSE/Social Policy, does not hold any quality/environmental certification (e.g. International
Standard Organization [ISO] 14001, ISO 9001 or the Occupational Health and Safety Assessment Series [OHSAS] 18001)
and no HSE Plan/Manual is in place. However, the Company is functioning based on its internal regulation system: the Stat-
ue, Rulebook on Occupational Safety (adopted in 2004), Rulebook on Fire Protection (adopted in 2004) and General Act on
Maintaining, Use and Monitoring of Water Facilities and Response in Case of Breakdown or Accident (adopted in 2010),
Rulebook on Personal Protection Equipment (2004). In addition, the Client as a public company has to adhere to the set of
legislation prescribed by the relevant authorities.
The lack of a comprehensive HSE Management Plan at the Company’s level has repercussions on the global HSE perfor-
mance. Although, in terms of drinking water sampling and testing, the Company is compliant with national and EU legislation,
during the ESDD, some environmental issues related to wastewater management have been revealed: wastewater man-
agement is not in compliance with EU standards (i.e. direct sewage discharge on surface receptor without any treatment).
The aim of the project is to improve this condition and establish compliance with the EU standards.
The Company’s management will need to define its own HSE Policy, HSE Standards and Procedures in accordance to the
cited international standards. A specific programme to meet EU requirements in terms of wastewater management should be
developed and applied by the Company.
A specific reference to the contractor’s HSE-MS should be included in the Tender for the new wastewater system construc-
tion.
THE PROJECT: The feasibility study for the Project is being developed within this assignment, and shall be in compliance
with the EU and national requirements.
Compliance to be achieved via ESAP.
The impacts not assessed in the Pre EIA will be evaluated in the Environmental and Social Review Summary (ESRS) Report
developed as part of this assignment. The corrective measures designed to address the impacts identified in the ESRS will
be provided in the Environmental and Social Action Plan (ESAP). The mitigation measures and actions included in the cited
documents will allow reaching a level of details appropriate to the scale of Project impacts. However, as a part of permitting
process, the construction of WWTP will require the development of EIA study.
The implementation of Pre EIA findings supplemented with the provisions of ESAP developed as a part of this Feasibility
Study will enable the Project to meet both the EBRD and the EU requirements. Therefore, Tender documentation should
include the mitigation measures reported in the Pre EIA as well as in the ESAP. It is expected that the Client will implement
the ESAP in accordance with the defined schedule, and with specifically assigned responsibilities for implementation, moni-
toring requirements and reporting.
Compliance to be achieved via ESAP.
A specific ESAP supplementing the Pre EIA will be developed as part of this assignment.
Tendering documentation should include the requirement to comply with mitigation measures reported in the Pre EIA and the
ESAP. It is expected that the Company will implement the ESAP in accordance with the defined schedule, and with specifi-
cally assigned responsibilities for implementation, monitoring requirements and reporting.
Compliance to be achieved via ESAP.
Managing contractors
PR1.19. It is the client’s responsibility to en- PARTIALLY COMPLIANT
sure that contractors working on project sites
THE COMPANY:Contractors are not involved in Company’s daily business; however, periodic activities, such as equipment
meet EBRD PRs. Effective contractor man-
maintenance and repair, are carried out by the contractors. In the tendering stage, the Company requires that the Contrac-
agement includes:
tor possesses special licences for conducting activities, especially when dealing with hazardous substances.
assessing environmental and social risks
associated with contracts THE PROJECT: Tender for the Project Construction will be issued by the Company. Project Supervision will be also as-
including relevant PRs/ESAP provisions to signed trough a dedicated Tender. Since the Project is still in an early stage, the Tender documentation is not under the
tender documents as appropriate, and preparation yet.
screen potential contractors’ capacity to For the proposed Project it will be necessary to work with contractors. Thus, it will be very important to assure that all the
meet the requirements social and environmental requirements are respected by all contractors. The requirements and standards that the Contrac-
contractually requiring contractors to apply tor needs to fulfil (including HSE and social requirements) needs to be included in the Contract documentation.
these standards and include appropriate
non-compliance remedies Compliance to be achieved via ESAP.
ensuring that contractors have knowledge
and skills to perform their project tasks in
accordance with the PRs and ESAP re-
quirements
monitoring contractor compliance with the
above requirements
in the case of sub-contracting, requiring
contractors to have similar arrangements
with their subcontractors.
Table 2 Review of the Project against PR2 - Labour and Working Conditions
Requirement of EBRD PR2 Compliance Status (HR)
Working Relationships
Child Labour
PR2.8: The client will comply with all relevant na- COMPLIANT
tional laws provisions related to the employment
of minors. In any event, the client will not employ
children in a manner that is economically exploi- The provisions of the Labour Law are fully compliant with requirements related to employment of minors. Plumbing
tative, or is likely to be hazardous or to interfere school send minors as part of the field practice within the technical sector of the Company. Carrying of safety equip-
with the child’s education, or to be harmful to the ment is obligatory for the minors during their field visits. Their learning process consists of field work monitoring.
child’s health or physical, mental, spiritual, moral,
or social development. Young people below the
age of 18 years will not be employed in hazard-
ous work and all work of persons under the age
of 18 shall be subject to an appropriate risk as-
sessment.
Forced Labour
Workers organizations
The Company does not provide accommodation for workers for longer period of time. The company however has of an
emergency centre working 24 hours a day, and is in charge of monitoring the entire network via telemetry (a technolo-
gy that allows measurements to be made at a distance, via radio wave transmissions and reception of the information).
The centre is also equipped with alarms to indicate malfunction of the system. The centre is in good condition and
meets the basic needs of workers.
Retrenchment
Grievance Mechanism
Non-Employee Workers
Specific provisions to address Labour, OHS and grievance mechanism requirements shall be included in the Tender
documents and Contracts with contractors. Compliance to be achieved via ESAP.
Supply Chain
The BiH legislation strictly forbids use of child and forced labour and the procurement procedure requires full compli-
ance with the relevant laws.
Table 3. Review of the Project against PR3 – Pollution Prevention and Abatement
Requirement of EBRD PR3 Compliance status
General
Currently, wastewater management is not in compliance with existing environmental national and EU legislation.
