1. BH/FB&H EXPERIENCE IN SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF PREPARATION FOR THE EU MEMBERSHIP Vienna: May 12 and 13, 2016 Hazima Hadžović, Assistant to Minister in the Water Sector, Federal Ministry of Agriculture, Water Management and Forestry 2016 DW CONFERENCE: ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION”

2. 2016 DWC : “SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 Contents: Current status of Waste Water Collection and Treatment Sector in Federation B&H Status and activities in Water Supply and Sanitation Sector related to EU accession EU Funds Assistance (IPA) - existing and planned Plans for sector development (organisation, regulation, strengthening and building infrastructure) Affordability of services at current tariffs Expected sustainability challenges in managing new waste water systems 2

3. 2016 DWC : “SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 CURRENT STATUS OF THE SANITATION SECTOR – ORGANISATION AND REGULATIONS -Sanitation Sector (SS) as part of the Water Services Sector (WSS) – responsibility of 10 cantons 79 municipalities; -WSS is regulated by 10 cantonal laws on communal activities; -The law on communal activities at the FB&H level has not been enacted; -Line institutions are 10 Cantonal Ministries for Environement and Physical Planning in hierarchy with Federal Ministries of ET and PP and on B&H level with MoFTER B&H -Organisational scheme on next slide 3

4. 2016 DWC : “SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 CURRENT STATUS OF THE SANITATION SECTOR – ORGANISATIONAL SCHEME 4

5. 2016 DWC: ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 CURRENT STATUS OF THE SANITATION SECTOR – REGULATIONS AND PLANNING DOCUMENTS -SS and urban waste water identified as a significant pressure on the water >>> goals and measures have been set out to reduce the pressures; -The measures imply from the Law on Environment Protection, the Law on Water and Government Regulation on conditions for discharging waste water and other regulations; -Next slides show some indicators of curent status which imply the measures in the WSS: 5

6. 2016 DWC: ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 CURRENT STATUS OF THE SANITATION SECTOR – OBLIGATIONS FROM PLANNING DOCUMENTS BasinFBiHRSBD BiHBiH Sava River141856232 Adriatic Sea345 39 Total:175906271 Number of settlements with over 2,000 people in BiH 6

7. 2016 DWC: ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 CURRENT STATUS IN THE SECTOR OF WATER SERVICES – EXISTING INFRASTRUCTURE Indicator BiHFBiHRSBD BiH Mm 3 Water abstracted for public water-supply*282182972.8 Water provided to consumers*12162571.8 Out of which for households9350411.6 Non-revenue water161120401.0 Percentage of non-revenue water in the total water abstracted for public water-supply 57 %66 %41 %35 % Urban wastewater discharge8153262.3 Out of which treated urban wastewater3 %5 %0 % Use of industrial water – own sources18480104 Water abstracted for agriculture932469 Total water abstracted (2013)556286270 Total water demand (2021)6413203182.9 -Existing infrastructure of SS is not at the satisfactory level, indicators of status: 7

8. 2016 DWC: ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 CURRENT STATUS IN THE SECTOR OF WATER SERVICES - TARIFFS -The existing tariff is on average Euro 0,61/m3 and hardly covers or can’t cover operational costs of the system; -The decision on tariffs is the role of Municipal Councils; -No regulatory body for water services tariffs, regulations which determine the lowest water services price, no adopted methodology; -Insufficient cost recovery in water services – additional significant issue in RBM plans for Sava river; -In summary, the key water and sanitation sector challenges in B&H are: Establishing tariffs based on cost recovery principle, Increasing wastewater treatment coverage, Improving effectiveness and operational efficiency of utilities, Improving water quality and treatment of drinking water in rural areas; 8

9. 2016 DWC: ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 STATUS AND ACTIVITIES RELATED TO EU ACCESSION B&H obligated to harmonize its legislation with the EU Acquis and to implement EU integration requests; the environment sector and WSS have one of the bigest tasks; The requirements and principles of EU water directives into national legislation on water were transposed in the following % : 91% - Water Framework Directive, 2000/60/ EC; 71% - Urban Waste Water Directive, 91/271/ EEC; 30% - Drinking Water Directive, 98/83/EC; 30% - Groundwater Protection Directive 2006/118/EC; 70% - Flood Risks |Directive 2007/60/EC; 30% - Nitrates Directive 91/676/EEC. Assessment of transposition and harmonization is in process for other EU Directives: Monitoring of Waters Status; Environmental Quality Standards; Discharge of Dangerous Substances; Bathing Water Directive; Freshwater Fish Water Directive; The transposing percentages are increasing, however, effective application and implementation of the new legislation is not secured, which is still a major challenge; 9

10. 2016 DWC : ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 STATUS AND ACTIVITIES RELATED TO EU ACCESSION Prepared documents for Sava Watershed in B&H : Sava RBM plan in FB&H; Sava RBM plan in RS; Sava RBM plan in BD B&H, and Roof Report and program of measures for RBM plans for Sava Watershed in B&H ; Prepared documents for Adriatic Sea Watershed: Neretva with Trebišnjica RBM plan in FB&H; Trebišnjica RBM plan in RS; Roof Report with program of measures for the RBM plans for Adriatic Sea Watershed in B&H; Cetina and Krka RBM plan in FB&H; These RBM Plans and PoMs are related to the planning cycle 2015- 2021, adoption expected in 2016, but their implementation is a challenge for SS for the following reasons: 10

