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Efectele Parteneriatului Public-Privat În Serviciile Publice De Alimentare Cu Apă Şi De Canalizare Din Municipiul București (Perioada 2008-2012)

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Efectele Parteneriatului Public-Privat În Serviciile Publice De Alimentare Cu Apă Şi De Canalizare Din Municipiul București (Perioada 2008-2012) Ioan RADU, PhD Cleopatra ŞENDROIU, PhD THE EFFECTS OF THE PUBLIC PRIVATE PARTNERSHIP IN THE PUBLIC WATER SUPPLY AND SEWERAGE SERVICES OF BUCHAREST (2008 – 2012) 2013 FOREWORD This Study is a continuation of the one developed by a team of professors – researchers1 from the Academy of Economic Studies which measured the effects of the Public – Private Partnership in light of the changing perceptions of consumers in Bucharest between 2000 and 2007. The condition of the water supply and sewerage services in Bucharest at the end of 2007 was revealed most faithfully by the conclusions drawn after having processed the responses obtained in a survey conducted on a representative sample of customers of Apa Nova Bucharest about their perceptions on various aspects of the services at the end of 2007 compared to their perceptions prior to the concession. The main conclusion was that most consumers perceived a major and steady increase in both the quality of the water and sewerage services and the relationships of the supplier of these services with all consumers. This research is a continuation of the previous one and the authors have attempted a totally different vision from the first work to identify and 1 I. Radu, V. Lefter, C. Şendroiu, M. Ursăcescu, M. Cioc – Efectele parteneriatului public- privat în serviciile publice de alimentare cu apă şi de canalizare. Experienţa municipiului Bucureşti. ASE Publishing House, Bucharest, 2008. further quantify the positive or negative developments in the performance of Apa Nova Bucharest between 2008 and 2012 on the following levels: The degree of achievement by Apa Nova Bucharest of the objectives of the Concession Agreement. The dynamic analysis of the overall performance of Apa Nova Bucharest as a water supply and sewerage service operator. The comparative analysis of the performance of Apa Nova Bucharest in relation to similar representative national operators. The analysis of the Public – Private Partnership in relation to the other forms of delegation of the water supply and sewerage services. All these paths of action have allowed the authors to establish the development of the study called “Effects of the Public – Private Partnership in the Public Water Supply and Sewerage Service in Bucharest (2008 – 2012)” as the fundamental objective of the research. The authors aimed at approaching the effects of PPP on the public water supply and sewerage services in Bucharest in terms of the degree of achievement of the Levels of Service specified in the Concession Agreement and undertaken by Apa Nova Bucharest as the Concessionaire, as well as the overall performance recorded by it 12 years after the entry into effect of the concession of said services. The authors would like to thank the management of Apa Nova Bucharest and give personal thanks to the Managing Director Mr. Bruno Roche and the Deputy Managing Director Mr. Epsică Chiru for their support throughout the development of this paper. Last but not least we would like to thank our colleagues PhD student Ramona Matei, who performed the calculation of the financial indicators in Chapter 2, and Mrs. Iulia Rugină for her special effort in making sure that the paper met the quality standards of such a paper. The authors CONTENTS 1 The Analysis of the Degree of Accomplishment of the Objectives of the Concession Agreement (2008 – 2012) ................................................................................................ 4 1.1 4 1.2 Considerations on the Status of Water Supply and Sewerage Services at the End of 2007 ....................................................................................................................... 4 1.3 The Need for the Study ....................................................................................... 9 1.4 The Research Methodology .............................................................................. 13 1.5 The Presentation of the Concession Agreement ............................................... 16 1.5.1 Objectives of the Concession ....................................................................... 17 1.5.2 The Control of the Concession and Levels of Service .................................. 18 1.5.3 Requirements of the Concession Agreement .............................................. 19 1.6 Levels of Service ................................................................................................ 24 1.6.1 “Drinking Water” Levels of Service .............................................................. 26 1.6.2 “Sewerage” Levels of Service ....................................................................... 