Untreated water is discharged directly into Čajin Potok stream and Mutnica river (via wastewater collectors limited
only to the town centre). The main recipient of wastewater is of combined type, with a total length of about 8 000 m
and of inadequate dimensions, leading to insufficient functionality during rainy seasons. The major part of this recipi-
ent is old (pre war) and leaky, which leads to wastewater infiltration into the groundwater table, as well as infiltration
of external water. Other infrastructure (inspection manholes and cover plates) is also in bad shape with occurrences
of wall collapsing etc. Pipes are mostly made of concrete, although one minor part of these pipes is asbestos cement
which poses no immediate threat to health due to the nature of their use (wastewater drainage).
Only 400 m of the wastewater recipient has been constructed to meet engineering standards (during the reconstruc-
tion of the town centre in 2011).
Other parts of the municipality outside the town centre have no organized wastewater collection and/or treatment, but
use obsolete septic tanks which are not in compliance with national and EU standards. An estimated 32% of the
households do not have septic tanks, but discharge water directly into the nearest watercourses or fields. The Com-
pany has no control over septic tank maintenance.
The Company will achieve compliance by implementing specific measures concerning wastewater treatment which
will be outlined in detail in the ESAP. This will include regular maintenance and monitoring of all treatment systems
as well as regular water quality monitoring and reporting. It is expected that the Client will implement the ESAP in
accordance with the defined schedule, and with specifically assigned responsibilities for implementation, monitoring
requirements and reporting.
THE PROJECT:Priority investment programme (PIP) foresees the construction of the primary wastewater collector
and a wastewater treatment plant for a wider town centre to improve the current wastewater management in Cazin
Municipality. PIP also foresees the expansion of tertiary sewage network in the city centre.
All measures defined in the PIP, respectively will have to meet the national and EU standards. The project will be
designed to comply with relevant EU environmental requirements as well as with national legislation and operated in
accordance with these laws and regulations.
The Client shall implement the ESAP in accordance with the defined schedule, and with specifically assigned re-
sponsibilities for implementation, monitoring requirements and reporting.
Compliance to be achieved via ESAP.
Waste management;
Reinstatement;
Spill/Incident/Accident response;
Noise reduction;
Air emission reduction;
Monitoring.
These procedures should be jointly developed by the Cazin Municipality and the Company with external experts
assistance, if needed. Compliance to be achieved via ESAP.
PR3.11. The client will avoid the release of pollutants PARTIALLY COMPLIANT
or, when avoidance is not feasible, minimize or control
THE COMPANY:The Company is monitoring the energy and natural resources consumption. Energy consumption
their release.
significantly participates in Company’s operational costs. Due to the large number of pumping plants, electricity con-
The client should examine and incorporate in its op- sumption is one of the largest costs of operation activities. The share of energy consumption in 2010 amounted to
tions, energy efficiency measures and measures to over 20% in overall costs of core activities. However, there is currently no management plan to improve to maintain
conserve water and other resources, consistent with or improve the energy efficiency of the on-going water supply and wastewater treatment.
the principles of cleaner production.
There are major losses in water supply system, operational and administrative, totaling approx. 54%. There is an
internal written programme for (pipe) damage detection; however, it is not in use. The Company also has certain
damage detection equipment, which it received through a donation, but due to lack of an operating GIS system, it is
not in use. The Company has been planning to do a Study on loss reduction, but uncertain when.
The Company also plans to form their own water sampling laboratory, but due to lack of funds, uncertain when.
THE PROJECT:Implementation of the Project will ensure that current pollution due to lack of organized wastewater
treatment is minimized.
The Company will treat the pollution prevention and avoidance issues in the Projects’ tendering documents. Since
the project is still in an early stage the contracts are not yet under development. However, the Contractors must be
obliged to fully implement the provisions of contracts. ESAP and Pre EIA requirements under Contractors’ responsi-
bilities should be included in the tender package for future contracts.
The Company should monitor regularly the contractors in order to ensure that the contract provisions are fully imple-
mented.
Compliance to be achieved via ESAP.
Wastes
PR.3.12 The client will avoid or minimize the genera- PARTIALLY COMPLIANT
tion of hazardous and non-hazardous waste materials
THE COMPANY: The Company generates small quantities of waste, mainly regular household refuse that accumu-
and reduce its harmfulness as far as practicable.
lates at the Company’s offices and recyclables – paper. All waste generated by the Company is collected and man-
Where waste generation cannot be avoided but has aged, in accordance with the agreement between the Company and the local solid waste company PUC “Čistoća” -
been minimized, the client will reuse, recycle or recov- legitimate enterprise licensed by the relevant regulatory agency. The waste is transported to the nearby landfill
er waste, or use it as source of energy; where waste (Vlaski Do). The landfill does not have a protective layer and leachate waters seep into the ground, however, these
cannot be recovered or reused; the client will treat, waters do not affect water quality of Project area.
destroy, and dispose of it in an environmentally sound
Currently, there is no waste separation at source, however the Company plans to adopt procedures concerning recy-
manner.
cling. Minor quantities of waste generated from pipeline maintenance (metal pipes) are sold as secondary raw mate-
If the generated waste is considered hazardous, the rials.
client will explore commercially reasonable alternatives
There is no sludge deriving from wastewater treatment plans due to the fact that there are no wastewater treatment
for its environmentally sound disposal considering the
plants.
limitations applicable to its trans boundary movement.
Even though parts of the water supply system are constructed from asbestos cement pipes, no major pipe replace-
When waste disposal is conducted by third parties, the
ment currently takes place or is planned in the near future, therefore, no asbestos wastes are generated by the
client will use contractors that are reputable and legiti-
Company.
mate enterprises licensed by the relevant regulatory
agencies. THE PROJECT:The management of waste originated from construction works is not adequately treated in the Pre
EIA. During the construction activities, solid materials (topsoil; sub soil tarmac; and concrete) will likely to be gener-
ated either as waste or for temporary storage pending their use for reinstatement. Top soil and sub soil that is then
re-used for reinstatement should be stored at suitable locations that do not result in nuisance to the general public.
