Waste Water Treatment in Olsztyn
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ISPA INFORMATION SHEET No: 2000/PL/16/P/PE/014 Measure title : Waste water treatment in Olsztyn Authority responsible for implementation Name: City Hall, Olsztyn Address: 10-101 Olsztyn Pl. Jana Pawła II 1 Name: National Fund for Environmental Protection and Water Management Address: Konstruktorska 3A 00-673 Warsaw, Poland Description The City of Olsztyn has a population of 173,000 and is the capital of the Warminsko- Mazurskie Region. The area around Olsztyn has a large number of lakes and the city is an important center for the tourist industry. The city has a waste water treatment plant which uses the activated sludge method of treatment and 98% of the city’s inhabitants are connected to the plant. The total number of inhabitants served in the city and the surrounding region is 204,000. At present the treatment plant does not ensure the effective elimination of pollutants, especially nitrogen and phosphorus compounds. The current proposal is to modernise the plant introducing a three-stage treatment process as a result of which the quality of wastewater discharged to the receiver (the Łyna River) will meet the requirements of the Polish and EU legislation. The planned technology change includes both the replacement of worn out equipment and the installation of new facilities all within the site of the existing plant. The output of the treatment plant will increase from 56,000m³/d to 60,000m³/d. Economic and social cost-benefit analysis An economic internal rate of return was not calculated for the project due to the difficulties in quantifying many of the economic benefits and the incompleteness of relevant data. These benefits include: - environmental benefits of improved water quality in the River Lyna and ultimately in the Baltic Sea - improved water treatment quality will make Olsztyn a more attractive location for industry and tourism - modern process control and instrumentation will improve the reliability of service - energy consumption will decrease after modernisation through more efficient use of electricity and reuse of bio-gas 1 - operating and maintenance costs will be 10% lower in the up-graded plant An alternative economic analysis takes the form of a cost effectiveness study which compares alternative technical solutions and their investment, operating and maintenance costs over the economic life cycle of the project. The options are limited in this case: the treatment plant is already in place and the alternative to the present plant would be an entirely new plant at another location which would require redirection of the collection system and the purchase of land. The present proposal concentrates on the effective reuse of existing components. The treatment method to be used is well understood with no risks associated with unproven technology. The feasibility study for the project estimates the costs of the two options and concludes that modernising the existing site is the most cost-effective solution to achieve the objectives of the project. Main elements of financial analysis Project costs and incremental operating costs assumptions were reviewed by independent technical consultants. The financial analysis and rationale for the project keeps in mind the principles of (a) the polluter pays (b) user charge acceptability and affordability and (c) the need to ensure financial sustainability of the water utility in the future. The level of ISPA grant has been calculated on the basis of tariff levels rising during the implementation of the project to enable full recovery of operating and maintenance costs and the additional capital expenditure needed to ensure that the project can be implemented in a sustainable way. The ISPA grant is set at a level which will ensure that tariffs will remain within a maximum affordability limit of not more than 3.5 % of household income as compared with 3.1% at present. The analysis indicates that the appropriate level of ISPA support for the project is 53% of the total cost. When a small amount of ineligible expenditure is excluded, the ISPA grant come to 54% of the eligible cost. Environmental impact analysis The type of infrastructure investment falls within projects covered by Annex II of the EU Environmental Impact Assessment Directives. These are project types for which the national authorities have discretion to decide if an EIA is required. In this case, they have decided that in view of the environmentally sensitive nature of the region that an EIA should be carried out. After this was completed, the competent environmental authorities gave their final consent for the construction of the project on 14 August 2000. Cost and assistance (in Euro) Total cost Private sector Ineligible cost Total eligible ISPA grant Grant contribution cost Rate % 12 932 200 0 215 800 12 716 400 6 866 856 54 2 3 .