Politics & Laws

Keep Water out of the Political Debate!

Serbian water management needs support from Europe and water protection in the Danube Region relies on input from Serbia. The Kosovo crisis must be kept out of this

Serbia has a long tradition in the water sector, the beginnings of which date back more than two hundred years. Hydraulic engineering projects transformed large parts of the Vojvodina region (area north of Save and Danube) into fertile arable land, leading to a considerable boost in economic growth. In recent times, the country’s water management has gone through different developmental stages.

The most significant investments were made in the period between 1950 and 1980, resulting in a satisfactory water situation in large parts of Serbia. But then capital investments declined and caused a gradual deterioration. Over the past 15 years (since the break-up of Yugoslavia), less than 30 % of total funding went into the systematic maintenance of assets. Needless to say, this has negatively affected resource protection and the quality of services provided. What always had priority during those difficult times was public water supply.

Water is mainly abstracted from the groundwater resources and the large rivers (total abstraction incl. reservoirs: 6 m3/s). The overall capacity of groundwater resources is about 714 million m3 p.a., most of which is provided by alluvial resources (approximately 390 million m3 p.a.). To cover public and industry water demand, Serbia (excl. Kosovo and Metohija) derives about 500 million m3 from groundwater resources. The total amount of abstracted raw water (groundwater and surface water) amounts to 700 million m3 p.a. Serbia can therefore rely on sufficient resources for a safe water supply without any major conflicts of use.

At local level, water supply (and wastewater treatment) primarily falls under the competency of public utilities owned by the state. Various management tasks are delegated to the local authorities. In addition to their customer services, some of the public utilities seek to improve their revenues by taking on contracts in river rehabilitation, repair and maintenance of dikes as well as other works related to water management.

There are about 750 water supply companies in Serbia, which service about 1,000 communities. Nearly 80 % of all households are currently connected to the public water supply system. Daily per-capity water consumption ranges between 400 litres in urban areas and 250 litres in the less densely populated regions. About 45 percent actually go into public consumption, 25 percent are used by industry, and water conditioning and water loss account for the remaining 30 percent.

The quality of available raw water resources differs greatly. Water resources in the autonomous province of Vojvodina, for instance, are subject to negative influences from Romania, which is why the responsible authorities derive much hope from the implementation of the EU Water Framework Directive in their neighbouring country. While the Danube, Save and Morava rivers enter Serbia with quality class II and their water can therefore be used as drinking water after proper conditioning, the Tisa, Tamis and Begej rivers are so heavily polluted even before reaching the border that their water can at best be used in agriculture.

The direct abstraction of water from rivers (and admixture of water from other sources) for public water supply is, for example, being practised in Vin (Danube), Milanovac (Veliki Rzav), Valjevo (Gradac), Vranje (Banjska reka) and Vlasotince (Vlasina). The biggest national water supplier, the Belgrade Waterworks, derives about one third of the required raw water (approx. 3 m3/s) from the Sava river. This water is conditioned by means of polyelectrolytes, ozone and activated carbon and subsequently mixed with groundwater.

Especially rural areas often lack modern conditioning plants and have run-down piping systems, which causes frequent disruptions in water supply and distribution. The most important causes for these selfmade drinking water quality problems include:

  • excessive fertiliser discharge into watercourses,
  • heavy metal and hydrocarbon loading of entire river sections (hot spots found e.g. in Danube, Sava, Ibar and Timok rivers),
  • approx. 340 non-sanitary landfills with an annual leachate discharge of 900,000 m3,
  • increased nitrate concentrations,
  • pollution of water resources and sediments by industrial wastewater and sewage from diffuse sources, which are said to account for 50 percent of the water pollution.

Especially industrial wastewater and sewage discharge and treatment is still largely inadequate in Serbia. Only 46 % of all households (not including Kosovo and Metohija), and merely 28 % of households in Vojvodina, are connected to the public sewer system. In all 450 million m3 of wastewater are transported through the 7,000 km long sewer system, 1,100 km of which are sewer mains.

But where to? Only twenty communities in Serbia have access to a sewage treatment plant, corresponding to a population equivalent of one million for sewage treatment. Reliable data from other treatment plants in tourist areas are largely lacking. Serbia has more than 150 treatment plants for sewage and industrial wastewater, less than 20 % of which are said to operate efficiently. The main cause for this, also in new plants, is inadequate maintenance – a problem difficult to overcome due to financial restraints.

Operation and maintenance of public sewers and treatment plants is estimated to devour € 127 million annually; these expenses, similar to those in drinking water supply, cannot be financed through service fees alone. Since for one cubic meter of sewage only 0.1 RSD is charged (1 € = 82.315 RSD on average / exchange rate: March 2008), revenues from the whole country amount to merely € 1 million in this sector; this is far too little to draw a perceptible benefit for water protection!

What also contributes to this unsatisfactory situation are inadequacies in monitoring, lawmaking, allocation of duties, planning, calculation of tariffs and payment ethics as well as a lack of financing initiatives. The most important authority in Serbian water management is the Water Directorate of the Ministry of Agriculture, Forestry and Water Management (MAFW).

It suggests new initiatives, drafts new laws and adopts motions filed by the two statutory corporations, Serbian Waters (with two divisions and approx. 150 employees) south of the Save-Danube border and Vojvodina Waters (with approx. 400 employees) north of the border. Both are primarily responsible for the development, construction and maintenance of hydraulic engineering facilities including flood control, drainage and irrigation. Water supply and sanitation is in the hands of public companies run by the Ministry of State Administration and Local Self-governance.