Subsoil and other waste that needs to be disposed of could be used as cover or as reinstatement material at the
local landfill site. In addition, this subsoil could also be used for the reinstatement of other sites. In addition to inert
materials, a certain amount of biodegradable waste will also be a by-product of the project activities and should be
disposed of to the local landfill.
The Client should develop a Waste Management Plan for the Project, in order to ensure waste generation during
construction is minimized. The produced waste material needs to be recycled to the highest possible extent; if not
possible, the waste needs to be disposed in an adequate manner, in line with the requirements for particular type of
waste.
Compliance to be achieved via ESAP.
The client will avoid the manufacture, trade, and use of The Company requires its’ third party contractors, specifically those performing oil and chlorinator maintenance, to
hazardous substances and materials subject to inter- have valid certification in compliance with national laws.
national bans or phase outs due to their high toxicity to
Currently, the Company stores its sodium hypochlorite tanks in front of the Company’s premises, in the open. The
living organisms, environmental persistence, potential
Company has had two inspection visits in the past three years, with one written report on inadequate storage of
for bio accumulation, or potential for depletion of the
chlorine tanks and inadequate personnel for storing and distribution of the tanks. Chlorine gas used in Tahirovici well
ozone layer.
field is stored onsite at the pump station, in the area reserved for storage.
At the moment, there are no specific written procedures on chlorine management (internal guidebooks, etc.). How-
ever, the Company has a General Act on Maintaining, Use and Monitoring of Water Facilities and Response in Case
of Breakdown or Accident which lists chlorine as a toxic material and emphasises dangers of chlorine explosion.
General handling guidelines concerning protection, including usage of rubber gloves and protective masks, are also
given within this Act (taken from NIOSH – USA). However, a part of this Act that covers the response procedures in
case of overdosing, spill and fire hazards that is taken from NIOSH – USA, in English language and most likely in-
comprehensible to a certain number of employees.
The Company will have to develop detailed comprehensive instructions on chlorine handling, protection measures
and accidental spill reporting and procedures in case of accidental spills. Also, the Company needs to construct a
specialized storage for its sodium hypochlorite tanks in line with national and EU requirements.
THE PROJECT: The management of hazardous waste originated from construction works is not adequately treated
in the Pre EIA. The hazardous wastes associated with the project may include a wide variety of materials such as oil
contaminated material, solvents and similar. These materials should be segregated in appropriate, dedicated and
sealed containers placed under a roofed and protected area. Furthermore, hazardous waste should be, when feasi-
ble, re-used and/or recycled (i.e. recycling of waste oils) or handled and/or disposed of in properly engineered (e.g.
lined) landfills by licensed contractors.
Since the project is still in an early stage, the contracts are not yet under development. Requirements addressing
management of hazardous substances and materials shall be included in the contract documents.
Compliance to be achieved via ESAP.
Industrial production
PR 3.15 The client will put in place processes to en- NOT APPLICABLE
sure that all emissions and effluents and wastes are
inventoried and monitored on an on-going basis.
Ambient considerations
GHG Emissions
PR.3.17 – 3.18 The client will promote the reduction of NOT APPLICABLE
project-related greenhouse gas (GHG) emissions in a
manner appropriate to the nature and scale of project
operations and impacts.
The Company shall regularly maintain its machinery and vehicles in accordance with the national legislation.
Compliance to be achieved via ESAP.
Table 4 Review of the Project against PR4 – Community Health Safety and Security
Requirement of EBRD PR3 Compliance status
General Requirements
During the construction work, there is a possibility of safety risk situations. The potential impacts of the Project on communi-
ty health and safety are partially identified in the Pre EIA (noise pollution in the neighbourhood, dust from construction work
and increased traffic). Impacts not assessed in the Pre EIA will be evaluated in the Environmental and Social Review
Summary (ESRS) Report developed as part of this assignment.
The Company shall implement the ESAP in accordance with the defined schedule, and with specifically assigned responsi-
bilities for implementation, monitoring requirements and reporting.
Compliance to be achieved via ESAP.
PR4.9. The client will report on the risks, poten- NOT COMPLIANT
tial impacts and benefits of the project and im-
Treated in PR 10 and in the SEP.
plementation of any action plans on a regular
basis (for example, annually) to the EBRD and, The Company will provide all relevant information related to the Project to the public in line with the SEP.
as part of its reporting to stakeholders in ac-
cordance with PR 10, to the affected communi-
ties.
THE COMPANY:No specific procedures on construction site safety exist. However, the Company undertakes its own con-
struction work only on secondary networks (small scope of works) and it is usually completed within one day. When major
construction (primary networks) takes place (undertaken by a third party contractor), the Company is required to inform
police and road authorities, and they mark the construction site.
The Company is cooperating with local authorities in case hazards or incidents are occurring at community level (fires, etc.)
There is no special equipment available at community level for preventing any kind of health risk, except for the fire extin-
guishers.
THE PROJECT: The construction activities during Project implementation will temporary disrupt local traffic and pedestrian
movement. Advance warning on road closure should be given to the public and alternative passages for pedestrians and
traffic should be provided. Particular attention should be given to public safety by installing safety fences and warning signs
at all critical work areas.
The measures outlined by the ESRS developed as a part of this assignment should be further developed in details by the
Company and added to the Project tendering documents.
A Transportation Plan during construction activities for moving equipment on public roads and other forms of infrastructure
and including community safety measures should be developed. A Transportation Plan should be requested from the Con-
struction Contractor as part of the Tender Documentation.
Compliance to be achieved via ESAP.
The Company informs the public when major water shortages occur, or when large-scale pipe maintenance has to be un-
dertaken via radio, and online news portals. It also maintains its own web site with information on possible water shortages,
etc. No written procedures regarding public communication are in place.
THE PROJECT:Emergency preparedness and response plan for the overall Project activities are missing.
A specific Emergency Preparedness and Response Plan including responsibilities, procedures, communication, training,
and liaison with the local Authorities should be developed for both the Project (Contractor responsibility to be included in the
Tender documents) and the Corporate level (Company responsibility).
Compliance to be achieved via ESAP.
