Zagreb , 25 . 10 .200 6 .

1. Zagreb, 25.10.2006. WATER SUPPLY AND WASTEWATER MANAGEMENT IN CROATIA ISSUE AND CHALANGES STJEPAN GABRIC MSc SE IHE Delft 1996.

2. CROATIACountry …

3. CROATIA… and the water sector • Adequate water management is of key importance for economic development of Croatia. • It is needed to ensure safe supply of water for domestic consumption, industry and tourism. • Natural water bodies have to be protected from pollution from municipal and industrial wastewater, particularly the long Adriatic coastline. • Since much of continental Croatia is a flood plain, flood protection is essential for effective use of those areas. • Socio-economical and geographic context • Croatia consist of two distinctive hydrological regions: • - the Danube basin within the Black Sea catchment area • (60% of total area) • Mediterranean region, which includes the 1780 km-long Adriatic Sea coastline and 1185 offshore islands

4. Surface and groundwater resources • Croatia can be considered as water-abundant country. Its overall renewable resources amount to 14 900 m3 per capita, out of which 60% is generated within the country. • However, resources are unevenly distributed throughout the country. • The major water resource is surface water, which is found in 20 rivers, 26 natural or artificial lakes and the Adriatic Sea. The major water courses total 6 829 km. • There is a significant seasonal and annual variability in river runoff. In dry years, the annual runoff is less than 25% of the average year flow. The situation is more severe in the Adriatic basin. • Groundwater resources are significant and represent about 20% of all renewable resources. In Sava and Drava basins, groundwater can be found in water bearing layers in areas with alluvial formations. Situation is more complex in carst formations, which are predominant in Dalmatian, Littoral and Istrian basins. • Despite the water abundance there are quantity and quality problems at locations such as Adriatic islands, which have poor water resources.

5. Water quality • The quality of groundwater is generally considered good throughout the country. • Nitrate pollution has been reported in Istria during the period of fertilizer spreading.The situation is serious in the upper Drava aquifer, where nitrate concentrations are constantly reported higher than Croatian standards for drinking water. • In the case of surface water, the reduction of industrial activity and the drastic decline in the use of fertilizers and pesticides in agriculture, have considerable eased the pollution of water sources. • The reports on the state of the sea and its water quality, indicate that a considerable part of the Croatian portion of the Adriatic Sea is still oligotrophic and clean. • This is partly due to the fact that in the past decade there was a considerable decline in the industrial production in the Adriatic coastal region and in number of tourists, thus reducing the amount of urban pollution. • However, the ports of big cities and the industrial zones along the coast are often polluted by organic and inorganic substances of which petroleum hydrocarbons are the most noticeable pollutants.

6. Terrestrial Waters

7. WATER MANAGEMENTIN THE REPUBLIC OF CROATIA

8. NATIONAL WATER COUNCIL THE CROATIAN PARLIAMENT ECONOMIC COORDINATION GOVERNMENT OF THE REPUBLIC OF CROATIA STATE ADMINISTRATIVE ORGANIZATIONS MINISTRIES MINISTRY OF AGRICULTURE, FORESTRY AND WATER MANAGEMENT PUBLIC INSTITUTIONS AND COMMERCIAL COMPANIES OWNED BY THE REPUBLIC OF CROATIA HRVATSKE VODE • Organized water management in Croatia began in 1876 • Legislative framework : • The Water Act • Act on Financing Water Management • Other acts (Environmental Protection Act, Forests Act, Agricultural Land Act ...) • Decrees (regulations, standards, ...) • Institutional framework • The international framework is defined by: • The international position (UN – The Helsinki Convention...) • Appurtenance to the Black Sea Basin (The Danube Convention I and II, ...) • Appurtenance to the Mediterranean region (The Barcelona Convention,Adriatic-Ionic Initiative) • The process of Association to the EU

9. Water Legislation and Policies • Water management legal framework consists of two key laws, the Water Resources Management Act issued in 1995 and the Water Management Financing Act, as well as 36 regulations and secondary legislation. • The Water Resources Management Act (The Water Act). • it lays the institutional framework for water management activities, • regulates the legal status of water and its ownership; • assigns responsibilities to various levels of government, local authorities and legal subjects; • and establishes a water agency—the Croatian Waters company of `Hrvatske Vode` . • The Water Management Financing Act. • this Act regulates and assigns responsibilities for fundraising authorities for the financing of water management activities. • the principle that the beneficiaries of water management activities should pay in relation to the benefits received is the foundation of the Act.