55 1.6.3 “Customer” Levels of Service ....................................................................... 78 1.6.4 Industrial Water Levels of Service ................................................................ 90 2 Dynamic Analysis of the Overall Performance of Apa Nova Bucharest (2008 – 2012) 92 2.1 General Considerations on the Performance of the Water Supply and Sewerage Services 92 2.2 Criteria for measuring Performance ............................................................... 106 2.3 Analysis of the Performance of Apa Nova Bucharest in 2008 – 2012 ............. 110 2.3.1 Analysis of the Performance in terms of Internal Processes ..................... 112 2.3.2 Operational Costs ...................................................................................... 160 2.3.3 Personnel Expenses and Productivity ........................................................ 169 2.3.4 Non-revenue Water ................................................................................... 175 2.4 Social Performance in Terms of the Internal Processes .................................. 179 2.4.1 Working Conditions ................................................................................... 179 2.4.2 The Social Dialogue .................................................................................... 187 2.4.3 Professional Development ......................................................................... 190 2.5 Environmental Performance in terms of the Internal Processes ..................... 194 2.6 Performance in Terms of Customers/Consumers ........................................... 203 2.6.1 The Profile of Consumers in Bucharest ...................................................... 203 2.6.2 Social and Environmental Performance from the Perspective of Customers/Consumers ............................................................................................. 223 2.6.3 The Participation in Projects for protecting the Historical and Cultural Assets 242 2.6.4 Raising the Public’s Environmental Awareness ......................................... 243 2.7 Performance in terms of the Stakeholders/Civil Society ................................. 246 2.7.1 Partnerships for Social Projects ................................................................. 246 2.7.2 Environmental Partnerships and Actions .................................................. 248 2.7.3 The Relationship with the Regulatory Authorities .................................... 250 3 Comparative Analysis of the Performance of S.C. Apa Nova Bucureşti S.A. against Similar Major Operators at National Level ................................................................... 251 4 The analysis of Public-Private Partnership of Concession Type in Relation to Other Forms of Delegation of Water Supply and Sewerage Services ...................................... 279 4.1 Framework for the Analysis of Public Private Partnership of Concession Type 279 4.2 Specificities of the Concession of Water Supply and Sewerage Services in Bucharest ...................................................................................................................... 302 4.3 Conclusions ..................................................................................................... 307 LIST OF ABBREVIATIONS AFNOR Association Française de Normalisation NAAR National Administration Apele Române APA NOVA S.C. Apa Nova Bucureşti S.A., sometimes also BUCHAREST referred to as the operator or the Concessionaire MARPS Municipal Authority for the Regulation of Public Services of Bucharest ARBAC Agency for the Regulation of Water and Sewerage of Bucharest ADDBR Administration of the Danube Delta Biosphere Reserve WB World Bank ROLM Romanian Office for Local Metrology CA Concession Agreement GCB General Council of Bucharest DPHB Directorate for Public Health of Bucharest PE Permissible Exclusions CCA Continued Compliance Assessment ICA Initial Compliance Assessment FME Force Majeure Event DGCB Decision of the General Council of Bucharest IBNET International Benchmarking Network IFC International Finance Corporation NIS National Institute of Statistics MPF Ministry of Public Finance LOS Level of Service OSL Objective Standard Level MB Mayoralty of Bucharest DDBR Danube Delta Biosphere Reserve RADET Autonomous Administration for the Distribution of Thermal Energy WWTP Wastewater Treatment Plant DC Deadline for compliance E.U. European Union 1 Efectele parteneriatului public-privat în serviciile publice de alimentare cu apă şi de canalizare din municipiul București (perioada 2008-2012). 2 Efectele parteneriatului public-privat în serviciile publice de alimentare cu apă şi de canalizare din municipiul București (perioada 2008-2012). 3 Efectele parteneriatului public-privat în serviciile publice de alimentare cu apă şi de canalizare din municipiul București (perioada 2008-2012). 1 THE ANALYSIS OF
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