The authority of the MAFW in this respect mainly covers the issuance of water management criteria and licences for water abstraction and discharge, but also the provision of funds for larger projects. As mentioned above, water supply and sanitation at local level is primarily a responsibility of the public utilities.

Also other institutions such as Serbia Forests (e.g. river basin management, erosion control) and Energy Management of Serbia (responsible for hydroelectric and thermal power plants) play a vital role in water management. The most active institutions at supervisory/ scientific level are the Hydro-meteorological Institute, the Institute for the Protection of Nature of Serbia, the Biological Institute Sinisa Stankovic and, last but not least, the internationally reputed Jaroslav Cerni Institute.

The key laws governing water supply and sanitation in Serbia are:

  • the Law on Public Services (Official Herald no. 42/92 and 71/94)
  • the Law on Public Utilities (Official Herald no. 16/97 and 42/98), by which local authorities are entitled to set up public service enterprises. Organisation and management of the latter is regulated by
  • the Law on Public Companies and Activities of Public Interest (compare Official Herald of the Republic of Serbia, no. 25/00). According to
  • the Law on Assets Owned by the Republic of Serbia (Official Herald no. 53/95, 3/96, 54/96 and 32/97), public utilities are legal entities and as such entitled to freely avail of all assets required for the provision of services. This shows that there is no clear delineation between the state and the local communities with respect to the ownership of public utilities and capital assets.
  • The Law on Environmental Protection (Official Herald no. 135/04) and other environmental laws mainly deal with water pollution.
  • The Water Law (Official Herald no. 46/91, 53/93, 67/93, 48/94 and 54/96) regulates the financing of all water services (with the exception of the utilities).

Every fiscal year, water service fees, water protection fees, irrigation fees, fees for water abstraction from rivers, water discharge fees, fees for use of water infrastructure and fees for the provision of additional services are set by the government. The Water Law also governs the budget of the Republic of Serbia, to the extent that allocations in support of public interests are concerned. The law relates to all surface water and groundwater bodies and is executed by the MAFW.

Current legislation does not clearly identify debt collection procedures, which leads to a substantial overall loss in total water revenues. Water use fees accrue to a large extent in connection with power plants and the bottling of mine ral water. Power plant operators moreover contribute 50 percent of all water protection fees. In either case, the public sector accounts for only a trifling share.

Based on the current tariff structure and management, the following generally valid conclusions can be drawn:

  • the levied fees are far below a realistic level and fail to meet the requirements envisaged by law;
  • such low fees can only be fully levied if an efficient collecting system is in place;
  • a reliable basis for adequate invoicing is often lacking; due to insufficient monitoring, a proper evaluation of the amount and quality of water is difficult.

Based on the current public (~ 19 RSD/m3) and industry (44 RSD/m3) water tariffs and the overall amount of water sold (~ 15.7 m3/s or 500 million m3 p.a.), total revenues (without Kosovo and Metohija) amount to € 182 million annually. Assuming an average levy rate of 70 percent, merely € 128 million p.a. are available for water utility operation and investments. The situation is less critical in the sector of water resource fees, which are charged for water services rendered.

Federal budget funds allocated to the water sector, too, are inadequate. In recent years, these at best accounted for 12 to 22 percent of the total revenues. Serbia has great plans in the water sector up its sleeve. Yet it still remains pretty unclear how, given the current financial restraints, new sewage treatment plants can be built, the sewer system restored, and drinking water quality and flood control improved. Serbia sets much hope on loans from domestic banks (to keep the risk of inflation to a minimum) and on bonds issued by the state or by municipalities (debentures).

Even privatisation proceeds may be reinvested. During the 1990s, water supply and sanitation projects were largely financed by the state (65 – 70 percent); 5 percent of funds came from Serbian private industry, 10 – 15 percent from international grants and 10 – 15 percent from foreign private companies.

As mentioned at the beginning, Serbia derives part of its raw water from several transboundary rivers. On the other hand, Serbian wastewater management is still too little developed to ensure that major impacts on its neighbouring countries can be avoided. In context with the need to rehabilitate water infrastructure, it is not surprising that Serbia has a strong interest in working together with other countries in the Danube Region – and vice versa.

This is illustrated by the fact that several Serbian waterworks are meanwhile members of the International Association of Water Supply Companies in the Danube Catchment Area (IAWD) and that the federal government of Serbia also collaborates with the International Commission for the Protection of the Danube River (ICPDR), of which it became a member in 2003.

At the start of the year 2008, Serbia took over the ICPDR Presidency. Serbia’s Environment Minister Sasa Dragin, who has been elected new ICPDR President for the term of one year, mainly seeks to support a rapid information exchange between the Danube riparian countries. This, he believes, is the only way to counteract any negative consequences resulting from accidents affecting the Danube and its tributaries or from flood hazards.

“Serbia also seeks to fully integrate non- EU states such as Bosnia & Herzegovina, Moldova and Ukraine in the work of ICPDR and do the best to introduce Montenegro – a country that is going to ratify the Danube Protection Convention this year – to ICPDR,” says the high-ranking politician. As far as his country is concerned, Dragin is confident that not least owing to the recent experiences drawn from ICPDR’s Joint Danube Survey 2, it will in future be easier to raise government funds especially for the financing of wastewater management.

The most important incentives for this gearup are the EU Water Framework Directive (which after the separation of Montenegro is now again under implementation), the amendment of the Water Law and joint collaboration on matters concerning the Danube River Basin Management Plan. The international dispute about Kosovo must not interfere with these efforts!
(Source: aqua press Int. 1/08)

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