10. Water Management Institutions • There are two government institutions that have direct responsibility for integrated water management in Croatia: • the Ministry of Agriculture, Forestry and Water management • the Croatian Waters company `Hrvatske Vode` • The Croatian Waters Company • It has overall responsibility for carrying out activities related to the management of national and local water sources. • It acts in close collaboration with local enterprises in the catchments areas and coordinates and finances the implementation of surface water quality program by authorized laboratories. • It performs public services and other tasks as defined in the water management plan and in accordance with the funds provided for such purposes. • The work of Croatian Waters company is supervised by Ministry of AFWM.

11. HRVATSKE VODE legal entity for water management For the purpose of water management, Croatian territory is divided into four hydrological basins, plus Zagreb Metropolitan Area : - Sava River Basin - Drava and Danube River Basin - Dalmatian Basin - Littoral and Istria Basin

12. Competences MINISTRY OF AGRICULTURE, FORESTRY AND WATER MANAGEMENT • Legislation • Inspection • Administrative procedures - complaints • Supervision of implementation of the Water Act • Supervision of implementation of the Act on Financing Water Management • Awarding certain concession rights STATE LEVEL integral competence HRVATSKE VODE • Implementation of the Water Act • Implementation of the Act on Financing Water Management • Implementation of water management plans • Implementation of maintenance plans for watercourses COUNTY • Enactment of Water protection plans • Enactment of the Decision on the amount of catchment water charge • Enactment of management plans for local waters • Issuing of certain permits • County inspection • Awarding of certain concession rights • Rights of shareholders of water supply companies REGIONAL LEVEL MINISTRIES • MINISTRY OF THE SEA, TOURISM, TRANSPORTATION AND DEVELOPMENT • MINISTRY OF ENVIRONMENTAL PROTECTION, PHYSICAL PLANNING AND CONSTRUCTION • MINISTRY OF HEALTH • MINISTRY OF FOREIGN AFFAIRS AND EUROPEAN INTEGRATION • .... STATE LEVEL partial competence CITIES AND MUNICIPALITIES • Regional and local water supply • Wastewater sewerage and treatment • Declaration of the general use of a water resource (recreation, amateur water sports, etc.) • Declaration of zones of sanitary protection of water sources • Implementation of the policy of wellfield protection LOCAL LEVEL

13. A CATCHMENT WATER CHARGE Financing of water management A – ORIGINAL INCOME B – STATE BUDGET C - OTHER B TRANSFER FOR CONSTRUCTION OF THE SYSTEM FOR PROTECTION FROM ADVERSE EFFECTS OF WATER ON STATE WATERS (WATER CHARGE) WATER USE CHARGE TRANSFER FOR CONSTRUCTION OF CAPITAL FACILITIES WATER PROTECTION CHARGE SAND AND GRAVEL EXCAVATION CHARGE TRANSFER FOR MAINTENANCE OF WATERCOURSES AND THE SYSTEM FOR PROTECTION FROM ADVERSE EFFECTS OF WATER C CO-FINANCING BY COUNTIES AND LOCAL AUTHORITIES DOMESTIC AND INTERNATIONAL LOANS, DONATIONS

14. Water management income(in the period 1991 – 2004)

15. WATER SUPPLY IN CROATIA WATER COVERAGE Public water supply systems • National water coverage level is 75%, comparably high if compared with other countries in the region • They are significant differences at a county level, as result of difference in level of development and economical situation ( from 31% in Bjelovar county to 95% in Istria, and 96 % in Zagreb county)

16.  • Large differences also exist at local (municipal) level, following pattern observed on county level, (differences in level of development, availability of water/groundwater resources, rural vs urban municipalities) • High level of coverage in large cities and more urban areas in general • Few regional water supply systems (Istria, NPKL) • Parts of Slavonia, Dalmatia and deep sea islands as specific problem

17. DELIVERED WATER QUANTITIES BETWEEN 1992. – 2000. Following the trend of of economical changes in the country Industrial consumption is declining but still remains dominant consumer category

18. SPECIFIC WATER CONSUMPTION •   National average at level of 159 l/per/day, which is in general at level of Western European countries • Specific consumption is different throughout the country, depending on the region and type of municipality. • It is general trend that water consumption is declining with increase of water price •    Higher consumption is registered in coastal region and in the Capital (data from continental part are influenced by use of water from private wells) CASE 1 – considering total quantity of water delivered from the public water supply system to industry and households CASE 2 – considering total quantity of water delivered from the public water supply system to households

19. WATER LOSSES  Average water losses are very high, 46% at national level  Water losses were gradually increasing trough the last decade (average increase rate is at level of 3 %)  Indication of insufficient maintenance and operational problems in almost all water supply companies