Table 5 Review of the Project against PR5 - Land Acquisition, Involuntary Resettlement and Economic Displacement
Requirement of EBRD PR5 Comments on Compliance Status (PIU, PR, CSR)
General requirements
COMPLIANT
PR5.1Project design
THE PROJECT: Feasible alternatives for sewage construction and the possible locations of wastewater treatment
The client will consider feasible alternative project
plant are considered by the project, taking into account economic feasibility and least impact on communities and
designs to avoid or at least minimize physical environment. The Project itself is designed to have a positive impact on the environment.
and/or economic displacement, while balancing
environmental, social, and financial costs and Temporary land acquisition and establishing the right to access (the right of way) within the trajectory of the sewage
line will be set in place during construction and later operation of the infrastructure. The Municipality has adopted
benefits.
the decision on public interest for the land acquisition purpose. Permanent land acquisition will be required at the
location of the treatment plan. However resettlement is not envisaged, and potential locations do not hold any
households. It is mainly agricultural land.
During the consultation process with the client during the feasibility study preparation several locations had been
considered for the WWTP location. The location on the left side of River Mutnica, next to the local road leading to
the settlement Mutnik is selected as the WWTP location due to the following conditions: The location meets the
needs in terms of size of land available;it is substantially isolated, two sides of the location are bounded with trees,
and one side and with the river Mutnica on the other; area is substantially neglected and unusable for agricultural
purposes, covered with low vegetation (e.g. shrubs), and it is of general consideration that the land owners will be
interested to sell the land under favourable conditions. The area covers substantially a lesser number of land plats
(17) in comparison to other areas under consideration for WWTP construction, and therefore it is expected that the
land acquisition will be easier and with lesser impacts.
2
The size of the available land for WWTP construction is 103 156 m . Negotiations regarding the settlements should
not pose substantial difficulties. Given the status of the land and its current use, no economic displacement is ex-
pected. Affected
THE CLIENT: Land acquisition for the public infrastructure projects, as well as project of public interest is the re-
sponsibility of the municipality. Acquisition is implemented based on the decision on public interest. The expropria-
tion is carried in accordance with the expropriation plan prepared by the Municipality, and in line with the Federation
of BiH Law on Expropriation. The offered compensation is based on the market value of the property, plus the
compensation for additional losses and occurred damage (e.g. crops, perennial plants etc.), or in case of the in-
complete expropriation the loss of value of the land is compensated (the incomplete acquisition can take place only
if the given land can be recovered to its initial use).The value of land is evaluated by the committee appointed by
the Municipality, or by the court certified evaluator for more complex cases. Most land is usually purchased through
sale-purchase amicable agreements. The owners can appeal to the court if not satisfied with the amount of com-
pensation. The experience of the Municipality is that they usually reach an amicable agreement with the owner,
with only few cases ended up in court in past several years. The court’s decision in favour of the owner contained
negligible difference between offered and court-ordered compensation.
Consultation
In addition, the consultation process for the project will be guided by the Stakeholder Engagement Plan (SEP).
Grievance mechanism
Displacement
PR5.12: The census will establish the status of the NOT APPLICABLE
displaced persons. Persons moving into the project
location after the cut-off date, such as opportunistic
squatters and recently arrived economic migrants are No displacement is envisaged by the project.
not entitled to compensation or other assistance.
Physical displacement
PR5.13: If people living in the project area must move NOT APPLICABLE
to another location, the client will: (i) offer displaced
persons choices among feasible resettlement options,
including adequate replacement housing or cash com- The Project does not envisage involuntary resettlement. In case such issues emerge, the client and the Municipality
pensation where appropriate; and (ii) provide relocation will be responsible for complying with PR5 requirements, including the preparation of a RAP.
assistance suited to the needs of each group of dis-
placed persons, with particular attention paid to the
needs of the poor and the vulnerable.
Economic displacement
PR6.15 Within defined criteria, legislation may permit de- NOT APPLICABLE
velopment in or adjacent to protected areas.
Avoiding Impacts
PR8.12: The client is responsible for locating and de- NOT APPLICABLE
signing a project so as to avoid significant damage to
cultural heritage. If potential impacts are identified at the
early stages of project development, preference should
be given to avoiding adverse impacts during the design
and site selection phases.
PR8.16: The client will ensure that provisions for man- PARTIALLY COMPLIANT
aging chance finds, defined as physical cultural heritage
encountered unexpectedly during project implementa-
tion, are in place. Such provisions shall include notifica- It is recommended to develop a “Chance Find Procedure” relevant to the excavation phase. The purpose of this
tion of relevant competent bodies of found objects or procedure is to provide for a set of instructions, and to assign responsibilities to identify, manage and communicate
sites; alerting project personnel to the possibility of in the event of a chance find of cultural/ archaeological significance, including restrictions/ modifications to the exe-
chance finds being discovered; and fencing-off the area cution of the site construction activities.
of finds to avoid any further disturbance or destruction.
The client will not disturb any chance finds until an as-
sessment by a designated and qualified specialist is
made and actions consistent with national legislation
and this PR are identified.
PR8.17-18: The client will consult with affected commu- NOT APPLICABLE
nities within the host country who use or have used the
cultural heritage.
Table 8 Review of Project against PR10 – Information Disclosure and Stakeholder Engagement
Requirement of EBRD PR10 (Information Disclosure
Comments on Compliance Status (PIU, PR, CSR)
and Stakeholder Engagement)
It is expected that the project will have mainly positive long-term impacts to the affected communities.
SEP will be prepared for the Project. The Client, with support of the Municipality, is in charge for implementing the
SEP.
Corporate Finance
Implement mitigation measures The Company needs to develop Sludge Man- Own resources Prior to commis- Company High
(The Municipality and the Company are hereinafter also referred to collectively as "Parties" and
separately as "Party.")
as follows:
INTRODUCTION
In accordance with applicable legislation, municipalities shall provide for implementation of com-
munal activities pertinent to production and delivery of water for drinking and other purposes,
wastewater and storm water treatment and removal as they concern the local interest, while re-
specting the standards set forth in the applicable regulations.
If municipalities assign tasks and responsibilities for these communal activities to a third party,
they shall sign a Public Service Agreement (referred to as “PSA”) for their area of service with an
undertaking which must have the legal property for the implementation of the assigned communal
activities.
b. To ensure that the Company manages to establish and maintain financial capacity in an appropri-
ate level that enables it to generate sufficient revenue to cover full costs in order to maintain and
operate facilities and equipment to provide adequate services to the population of the Municipality;
d. To ensure that the Company cooperates with the Municipality whilst designing the development
plans particularly where there is a plan to expand the service coverage with water and wastewater.
