1. the Heritage: intensive housing programs in the 60s and 70s the result: – over 350 000 new flats with appropriate water supply – over 85% of households connected into the public sewer network –traditional solution: direct wastewater discharge into the Danube – inhabitants: 1,8 mn + over 1 mn in suburb

2. changes after 90 ongoing design and devt plans since the 1959/61 Sewage Plan for Budapest; 91/271/EEC Directive, Sofia convention; from social service to polluter pay; operation privatization; introduction of the all-inclusive tariff (operation + maint. + depretiation + Capex + operators profits); increase of tariff from 0 to economic level; tensions: sustainable tariff level vs. necessary Capex to the City (loans); Central Govt normative subsidies

3. Finances base rule at the City: sectorial Capex must be covered by sectirial income (both water-supply and sewage, but not transport) bridge-financing: role of the IFIs due to the underdeveloped Hungarian financial market in the 90s; WB: EUR mn 27.7 loan + equal local resources; (incl. 30% Central Government subsidies, see resp. legislation) parts of an EIB-loan (EUR mn 20); subsidy from the EU: EUR 16 mn LSIF; submission of a Cohesion Fund application (cca. Mn EUR 160) on 31 March 2004 (see later)

4. the Facilities: North-Pest Treatment Plant built: 1979-86 140 000 m 3 /day capacity upgrade: 1998-2001 to 200 000 m 3 /day cap. ONLY BIOLOGICAL TREATMENT South-Pest Treatment Plant built: 1966, 30 000 m 3 /day capacity upgrade: 1998-2000 to 120 000 m 3 /day cap. TERTIARY TREATMENT INCLUDED

5. results and further tasks today: –46% of total wastewater treated bilogically, –22% tertiary treatment –Nitrogen load total: over 10 000 t/y discharge: cca. 4 000 t/y –Phosphorus load total: cca. 2 000 t/y discharge: cca. 900 t/y – 54% only mechanically treated direct discharge to Danube

6. North-Pest tertiary treatment Still not sensitive area, but relevant Hungarian regulation: –Phosphorus discharge max.: 2 mg/l, –Nitrogen discharge max.: 30 mg/l. the GEF project (WB implementation) –Preparatory phase: EIA, FS ready, preliminary water permit in hand co-financed already by GEF PDF Grant; –tendering: acc. to Yellow Book (technological option limited by permit only, Design-Build contract) –Cost breakdown: TPC (excl. of VAT):USD 21.7 mn, PDF grant:USD 6.5 mn Citys own funds:USD 15.2 mn (in this case no Central Govt participation in funding) To be completed by end 2006.