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Berat and Kucova water and sewerage company

From Municipal Cooperation

Berat and Kucova water and sewerage company
Service Areas: Water Management
Country: Albania
Municipalities: Berat Municipality, Vertop Commune, Otllak Commune, Kuçova Municipality, Perondi Commune, Kozarë Commune
Contact persons: Emiljano Zhuleku, Etleva Dhima, Fatmir Shehu
Legal form: Commercial company
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Coordinates: 40° 38' 52" N, 20° 5' 33" E
Photo 1 GP drinking water Berat Kucova 140509.jpg
Photo 2 GP drinking water Berat Kucova 140509.jpg
Photo 3 GP drinking water Berat Kucova 140509 .jpg

Description of the problem/need for IMC

Water supply and waste water collection and treatment are functions legally handed to the local government units since 2000 with the passing of the Law on functioning and organisation of local government in Albania.

Nevertheless, the transfer process has been and remains a complicated issue that includes: formal handing over of systems' ownership to local units from central government; defining the owner local unit/s for each supply network; defining and appointing local representation in the steering bodies of water and sewerage companies; providing for financing debts that ex-state owned companies have to the electricity provider (KESH); providing for major refurbishing of run down water supply systems throughout the network.

Kuçova and Berat, as throughout the country, lack a continuous drinking water supply and inherit an inefficient distribution system for water and sewerage. Water fees do not cover the present running cost, without mentioning coverage for the investment needed to upgrade existing networks. Municipalities need to get out of the vicious circle of not being able to provide good quality service and citizens not paying the water fees. In order to deliver the service as expected (continuous provision of drinking water within acceptable normative) investment is needed to upgrade the system, including here water metres and proper arrangements for dealing with sewerage and surface waters.

The IMC that joined water and sewerage enterprises of Berat and Kuçova, addressed the need to increase service quality and efficiency. It succeeded in obtaining investment funding to upgrade the water distribution and sewerage systems in both municipalities participating in the IMC, through a project funded by KFW. Cooperation aimed to meet the following detailed needs:

  • Provide drinking water supply for the city of Kuçova, from 'Bogova' spring, for the period when water supply from the source is adequate for both Berat and Kuçova.
  • Avoid provision of water supply through mechanical pumping for Kuçova city at least for the period when the spring is providing adequate water supply.
  • Deliver expert advice and implement a programme to reduce present water losses.
  • Acquire investment funding to: replace two km of pipes (φ 400) between pumping station Uznove to Reservoir Nr. 4, install 100 water meters for families, replace the big water meter (φ 80- φ 600) at the source and reservoirs in Berat city, and replace water pumps, install the big water meter for precisely measuring the yield in Kuçova City.

Description of the IMC practice

Merging of the two enterprises is considered a pioneering experience for the country that tries to 'regionalise water supply systems'. It extends the service coverage area to improve standards, attract investments and reduce service costs, subsequently reducing the service fee for consumers.

Each of the enterprises that was merged, had the municipalities as main shareholder (Berat had 75.6% of the shares in the Berat Enterprise and Kuçova had 61.8% of shares in the Kuçova Enterprise) and two communes each, holding the rest of the shares.

The joint water and sewerages enterprises of Berat and Kuçova (SH.A.) covers water supply as well as sewerage and surface waters collection, treatment and discharge for a total of around 146,000 inhabitants in both municipalities and surrounding participating communes.

The community of Berat has been involved in a project for the improvement of the water supply and management of sewerage, funded by the German Bank KFW, according to the agreement between the governments of Albania and Germany, a project that provided assistance for IMC set up.

The IMC provides services for city of Berat, which currently supplied by Bogova spring, under the mountain of Tomori, around 36 km in the east of the city, and now also for the municipality of Kuçova. A capacity of 600 litre/sec spring’s yield will be managed by the enterprise to also supply the city of Kuçova for 8 months, a period when there is maximum spring's yield. The number of consumers supplied with the potable water are:

BeratKuçova

  1. Family consumers: 14.0137.184
  2. Public sector’s consumers: 4216
  3. Private sector’s consumers_ 1.162398

This IMC arrangement was approved by the councils of each municipality and the process has also been supported by the Central Government. The new enterprise has its own shareholders assembly and supervisory council, with the representatives from both Municipalities Berat and Kuçova and the surrounding communes of Otllak, Vertop, Perondi and Kozarë. The representatives of shareholder local units participate in the assembly meeting with an opinion approved in respective municipal council for the items in the agenda. The members of the Supervising Council are nominated by the Shareholders Assembly according to the criteria and qualifications defined in the Guidelines (nr. 965 date 11.12.2007) of the Ministry of Economy Trade and Energy. The Supervisory Council of the Enterprises for Water Supply and Sewerages Berat and Kuçova is composed by five members and it also appoints the director.

The Enterprise is organised based on the specialists' recommendations, with a central office in Berat and two sectors, the Berat sector andtheKuçova Sector. Total number of employees is 271, out of which 178 employed for Berat sector and 93 for Kuçova sector.