WHEREAS this PSA is intended to outline the rights and obligations of the Company related to
the operation of assets of the water system and sewerage network that serve the Municipality,
and to outline the rights and obligations of the Municipality in providing assistance to the Compa-
ny to achieve its objectives.
ARTICLE 1
DEFINITIONS
For purposes of this PSA, the following words and terms shall have the meaning as follows:
“Authority”; means the exclusive right, which the Municipality gives to the Company for providing
services of water and sewerage in the territory of the Municipality;
“Effective Date’’; means the date of entry into force of this PSA;
‘’Legal requirements’’; means all laws, bylaws, administrative instructions, orders, licenses, per-
mits, and regulations issued by the competent institutions that have jurisdiction on issue in ques-
tion;
‘’Duration’’; means the applicability of the term of this PSA;
"Wastewater Service" means the collection, treatment and discharge of wastewater;
"Water Services" means abstracting, treating and distributing water for human consumption and
operating the network and facilities used for this purpose;
“Communal Activities or Services” means Water and Wastewater Services
"Service Standards" means any applicable standard for water services and sewerage determined
in accordance with the applicable laws on activities of water and wastewater services providers;
"Service Fee" means any charge or fee which is used by the Company for billing water and
wastewater services;
"Service Area" means the municipalities in which the Company provides water and wastewater
services.
ARTICLE 2
EXCLUSIVE RIGHTS
2.1 Authorization
With this PSA the Municipality gives the authorization to the Company, under which the Company
has the exclusive right during the term of this PSA to provide water services and sewerage, pro-
vided that nothing in this PSA prohibit residents in the municipality to own and operate facilities
which serve to meet their personal needs for drinking water (self-supply);
b. Implementation of rules, regulations, instructions and decisions of the authorities that have powers
under the law in certain areas of Company activities including the determination of cost-reflective
tariffs;
c. Raising awareness on the importance of public services and orientation in providing services un-
der this PSA;
e. Making cost-effective decisions on needed investments in water supply and wastewater systems in
order to preserve the existing base of assets and their expansion;
g. The sound implementation of the Financial and Operational Performance Improvement Pro-
gramme (FOPIP) dated August 2012.
a. Operate its facilities and equipment they use to provide services in accordance with best practice
for public services. The Company should provide safe, adequate and high quality services without
discrimination in any aspect, and also make improvements, extensions and capacity building in
line with customer growth as needed;
b. Make all necessary efforts to create opportunities for providing safe and consistent services for all
customers in accordance with the situation;
c. Provide services under this PSA effectively and efficiently in accordance with service and quality
standards set by national and other statutory bodies;
d. Define and implement written operational policies and procedures for providing services under this
PSA, including policies and procedures for action in emergency situations, resolving customer
complaints and queries and personnel matters. Such policies and procedures shall be in accord-
ance with the minimum requirements set out in laws, regulations and government policy where ap-
plicable;
e. Develop a capital investment programme taking advice from the municipality as far as the invest-
ments concerns its territory;
f. Propose tariffs for approval by the Municipality in accordance with applicable rules and methodol-
ogy
g. Take all necessary and reasonable measures, including the reduction or disconnection of services
to customers, when this is necessary to collect debts from customers;
h. Share regular reports with the Municipality on financial issues, operational and service quality in
accordance with the obligations established by law, and make them public for customers too as
deemed adequate;
i. Inform the Municipality on the Company activities in the form and frequency as the “Parties” agree.
j. Take all necessary decisions and actions in accordance with applicable laws that are necessary to
fulfill the obligations of this PSA;
k. In cooperation with the Municipality take all necessary measures to reduce water losses due to il-
legal connections, misuse of the water, etc.;
l. Ensure regular billing of all customers registered in the billing and accounting system;
n. Work towards increasing the number of the population supplied with drinking water and
wastewater services throughout the Municipality area and to coordinate infrastructure development
with wider Municipal development plans;
o. Cooperate with the Municipality to disseminate information, create awareness and educate the
community on all aspects of water supply and wastewater, including health and hygiene aspects
and water resource management.
The Company obligations under this PSA are considered to be met, provided that:
ii. Any law, national or local regulation, ordinance or resolution is not adopted that would make it im-
possible to legally fulfill its obligations under this PSA.
a. Pay on time the bills received from the Company for the provided services to Municipality or from
other institutions that are financed from its budget;
c. Provide twice a year the relevant information to the Company for planning, development and ex-
pansion of the Municipality in order that the Company can review the information and take account
of it in its planned capital investment and operations;
d. Review and advise on Company capital investments programs if they occur on the territory of the
Municipality in order to achieve coordination with the municipal planning objectives;
e. Assist and support the Company with all appropriate means in undertaking the necessary
measures to increase collection from customers for services provided in compliance with applica-
ble laws;
f. Collaborate with Company in all necessary and appropriate forms to enable Company meeting its
obligations under this PSA;
g. Nominate members to the supervisory board and other committees (e.g. company assembly);
h. Take all necessary decisions and actions in accordance with applicable laws that are needed to
fulfill the obligations of this PSA;
i. Support the Company to reduce losses (illegal connections, misuse of the water etc.);
j. Take formal action with those customers who do not comply with municipal regulations and Com-
pany bylaws;
k. Cooperate with the Company to disseminate information, create awareness and educate the
community on all aspects of water and wastewater services and, including health and hygiene as-
pects and water resource management;
l. Cooperate with the Company and competent water agencies in problem solving initiatives where
required;
m. Where possible, align resources in terms of information sharing, funding and expertise;
o. Jointly make input and influence regional and national policy legislation and frameworks;
q. Ensure that before any new developments are given planning approval the Municipality takes into
account the ability of the water system to provide sufficient quantity of water, and ensures that the
sewerage system is of adequate size to dispose of waste water.
Municipal obligations under this PSA are considered to be met, provided that:
ii. any law, national or local regulation, ordinance or resolution is not adopted that would make it im-
possible to legally fulfill its obligations under this PSA.