20. WATER SOURCES • Groundwater - Surface water ratio is 90% - 10% • Croatia has a large quantities of quality ground water (no need for treatment except chlorination). • However, resources are unevenly distributed throughout the country. • Significant quantity fluctuation particularly in karst region • Lower quality of surface waters ( result of pollution) • Water reservoirs are main source of surface water

21. WATER TREATMENT • All together there are 43 WTP in Croatia • Good quality of ground water - 90% of population is drinking untreated water (chlorination) • Exception is Istrian region where almost all water is treated (new Butoniga WTP, 1000 l/s) • Periodical problems with water quality in karst region (Jadro, Ombla), problems with high concentration of suspended solids (pilot plants in operation) • In continental part, majority of surface water is treated (bacteriological pollution, the worse situation is encountered in the Sava River basin) as well as part of ground waters(Fn, Mn).

22. WATER PRICES • Price is freely formed by the owner of SWC ( usually municipalities) • Result is large differences in water prices, from 0.36 – 1.7 EUR, at average 0.7 EUR • Water pollution fee (0.13 EUR) and water extraction fee (0.11 EUR) – income of `Croatian waters` • Highest prices are in the coastal region (Istria, Zadar) • Average price for industry is 1.1 EUR, which is 35-70% higher then for a households • Variation of prices is result of different conditions for water extraction, but more important of a different municipal policy • In significant number of municipalities water price is considered as social category, and is not providing full costs recovery – results: insufficient level of maintenance and high level of UFW

23. WATER COMPANIES • There are 120 registered WSC in Croatia, almost completely owned by one or more municipalities\towns • There is fragmatization of water services, resulting in low efficiency of service and high costs • There are only 10-12 larger water companies (large towns, regional systems), which can pull sufficient funds and institutional capacity for investment and upgrading of water/wastewater systems. Others dependant on help from Croatian Waters or Government directly • There are just few regional waster supply systems in existence (Istria, NPKL, ViK), since provision of services are divided by municipal borders • At present there is no involvement of private sector in water segment of municipal utility service (Zagreb WWTP BOT)

24. WATER SUPPLY RELATED ISSUES • Price of a water is not providing the full cost recovery. Water price has to cover all casts, including operation and maintenance. Social component of water supply service should be covered by direct subsidies to low income social group, and not overall low price of water. • Unrational use of existing water source as a result of water losses and lack of coordination among water companies, thus preventing improving of the productivity and financial performance of water and waste water utilities • There is a need to increase the present level of water coverage (at present there is still more than 1 mil people without water supply) • High water losses as result of unsatisfactory level of maintenance and operational problems in water companies, as result of financial constraints) It is necessary to find a way to increase the financial resources available for the sector, through improving the productivity and financial performance of water and waste water utilities. • Insufficient level of coordination exist between water supply companies/systems, there is a need for better planning and management on regional and national level.

25. Large number of small, local water supply systems without interconnections and possibility to transfer quantities of water in case of needs. Need for regional water management plan and integration of existing, and newly constructed water supply systems • Problems with provision of sufficient water quantity in tourist region during summer season (consumption ratio up to 1:10), which is coinciding with reduced summer capacity of coastal water sources • Use of water from hydro power plant accumulation in summer time is causing conflicts with energy sector

26. WASTEWATER MANAGEMENT IN CROATIA WASTEWATER COVERAGE RATE • National average of population connected to public wastewater system is 40% (significantly lower coverage level than in water supply sector) • The largest disproportion is in Dalmatia, where 81% of population is connected to water supply and only 31% to sewage system • Towns with pop > 10000 have significantly higher percentage (70-75%)

27. Looking at a number of communities with/without a sewage system • 77% of communities has no sewage system • Wastewaters not disposed in sewage system are mainly disposed in different kind of septic tanks • There are regional differences, with Istrian region being advanced (60% of communities with sewage systems)

28. TYPE OF SEWAGE SYSTEM • Domination of mixed (storm+septic) sewer system • Separated systems are present mainly in recently constructed systems • Separated system represent 75% of sewer systems used in coastal (carst) region • It is estimated that 80% are not watertight, which is resulting in intrusion of ground water (sea water in coastal region) in to a system • Unsatisfactory level of maintenance is resulting in operational problems and degradation of system

29. WASTEWATER TREATMENT PLANTS • Construction of the first WWT facilities started in late 60es and 70es, with majority of plant constructed in period between 1980.-1990. • During and immediately after the war there was a deterioration of existing plants and very little construction of a new units • Sector revitalized since 2000, with number of new plants in construction • At present 29% of all collected wastewaters is treated by any level of treatment

