water utility reform plan

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Ministarstvo turizma i zaštite životne sredine Crne Gore

WATER UTILITY REFORM PLAN

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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

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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)

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

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PRINCIPLES

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

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UTILITY-ESTABLISHING

UTILITY FOR ONE MUNICIPALITY –LIMITED LIABILITY COMPANY

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

FOUNDER- MUNICIPALITY(IES)

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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

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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)

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UTILITY– STRUCTURE

BOARD OF DIRECTORS

DIRECTOR

STAFF

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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

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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

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NATIONAL REGULATOR

TO DEAL WITH NATURAL MONOPOLY CHARACTERISTIC FOR THIS SECTOR

TO PROTECT PUBLIC INTEREST

THE JURISDICTION MAY BE EXTENDED TO OTHER COMMUNAL SERVICES

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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

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REVOLVING FUND

SUSTAINABLE AND STRONG FINANCIAL MECHANISM

INCREASING THE POSSIBILITIES TO ACCESS TO FUNDS

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REVOLVING FUND-ESTABLISHING

REVOLVING FUND FOR ENVIRONEMENTAL PROTECTION

WATER SUPPLY AND WASTE WATER TREATMENT SERVICES INCLUDED

TO BE ESTABLISHED BY THE LAW

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REVOLVING FUND-REVENUES

GOVERNMENTAL SUBVENTIONS

FROM INTERNATIONAL ORGANIZATIONS

THROUGH ACTIVITIES OF THE FUND

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THANKS

water utility reform plan

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