ARTICLE 3
IMPLEMENTATION OF COMMUNAL ACTIVITIES AND OTHER COMMERCIAL WORKS
3.1 Core and Sideline Activities
The Company is registered to implement tasks that could be categorized as core activity tasks
and sideline activity tasks.
Core activity tasks include tasks aimed at implementation of communal activities (Water and
Wastewater Services).
Sideline activity tasks include tasks aimed at implementation of construction and other works as a
commercial activity.
Parties to the Agreement agree to assume the responsibility for undertaking all measures in order
to fully separate core activity and sideline activity tasks. Sideline activity tasks shall be reduced
and cancelled in the long term.
ARTICLE 4
FINANCING OF COMMUNAL ACTIVITIES
4.1 Individual Communal Consumption
Individual communal consumption activities shall be financed from communal service fees exclu-
sively.
Communal service fees shall secure funds for covering total expenditures of the service provider
generated by water production and delivery as well as by wastewater treatment and removal.
Communal service fee shall secure secondarily funds for improving the existing communal facili-
ties and devices.
ARTICLE 5
TARIFFS
5.1 Price Structuring Elements
Structuring elements of the tariffs are as follows:
1. Type, extent and quality of communal services as defined by standards and regulations set forth
by relevant municipal, cantonal or national bodies upon opinion obtained previously from the Com-
pany;
2. Value of resources to be engaged in providing communal services as planned and programmed by
the Company;
3. Extent and quality of works to be invested in providing communal services as elaborated by the
Company;
4. Amount of material costs planned for providing communal services in line with standards and regu-
lations for use of electricity, material and other costs and planning calculations as elaborated by
the Company in collaboration with relevant institutions dealing with electricity production, etc.;
5. Other elements depending on market conditions and specificities of a particular service.
ARTICLE 6
SUBSIDING COST OF COMMUNAL SERVICES FOR SPECIFIC CATEGORIES OF USERS
6.1 Obligations of the Municipality
In order to ensure accessibility to communal services and as well as to assist in covering costs
for individual communal consumption for the poorest categories of the population, the Municipali-
ty shall subsidize these costs.
Categories of the population referred to in the previous paragraph, competency, criteria and sub-
sidy procedures shall be regulated by a separate decision endorsed by Cazin Municipal Council.
Funds for the subsidy shall be ensured in Cazin municipal budget.
ARTICLE 7
FACILITIES
7.1 Right to Use Public Property
For purposes of this SA and during the term of this SA, the RWC is given the right to use the
space over, under, along or in public buildings, bridges and other public property including
streets, sidewalks, highways and green spaces located within the territory of the municipality with
purpose of construction and maintenance of underground pipes, manholes and other similar ob-
jects that may be necessary and appropriate to provide services under this SA (referred to as”
Right of Use of Public Property”).
7.2 Use of the Right on Public Property
The RWC is authorized and has the right to use public property under this SA, provided that pub-
lic safety and health restrictions are respected as set by law and regulations of the Municipality.
Also, during the term of this SA, RWC should in cooperation with municipal authorities and in ac-
cordance with applicable laws and regulations to carry out all excavations in streets, sidewalks,
highways and public area at the time and due form with as few barriers to public use of public
property in the most appropriate circumstances. After excavation, RWC should make maximum
efforts for the return of that public property in the state that had been before undertaking excava-
tion.
ARTICLE 8
LEGAL REQUIREMENTS AND SUPPORT FROM THE MUNICIPALITY
8.1 Legal requirements
Municipality shall not cause or support: any change in any legal requirement within the scope and
competence of the Municipality after the date of this PSA that would violate the rights and obliga-
tions of the “Parties’’ under this PSA.
ARTICLE 9
TERMINATION OF SERVICE TO MUNICIPALITY
The Company will terminate its services to the municipality and its departments, if the bills are not
paid within the time prescribed in accordance with law.
ARTICLE 10
NON-FULFILLMENT OF OBLIGATIONS AND PENALTIES
Each of the following cases would be considered as “Non-Fulfillment of Obligation” from either
“Party”:
(a) If a Party (“Non- Fulfillment Party") fails to meet any of the provisions of this PSA or any provision
of laws, regulations or orders applicable, and continues to fail to meet obligations of this PSA and
such failure lasts for a period of sixty (60) days continuously, except if the Non-Fulfillment Party
has begun actions for recovery of that failure within period of sixty (60) days and is committed to
recover that failure.
(b) If Non- Fulfillment Party fails three (3) times within a period of six (6) months (regardless of at-
tempts to recover failures) to comply with any provision of this PSA after notice by a competent in-
stitution or the other “Party”.
ARTICLE 11
SEPARATION OF PROVISIONS
All provisions of this PSA are unique and separate, and if any of these provisions is deemed un-
lawful, void or unenforceable, the same shall not affect the validity, legality or enforceability of
other provisions.
ARTICLE 12
DISPUTE RESOLUTION
In case of disputes, contradictions or complaints that may arise out of or in connection with this
PSA, the “Parties” will make efforts to resolve disputes in a friendly way.
ARTICLE 13
DURATION
This PSA is effective on the Effective Date and for the initial period of four (4) years from the date
of entry into force ("Initial Term"). After the expiration of the Initial Term, the PSA is automatically
renewed every four (4) years, unless one ‘’Party’’ notifies the other “Party’’ in writing that it has
decided not to continue the PSA. Notice in this case must be made at least one (1) year before
the end of the term of expiration of this PSA
ARTICLE 14
MODIFICATION OF AGREEMENT
Modification of this Agreement may only be made in writing and signed by both “Parties’’.
ARTICLE 15
SUPERVISORY COMMISSION
Parties to the Agreement agree to form a joint commission to supervise the implementation, im-
provement and monitoring of the Agreement composed of two representatives of each Party.
Parties to the Agreement agree that the joint commission shall review all issues relating to the
implementation of the Agreement and shall be authorized to put forward its observations and
proposals in that regard.
The commission shall have a president and its deputy and shall adopt a rulebook to regulate its
work and other issues.