11. 2016 DWC: ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 STATUS AND ACTIVITIES RELATED TO EU ACCESSION DETERMINED STATUS OF WB AS REQUESTED BY THE EU No. of WBs Good statusModerate statusPoor status Bad status No. of WBsLength (km)No. of WBsLength (km)No. of WBsLength (km)No. of WBsLength (km) FBiH8021345.1513175.4110155.9536774.22 RS629100.63531,168.6600.000 BD BiH300.00367.4700.000 TOTAL:14530445.78691,411.5410155.9536774.22 Table: 1 Total status assessment of surface water bodies based on monitoring findings HMWBsAWBs NumberLength (km)NumberLength (km) FBiH23335.90649.69 RS51570.4821228.99 BD BiH5102.20315.23 Total:791,008.630293.9 Table: 2 Candidates for HMWBs and AWBs 11

12. 2016 DW CONFERENCE: ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 STATUS AND ACTIVITIES RELATED TO EU ACCESSION- STATUS OF WB AS REQUESTED BY THE EU HighGoodModeratePoorBadTotal No.. VT Lengthh (km) No.. VT Length (km) No.. VT Length (km) No.. VT Length (km) No.. VT Length (km) No. VT Length (km) FBiH132854.675783.279597.010157.92372.354.805334.747.45 RS00.003512,232.451251,676.68242 1,816.3 2 00.007185,725.43 BD BiH00.003 7.27 5 88.96 22214.2100.0030310.43 Total:132854.64293,022.922092,362.64274 2,188.4 3 2372.354.81.28110,783.31 12 Table: 3 Status of WB as requested by EU

13. 2016 DWC : ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 STATUS AND ACTIVITIES RELATED TO EU ACCESSION- STATUS OF WB AS REQUESTED BY THE EU Determineted Status of water bodies 13

14. 2016 DWC : ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 ASSISTANCE FROM EU FUNDS (IPA) – precondition for IPA funds and existing support A precondition to use IPA II funds for all sectors including Environment is adoption of sector strategy at the B&H level; B&H Environment Strategy and other documents for EU integration are prepared in draft version in 2014, but still awaiting adoption; Due to the non-fulfillment of the above precondition, since 2013 B&H environment sector has a limit for application and use of IPA II funds for co-financing projects; Other EU funds such as the WBIF, and bilateral donors as SIDA, also sets the same requirement to support SS projects; SIDA already canceled its funding for UWWT within the WATSAN FBiH and RS; 14

15. 2016 DWC: ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 ASSISTANCE FROM EU FUNDS (IPA) - PLANNED? The Plan of the FB&H WM Strategy, predicted that 40% of the EU funding and other IFIs will be for projects related to improvement of water services by 2022 (approximately EUR 450 million) Recent estimate is EUR 2.800 million ( 2.100 million for WW, and 700 million for DW) by 2035; To use this source of funding, it is necessary that: 1. Establishment of the DIS, decentralized management of EU Funds (basis for multi-annual programming) of IPA funds for projects in B&H; 2. Adoption of Environment Strategy at the B&H level and other accompanying documents; Planning for use of IPA funds for SS without these two conditions is not possible. What are the alternatives? FB&H Government is trying to find short-term solutions with the new loan to help municipalities with implementation of ongoing projects. 15

16. 2016 DWC: ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 PLANS FOR SECTOR DEVELOPEMET - ORGANISATION, REGULATION AND STRENGHTENING Improving the SS in the current circumstances should focus on strengthening the capacity of staff and operational efficiency of PUCs (benchmarking, asset management, reducing non-revenue water, training and licensing of staff, including management and municipal decision-makers), using positive examples of successful PUCs; Inclusion of B&H PUCs in the project activities of DWP-IWAD-WB and ORF/GIZ with funding from Austria, Germany and Swiss Gvts as way to improve water services; Indicative is greater interest for these activites of PUCs from B&H/FB&H than others SEE countries; Including municipalities with curent investment projects is a priority; 16

17. 2016 DWC: ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 PLANNES FOR SECTOR DEVELOPMENT - BUILDING OF INFRASTRUCTURE - SS infrastructure in FB&H is needed for 175 settlements with more then 2,000 people in the following order: a) Settlements over 10,000 ES (tertiary treatment) sensitive areas, b) Settlements over 15,000 ES (secondary treatment) c) Settlements w/ 10,000-15,000 ES (secondary treatment) d) Settlements w/ 2,000-10,000 ES, - Increasing share of public water supply in rural areas is urgent, in order to eliminate issues of water quality in the local PUCs and protect peoples health; - Part of these measures is being implemented through the ongoing projects (EIB WATSAN FB&H and RS, Project sewerage and WWTP in Bihac, WWTP Sarajevo, Mostar...;) 17

18. 2016 DWC: ”SUSTAINABLE WASTE WATER MANAGEMENT IN THE CONTEXT OF THE EU ACCESSION” Vienna, May 12 and 13, 2016 EXPECTED CHALLANGES – NEW TARIFFS NECESSARY SERVICE SUSTAINABILITY The need for building infrastructure is unquestionable, as is the need for the solution of two biggest challenges, as a precondition for service sustainability: - Tariffs increase for water services to households and - Harmonization of tariffs for households and industry! The possible solutions to the above challenges are the adoption by the FB&H Parliament: 1.The Law on communal activities at the FB&H level, which is a big challenge, as it requires agreement of all 10 cantons and/or 2.Amendment to the Law on Water prescribing the obligation of the FB&H Government or FMAWMF for the adoption of regulations on the lowest base price for WS, which is also a major challenge, because it requires positive opinion of all 10 cantons; 18

19. Thank you for your attention! Hazima Hadzovic, Assistant to Minister, FMoAWMF, FB&H Sarajevo, Bosnia and Herzegovina Phone: +387 33 72 66 51 E-mail: hazima.hadzovic@fmpvs.gov.ba www.fmpvs.gov.ba 19