Danube Water Conference, Vienna, May 2017 Public Service Contract (experience, lessons learned and good practices) Sandi Zulić Aquasan network in B&H Bosna i Hercegovina sandi.zulic@aquasanbih.ba Danube Water Conference, Vienna, May 2017

Public Service Contract (PSC): PUC‘s operational autonomy level The need to precisely define rights and obligations i.e. roles and responsibilities between a local governance unit (LGU), as a founder, and a public utility company (PUC), as a service provider. The term „public water services“ – The EU Water Framework Directive, Article 2, Paragraph 1, Point 38: "Water services" means all services which provide, for households, public institutions or any economic activity: (a) abstraction, impoundment, storage, treatment and distribution of surface water or groundwater, (b) waste-water collection and treatment facilities which subsequently discharge into surface water. Danube Water Conference, Vienna, May 2017

Process of development of Public Service Contract (PSC) Create awareness on a need to sign PSC (tariffs, assets, etc.) Achieve full understanding of LGUs and PUCs on a need to sign PSC Elaborate draft PSC (select appropriate consultant) Define time-bound business objectives to measure the performance of PUCs (service provider), where good work is rewarded and bad sanctioned. Define mechanisms to resolve conflicts, and mitigate risks. Danube Water Conference, Vienna, May 2017

Process of development of Public Service Contract (PSC) Include the obligation to sign PSCs in the existing regulation (or encourage signing through certain provisions in the regulations) Promote the draft PSC at all levels (LGU - municipal / city council, mayor and offices / departments, service users + higher levels of government) Conduct continuous monitoring of the results achieved through key performance indicators. Danube Water Conference, Vienna, May 2017

Public Service Contract (PSC) → Laws and by-laws referred to: Constitution Laws on: Administration Organization Local Self- Governance Public Companies Commercial Companies (Enterprises) 5. Law on Communal Affairs (Water Services) 6. Waters 7. Law on Environmental Protection Implementing regulations adopted in line with the laws referred to in the point 1-7 LGU decision on PUC foundation LGU decision on water supply LGU decision on wastewaters LGU decision on setting up a price of communal services PUC Statute Danube Water Conference, Vienna, May 2017

Public Service Contract (PSC): Content – key important elements Asset inventory, Responsibility for updating a full fixed asset book, Financing of infrastructure maintenance, Financing of capital investment, Tariff setting procedure / methodology (in line with key criteria), Link tariff with costs (support establishment of cost centre accounting) Responsibility of LGUs for providing subventions to socially vulnerable categories (including the implementation of periodic affordability inquiries), Responsibility of LGUs for paying out large debts of companies owned by LGUs, PUC recruitment policy (long term goal: #1/1000). Danube Water Conference, Vienna, May 2017

Public Service Contract (PSC): Annexes Attachments: Program (including procedure) for partial subvention of costs for water supply and wastewater removal services for socially vulnerable categories, Decision on payment of debts (unpaid due liabilities) of companies owned by LGU, Methodology for setting up a water supply and wastewater removal tariff, Decision on use of depreciation funds, List of selected key performance indicators and targets. Danube Water Conference, Vienna, May 2017

Public Service Contract (PSC): Achievements Bosnia and Herzegovina 11 LGUs and PUCs signed Public Service Contracts, Additional 8 LGUs and PUCs are in the process of signing PSC, Proposal to change the regulation to establish obligatory mechanisms for PSC. Danube Water Conference, Vienna, May 2017

Public Service Contract (PSC): Objectiv! Support development of PUC capacities and strengthening of its operational and financial performances in order to set up a well-operating, efficient and self-sustainable PUC and ensure sustainability of good and uninterrupted services to citizens. Danube Water Conference, Vienna, May 2017

Danube Water Conference, Vienna, May 2017 THE SERVICE USERS (THE CONSUMERS) (domestic & industrial) are benefiting of the Service To create golden triangle of partenrships to advance development! ADMINISTRATION OF THE TERRITORY Information Discussion SERVICE THE LOCAL AUTHORITY (THE COLLECTIVITY) organizes the service and sets the water tariff Provides the Service Billing & Information Assess GOOD GOVERNANCE PRINCIPLES & QUALITY OF SERVICES THE SERVICE PROVIDER (Public or Private) manages the Service Requests / Claims Payment Informs and Reports Tariffs, Steering Board, Directors The Local Authority The Service Provider The Service Users (Consumers) Requirements Monitoring ASSETS MANAGEMENT Danube Water Conference, Vienna, May 2017

Thank you for your attention! Sandi Zulić Aquasan network in B&H Bosna i Hercegovina sandi.zulic@aquasanbih.ba Danube Water Conference, Vienna, May 2017