_____________________________
Mayor
______________________________
Managing Director
COMPARATIVE OVERVIEW OF MOST SIGNIFICANT (EXISTING) INPUT DATA REQUIRED FOR DEVELOPMENT OF A SURVEY FOR COLLECTION AND TREATMENT OF WASTEWATER
CAZIN
Data from municipality of Cazin for 2012: 1991. 1996. 1999. 2000. 20 1. 2002. (in 2002) = 16.600 inhabitants
62.468 Inhabitants Inhabitants 63.409 55.085 59.473 59.910 60.122 60.387
Difference -8.324 -3.9 6 -3.499 -3.287 -3.027 Among other things, spatial plan data of the
(Source of data - Federacija u brojkama / Federation in numbers) % in com-
69.560 stanovnika * Cazin municipality are provided
parison with 100% 86,87 93,79 94,48 94,82
(Source– Local communities) 1991
Population indicators stated in the tables show discrepancies especially in the last six years,
due to which the results are questionable, therefore it is necessary to develop aDemographic
* Difference in approx 7.000 inhabitants is related to the diaspora! analysis of population growth of the Municipality, which would be based on thelist of (local)
population, given the many circumstances which question this assessment because it is not
Number of local communities: 23 based on accurate, reliable data, but on the population assessment made by the Federal Bu-
reau of Statistics.
Number of inhabitants by local communities:
Majetići: 1.526 Ostrožac: 3.045 Skokovi: 4.100 Gnjilavac: 2.412 According to data presented by the authorities of the municipality:
Pjanići: 1.500 Prošići: 1.015 Miostrah: 1.550 Stijena: 8.000 - about 7,000 citizens and members of their household is temporarily
Čizmići: 646 Ćoralići: 4.540 Šturlić: 4.000 Krivaja: 1.005 working abroad,
Polje: 1.726 Liskovac: 3.990 Vrelo: 1.250 Slatina: 1.105 - in 1996, 56.051 people lived in the municipality; there were 1.086 im-
Mutnik: 2.786 Pećigrad: 3.290 D. Koprivna: 1.730 migrants
Ljubijankići: 800 Cazin: 10.795 - in 1999 there were 58.728 people living in the municipality; 330 immi-
G. Koprivna: 2.500 Tržačka Raštela: 6.249 grants.
DEMOGRAPHY
5. Ostrožac 5319 6440 7430 0.66
6. Pećigrad 7631 8700 9523 0.45
7. Pjanići 5320 6390 7363 0.63
8 Stijena 10053 12165 14131 0.66
9. Šturlić 3815 4580 5280 0.63
10. Tržac 3657 4280 480 0. 4
11 Tržačka Raštela 2256 2715 3128 0.64
Σ 63406 77570 88864 0.66
WATER SUPPLY
Water production Hydro-technical studies on water Data for 1999 (Municipality of Cazin):
and consumption The annual supply of water for each source: supply and sewage disposal were
made for the Spatial Plan of the The total volume of water: Q = 4,009,668 m3/year or qav. = 127 l / sec.
Tahiro- Pajića
municipality of Cazin in 1984, it
Source Vignjevići Stovrela Mutnik determined the manner of supply Out of the total volume of water the following is consumed:
vići potok
2004 3.206.223 245.022 1.344.278 877.814 229.450 of the city and the municipal are-
2005 3.325.219 273.361 1.450.626 998.185 179.679 as with sufficient water for 90.760 Households: Q = 962 320 m3/year or qav. = 30.5 l / s
inhabitants, the estimated number
Water consumption in 2035. (urban area): of inhabitants in the municipal Economy and Public Consumption: Q = 64 154 m3/year or qav.= 20.3 l / s
Qtot.= 270 l/inh/d* area for the first years of XXI cen-
tury. Losses: Q = 2,405,801 m3/year, or qav. = 76.3 l / s
The specific consumption project-
Water consumption in 2035 (interurban area): ed then is as follows: Water system losses amounted to 60%.
Qtot. = 250 l/inh/d* - for the urban area of Cazin =
205 l/s According to the above data, the number of inhabitants in the town of Cazin was 12,000., and the total
- for ten spatial units = 208 l/s population (the town of Cazin plus the surrounding villages) which were supplied with water from the
water system amounted to 30,000 inhabitants.
Maximum consumption was cal-
culated using about 663 l/s Gross specific consumption of water in 1999 amounted to:
(households, industry, public insti- q brutto specif. = 366.2 l / s, where:
tutions, losses)
The specific water consumption of the population was: qspecif.inh = 87,9 l/inh/d
*Data from „Specific water consumption” table (grey cells) The specific water consumption of the economy was: qspecif.ind = 58,6 l/inh/d
The water loss from the water system was: qloss = 219.7 l / inh / d
Inconsistency co- The adopted inconsistency coefficients (urban area): Inconsistency coefficients - 2000:
efficient Daily water consumption inconsistency coefficient: Kd = 1.50
kd = 1,4 No data! Hourly water consumption inconsistency coefficient: Kh = 1.60
kh = 1,57
kt = 2,5 Inconsistency coefficients - 2012:
Daily water consumption inconsistency coefficient: Kd = 1.50
The adopted inconsistency coefficients (interurban area): Hourly water consumption inconsistency coefficient: Kh = 1.50
DEMOGRAPHY
Specific water Water demand is based on the values of specific water consumption planned forthe year 2000 for mu-
consumption Specific consumption of the population of urban areas:
Water consumption according to nicipal centers in FBiH (Una-Sana Canton) in "Long-term water supply plan."