30. Only 12 % (+Zagreb WWTP) of population is connected to any form wastewater treatment facility (less than 5% to secondary level treatment) • Out of a total population connected to WWTF • 11% preliminary treatment • 51% mechanical treatment • 38% biological treatment • No tertiary treatment facilities • Croatian legal requirement: all WWTP must have Water Permit, defining effluent quality, quantity and number of control tests required yearly

31. Presently, there are 81 existing WWTP (out of which 34 are biological WWTP) • More than half (75%?) of existing units are not satisfying requirements defined by the Water Permit, or don’t have the Water Permit • More than 10 constructed plant are not in operation • Problems with operation and maintenance (number of plants were designed for operational conditions and loads different from existing) • Only few plants have any kind of sludge treatment (majority of biological units have drying beds for dewatering) • Problems with sludge disposal (very few regulated sanitary landfill presently exist in Croatia)

32. WASTEWATER RELATED ISSUES • Existing administrative measures are insufficient for protection of waters from pollution, there is a need for integral planning and better water management • Better monitoring and enforcement of legal requirements is needed, if there is willingness to improve situation in the sector • Development of strategy for rural areas, necessary to develop a model for construction and operation of WWTF in rural area • Large number of outdated WWTP, need for new, affordable technology • Industrial wastewater treatment remains at insufficient level • There is a need for better protection of coastal region and elimination of `black spots` • Creating conditions for full cost recovery of wastewater treatment expenses • Creation of national system for financing of construction of WWT facilities, together with introduction of transparent mechanism of Government support and development of sustainable financing mechanism

33. CONCLUSIONS AND SUGGESTED REFORMS Quality and coverage of wastewater/water services • Coverage and quality of water supply and wastewater services in Croatia ranks high compared to other countries in the region. In contrast to water supply, wastewater treatment is greatly deficient. • Less than 12 percent of all municipal wastewater receives any treatment and only 82 treatment plants are currently in operation. • The majority of these plants will need to be upgraded to meet EU environmental standards. Infrastructure development • In the near future, Croatia will have to invest large amounts of resources in this sector, torehabilitate existing systems, extend water services and to provide adequate treatment of all municipal wastewater. • Among the highest priorities is to improve wastewater treatment and disposal on the Adriatic coast and islands, where services are currently the most deficient and impede tourist development.

34. The likely consequence of not stepping up investments would jeopardize existing quality of service, constrain economic growth, and impede the country's prospects for EU accession. Water sector financing and financial sustainability of operations • Most of the new investment in recent years has been financed from municipal budgets and from Hrvatske Vode (HV), which are funded from a water use charge levied on water utilities. • Fiscal constraints, however, will not allow the government to fund the large investments that will be needed in the future, meaning that the sector must become progressively more self-financing and more efficient. • The great challenge will be to increase the financial resources available for the sector through a sustained effort in improving the productivity and financial performance of water and waste water utilities. • Need for establishment of efficient and transparent mechanisms to channel central government and external financial support. Strengthening the efficiency of utility management • In general efficiency indicators are weak when compared to performance of Western European utilities

35. (over-staffing, averaging 8 employees per 1,000 connections, against 1-2 EU). • Improving the productivity of water supply and waste water utilities by strengthening management and administrative systems, capacity building and reducing staff, would reduce administrative costs and increase investment capacity. • This effort should be based on a policy of full cost recovery of operation, maintenance and capital costs in the water supply side, and partial support for waste water treatment investments, where externalities may justify subsidies. Clarifying and streamlining present institutional and financing mechanisms • Utilities are dependent on municipal government for key areas of the utility business, particularly for tariff setting and investment selection. • Need for adjusting and clarifying the present regulatory framework that governs the relationship between utilities and municipal governments with a view of increasing utility autonomy and accountability. • The government should develop a transparent financing mechanism for addressing the important investment need of the sector, that can not be covered with self-financing and internally generated funds in small and medium water companies,

36. The World Bank activities in the water sector • The World Bank has played an important role in providing financial support, technical assistance, policy advice and analytical services to Croatia. • The Bank has supported 5 projects in this sector with total US$ 145 million (original commitment) and provided/administered a number of grants. • At present, in this sector, the Bank has two active projects, two projects have been completed and one project is in the pipeline; • Inland Waters project finance flood protection, water supply and sanitation in the Sava-Drava region (project in pipeline) • Municipal Environmental Infrastructure Project finance water supply and sanitation in the Split region • Coastal Cities Pollution Control Project, financing of wastewater facilities in selected coastal municipalities • Eastern Slavonia Reconstruction Project, finance flood protection and wastewater treatment in Eastern Slavonia, Baranja and Western Srijem (closed) • Istria Water Supply and Sewage project, financed construction of WWT plant in Butoniga (closed)

37. THE END