Presently, the IMC is carrying out: the feasibility study for both cities; the expert services for implementation of the programme on reduction of water losses though which are invested 12,000 euro for Berat and 33,000 euro for Kuçova; investments to upgrade water and sewerage systems with a total value of 1.000,000 euro (finalised in June 2008). The cooperation succeeded in attracting the investment and upgrading the system to a standard that saves 30 litres/second of water, previously accounted as a loss due to illegal connections and misuse of water.

The Enterprise is working with self-financing and cost-recovery principles and based on these principles a business plan is formulated for the period 2008-2012. The way for Municipalities to finance the future activities of the enterprise still remain to be discussed and finalised.

Part of IMC's activities are also provision of information to the public and awareness campaigns through local media explaining problems that enterprise faces and action undertaken to eliminate water misuse and raise awareness for payments of water bills.

The Municipalities participating in the enterprise receive periodically information on economic and technical issues of the Enterprise and other relevant statistical information.

Establishment of the IMC practice

The Mayors of Berat and Kuçova municipalities were the ones that took the first step to initiate the cooperation, supported also by the Ministry of Public Works, Transport and Telecommunication and representatives of the German Bank for Development (KfW).

Initiatives from the Mayors were then confirmed by Municipal Councils approval of the 'Memorandum of Cooperation' for the joining of enterprises. Based on the memorandum an agreement was drafted where both parties agreed to establish this joint structure, to join the financial tools to increase performance and to advance the investments from both foreign and local investors in the sector. External legal expertise in preparing the terms of the agreement was acquired.

This initiative was supported and encouraged by KFW. Joining of enterprises was set as a condition to obtain a total loan of 6 646,795 euro in order to successfully upgrade the system.

The IMC practice has started its functioning and there are no obstacles to report in the cooperation until now. It is quite a recent one and therefore could be early to assess failures.

Apart from upgrading the water supply system, both Municipalities were interested and through this cooperation succeeded to raise funding for reconstruction of sewerage system including the water treatment plant. Sewerages water, interlinked with surface water drains, caused immense pollution to the river system running through the cities.

The main success factors are:

  • The cooperation climate between Municipalities of Berat and Kuçova has been good, therefore it supported the IMC practice for joint Enterprise on water supply and sewerage.
  • Expertise form the specialists provided through KfW helped this process since its start up.
  • Support from respective Municipal councils of both cities which approved this joint cooperation.
  • The support from the Central Government’s legal bodies.
  • Financial incentives that provided an opportunity for municipalities to improve service to citizens and reduce pollution discharges to the environment.

Benefits and shortcoming of the IMC practice

Benefits:

  • Major investment (1 mln Euro) was attracted to acquire investment funding for: replacing two km of pipes (φ 400) between pumping station Uznove to Reservoir Nr. 4, install 100 water meters for families, replace the big water meter (φ 80- φ 600) at the source and reservoirs in Berat city, and replace water pumps, install the big water meter for precisely measuring the yield in Kuçova City.
  • The cooperation succeeded in attracting the investment and upgrading the system to a standard that saves 30 litres/second of water, previously accounted as a loss due to illegal connections and misuse of water.
  • Increased hours of drinking water supply for both communities of Berat and Kuçova.
  • Reduced costs of drinking water provision for Kuçova municipality due to the new water supply system design that used free flow rather than mechanical flow.
  • Improved drinking water quality provided for the citizens of Kuçova, due to connection with one of the purest waster springs in the county (Bogova spring)) and upgrade of distribution system.
  • A total investment of 6 646,795 euro in order to successfully upgrade the water and sewerage system with purification and proper drainage was acquired.
  • Reduction of pollution discharge into the main river system flowing through the cities is expected, due to treatment of discharge waters.

Shortcomings:

  • Cooperation is quite a recent one yet to prove its week points.

Future plans for the development of the IMC practice

  • The present enterprise is undertaking activities to further improve the situation in the cities. These activities include:
    • Further investment, implementing the feasibility study, to guarantee continuous water supply for all the consumers.
    • Reconstruction of sewerages pipes, and overall system, presently 80% damaged.
  • The potential to join with the local units of Polican, Skrapar and Ura Vajgurore is considered and assessed.
  • Successful cooperation in water provision triggered present considerations to expand the IMC experiences in waste management. The municipalities and communes looking into such cooperation are Kuçova, Ura Vajgurore and Otllak. The potential IMC for waste management will seeks to benefit from a project regarding the purchase of joint equipments for waste management and the regional management plan for waste and landfill.

Main lessons learned on how to establish IMC and make it a success

There is potential to have similar cooperation initiatives in other cities. The Central Government can help with expertise both legal and financial to improve the IMC practices among the cities and communes. Also round tables and seminars can provide municipalities with forums to discuss about successful practices and share experiences.

The Albanian Association of Municipalities can provide the necessary information regarding possible donor / funding programmes that support IMC projects for the Municipalities and Communes. Information on donors' requests for qualifying for funding can be distributed by the associations to the municipalities and communes.

Readiness to support other municipalities to establish IMC

There is readiness to support the other municipalities through sharing experiences gained in the process, and providing information on possible and necessary information and documentations that other municipalities might need for establishing a successful IMC.

Acknowledgment

The information about this practice was collected and presented by Alba Dakoli Wilson.