Type of consumption 2010 2020 2035
data from 1982:
q specif. households 190 200 210
Specific consumption for households:
q specif. economy, inst. consump-
tion
40 50 60 Qspecif = 93 l/c/day Qav.d = 180 l / inh/ day
q specif. losses 70 70 60 Qmax = 123,1 l/c/day
q specif. total 300 320 330 Qav. =103,6 l/c/day Specific consumption for small business:
qav.ind.= 30 l / inh / day
Specific consumption of the population of interurban areas:
Type of consumption 2010 2020 2035 Planned water losses from the water system;
q specif. households 180 190 200 q av.losses = 80 l/inh/day
q specif. economy, inst. con-
30 40 50
sumption Total value of specific water consumption per capita:
q specif. losses 50 50 50 qspecif.=qspecif.d+qspecif.ind.+qspecif.losses = 180+30+80 = 290 l/inh/day
q specif. total 260 280 300
The amount of water required for the population per day:
Qd=16.600 inh x 0,290 m3/inh/d=4.814 m3/day,
respectively:
qav.d=4.814.000 l/day: 86.400 s/day=55,72 l/s
The required amount of drinking water until half of the planning period for the year 2012
The specific consumption of water for household needs: q specif.d = 190 l / c / day
The specific water consumption for small business: q specif.ind = 40 l / c / day
Planned water losses from water supply system: q specif.losses = 70 l / c / day
DEMOGRAPHY
respectively: qmax.h=qmax.d x Kh=105,63 x 1,50=158,44 l/sec
It is estimated that by the year 2012 about 50% of pre-industrial capacity shall be carried out or recon-
structed, with the required amount of water corresponding to one half of the pre-war amount, that is.;
Qd=1850 m3/day, respectively: qav.d=21,50 l/s
Qmax.d=2775 m3/day, respectively: qmax.d=32 l/s
Qmax.h=173 m3/h respectively: qmax.h=48 l/s
DEMOGRAPHY
The performed analyses show that in the year 2022 there will be necessary more than double (2.09
times) the amount of water compared to the amount consumed now in the covered urban area of Cazin.
Water consump- Significant industrial capacities that had existed in the pre-war period are now out of operation except
tion by industry Projected consumption by the industry is in the table above! No data! for:
- fashion knitwear "Cazinka" (water consumption: 500-600 m3/day)
- Brickyard (water consumption: 500-600 m3/day)
- IGM - Building materials industry (water consumption: about 1500 m3/day)
Total water consumption above mentioned industy is approx. Qtot = 28 l/s
SANITARY WATER DRAINGE
Population and Population connected to sewerage / waste water production: It has been determined that at the end of the planning period for 2022 the specific water consumption
wastewater quanti- In 2010 - 20,000 inh. / Qt = 4400 m3/day per capita shall amount to 320 l / capita / day. In this water volume are included water requirements for
DEMOGRAPHY
ties In 2020 - 30,000 inh. / Qt = 7,200 m3/day No data! households, public utilities sector, small business and water losses from the water system, which will at
In 2035 - 55 200 inh. / Qt = 14 155 m3/day the end of the planning period amount to 70 l / capita / day (22%).
Infiltration Based on the water losses in the system, it is estimated that the
infiltration is 15% which is a reasonable amount of underground No data! No data!
water infiltrated into the sewer system.
Average waste Based on previous, the new specific discharge of waste water from households (including the aforemen-
water flow per day In 2010 (20.000 inh.) tioned and other consumers) was adopted, which amounts to:
Qtsv = 4400 m3/day q specif. = 320-70 = 250 l / capita / day, respectively:
Q24sv = 183,3 m3/h = 50,9 l/s q av.d = 250 l / capita / day x 22 560 inh / 86 400 s = 65.28 l / s
In 2020 (30.000 inh) With the adopted daily and hourly water consumption inconsistency coefficients: Kd Kh = 1.40 and =
Qtsv = 7200 m3/day 1.50, the maximum hourly wastewater runoff from the entire urban area is:
Q24sv = 300 m3/h = 54,05 l/s
qmax.h.t = qav. dxKdxKh = 65.28 x1, 4x1, 5 = 137.1 l / s
In 2035 (55.200 inh.)
Qtsv = 14.155 m3/day Based on previous data, the calculation of maximum hourly runoff of wastewater from households in
Q24sv = 163,83 l/s both catchment areas (Una and Korana) was performed:
- Intermediate Una River Basin (over the sinkhole areas): q max.h.una = 245 ha x 0.12 l / s / ha = 29.4 l / s,
- Čajin potok Basin (river Korana): qmax.h.č.p. Qmax.h.t = - = qmax.h.una 137.1-29.4 = 107.7 l / s
Industrial Wastewater appears only in the part of the urban area located in the Čajin potok basin (river
Korana). For purpose of this study maximum hourly runoff of industrial wastewater adopted is:
The maximum hourly total waste water runoff (waste water from households and industry) for the entire
urban area is:
q max.h.t.č.p. = 137.1 + 74.9 = 212.0 l / s
Total projected population in the urban area at the end of the planning period for 2022 amounts
to 22.560 inhabitants.
DEMOGRAPHY
2 years 194,5 169,4 149,7 120,9 (l/s/ha): 59,7 75,2 102,0 128,4 219,4 292,0
3 years 222,6 193,9 171,4 138,4
Hydrological data on the intensity of high rainfall return period once in two years (1/2) for the calculation
of rainfall runoff in the urban area are as follows:
Duration of rain:
Rainfall intensities (l/s/ha)
5 min. 227,5
10 min. 194,5
15 min. 169,4
20 min. 149,7
30 min. 120,9
40 min. 100,9
50 min. 86,3
60 min. 75,2
120 min. 41,3
For the calculation n = 2 years, For sizing the channels for storm For sizing of storm water sewer, the rainfall intensity of return period once every two years and the dura-
of the amount of t = 15 minutes, water drainage from the settle- tion of 15 minutes was proposed:
rainfall, the rain q = 170 l/s/ha. ments and the factory areas, the
- rainfall recurrence intervals P = 2 years
with the following rainfall intensity to be used should
- rainfall duration T = 15 minutes
characteristics be about 160 l / s / ha (approxi- - the relevant intensity i = 170 l / s / ha
was adopted mately the precipitation which
occurs once every 2 years, 15 -
min. duration).
Runoff coefficient Urban areas Population density Runoff coef- The coefficient of runoff:
(inh/ha) ficient
No data! -Parks, green areas, cemeteries, undeveloped areas - 0,20-0,30
5-30 0,20
Residential 30-100 0,35 -Residential zones the wider urban area in the
100-200 0,55 function of population density - 0.35-0.65
Health and educational zone 0,35
Industrial zone 0,35
-Schools, hospitals, religious buildings, institutional buildings - 0.40- 0.70
Urban greenery 0,05 - 0,10 -Working zone - 0.70-0.80
-Narrow urban area from - 0.75-0.90
-The central city area, paved roads and squares - 0.80- 0.90