water utility reform plan

1

Ministarstvo turizma i zaštite životne sredine Crne Gore

WATER UTILITY REFORM PLAN

2

Ministarstvo turizma i zaštite životne sredine Crne Gore

Utility company owns the assets Municipality owns the utility company Water supply and waste water treatment services-

commercial activity Full cost recovery based on the tariff structure Regulatory framework related to natural monopoly Government of Montenegro to facilitate capital investments Government of Montenegro to promote the regionalization

of services

PRINCIPLES OF THE SECTOR POLICIES

3

Ministarstvo turizma i zaštite životne sredine Crne Gore

ELEMENTS OF THE REFORM Decentralization and voluntary regionalization

Corporative management (independent Board, independent audit)

Commercialization (utilities-legal entities, commercial behavior)

Regulation of natural monopoly (establishing of the regulator) Capital financing (Government to facilitate the access to capital; local governance and

utilities to increase ability for taking and returning the loans)

4

Ministarstvo turizma i zaštite životne sredine Crne Gore

THE LAW ON WATER SUPPLY AND THE LAW ON WATER SUPPLY AND WASTE WATER TREATMENT WASTE WATER TREATMENT

5

Ministarstvo turizma i zaštite životne sredine Crne Gore

PRINCIPLES

• Quality• Quantity• Continuity• Sustainability and environmental protection • Corporative independence and commercial behavior• Transparency• Protection of the public interest

6

Ministarstvo turizma i zaštite životne sredine Crne Gore

UTILITY-ESTABLISHING

UTILITY FOR ONE MUNICIPALITY –LIMITED LIABILITY COMPANY

UTILITY FOR TWO OR MORE MUNICIPALITIES- LIMITED LIABILITY COMPANY/SHARE HOLDERS’ COMPANY

FOUNDER- MUNICIPALITY(IES)

7

Ministarstvo turizma i zaštite životne sredine Crne Gore

UTILITY– OWNERSHIP

• UTILITY IS THE OWENRSHIP OF MUNICIPALITY(IES) • ASSETS ARE THE OWNERSHIP OF THE UTILITY• UTILITY CANNOT TRANSFER THE ASSETS WITHOUT

APPROVAL OF THE MUNICIPALITY

8

Ministarstvo turizma i zaštite životne sredine Crne Gore

UTILITY– FUNCTIONS

• PROVIDING OF THE SERVICES (DIRECTLY OR INDIRECTLY)• ESTABLISHING THE PROCEDURES RELATED TO SERVICE

DELIVERY• MAINTENANCE OF THE SYSTEM • ALWAYS RESPONSIBLE TO MUNICIPALITY AND TO CITIZENS

(PROTECTING OF THE PUBLIC INTEREST)

9

Ministarstvo turizma i zaštite životne sredine Crne Gore

UTILITY– STRUCTURE

BOARD OF DIRECTORS

DIRECTOR

STAFF

10

Ministarstvo turizma i zaštite životne sredine Crne Gore

UTILITY-BOARD

NOMINATION-THE COUNCIL FOR THE PROTECTION AND DEVELOPMENT OF THE LOCAL GOVERNANCE

APPOINTING- MUNICIPAL ASSEMBLY

KEY TASKS:

- DEFINES THE POLICIES OF THE COMPANY- APPOINT THE DIRECTOR- DEFINES THE NUMBER OF THE STAFF- DECIDES ON ENGAGING THE OTHER COMPANY TO PROVIDE SERVICES

11

Ministarstvo turizma i zaštite životne sredine Crne Gore

CONTRACTSCONTRACT ON WATER SUPPLY (MUNICIPALITY-UTILITY)

CONTRACT ON SERVICE DELIVERY (UTILITY-CUSTOMERS)

CONTRACT ON PROVIDING THE SERVICES (UTILITY-OTHER COMPANY)

CONTRACT WITH DIRECTOR (UTILITY-DIRECTOR)

CONTRACT ON ESTABLISHING THE UTILITY BY TWO OR MORE MUNICIPALITIES

12

Ministarstvo turizma i zaštite životne sredine Crne Gore

NATIONAL REGULATOR

TO DEAL WITH NATURAL MONOPOLY CHARACTERISTIC FOR THIS SECTOR

TO PROTECT PUBLIC INTEREST

THE JURISDICTION MAY BE EXTENDED TO OTHER COMMUNAL SERVICES

13

Ministarstvo turizma i zaštite životne sredine Crne Gore

FINANCING-FULL COST RECOVERY

• COMMERCIAL BEHAVIOR AND FINANCIAL SUSTAINABILITY • FULL COST RECOVERY• FINANCING THROUGH GRANTS AND LOANS • FINANCING THROUGH REVOLVING FUND• FINANCING TO BE FACILITATED BY THE GOVERNMENT

14

Ministarstvo turizma i zaštite životne sredine Crne Gore

REVOLVING FUND

SUSTAINABLE AND STRONG FINANCIAL MECHANISM

INCREASING THE POSSIBILITIES TO ACCESS TO FUNDS

15

Ministarstvo turizma i zaštite životne sredine Crne Gore

REVOLVING FUND-ESTABLISHING

REVOLVING FUND FOR ENVIRONEMENTAL PROTECTION

WATER SUPPLY AND WASTE WATER TREATMENT SERVICES INCLUDED

TO BE ESTABLISHED BY THE LAW

16

Ministarstvo turizma i zaštite životne sredine Crne Gore

REVOLVING FUND-REVENUES

GOVERNMENTAL SUBVENTIONS

FROM INTERNATIONAL ORGANIZATIONS

THROUGH ACTIVITIES OF THE FUND

17

Ministarstvo turizma i zaštite životne sredine Crne Gore

THANKS