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Data Collection Survey on Japanese Water Treatment Technology for Rural Area in the Kingdom of Cambodia

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Data Collection Survey on Japanese Water Treatment Technology for Rural Area in the Kingdom of Cambodia MINISTRY OF INDUSTRY, MINES AND ENERGY THE KINGDOM OF CAMBODIA Data Collection Survey on Japanese Water Treatment Technology for Rural Area in the Kingdom of Cambodia FINAL REPORT March, 2012 JAPAN INTERNATIONAL COOPERATION AGENCY METAWATER CO., LTD CTI ENGINEERING INTERNATIONAL CO., LTD. DELOITTE TOUCHE TOHMATSU LLC The applied exchange rate is: US$ 1.00 = KHR (Khmer Riel) 4,040 = ¥ 78.00 (as of Feb 2012) Data Collection Surveyon Japanese Water Treatment Technology for Rural Areain the Kingdom of Cambodia STUDY AREAS Study Areas Data Collection Surveyon Japanese Water Treatment Technology for Rural Areain the Kingdom of Cambodia PHOTOS（KAMPOT） Kampot existing Water Treatment Plant (WTP) Elevated tanks in Kampot WTP Kampot WTP Downtown of Kampot Kampot City Downtown of Kampot A Roundabout in Kampot City Tak Krola Dam in Kampot Data Collection Surveyon Japanese Water Treatment Technology for Rural Areain the Kingdom of Cambodia PHOTOS（KEP） Tourist spot of Kep beach Sea side Pao Heng Dam Meeting with O-Krasa commune Interview with people in Kep Sa La Khet Pond Phnom Voil Dam Veal Vong Dam Data Collection Survey on Japanese Water Treatment Technology for Rural Areas in the Kingdom of Cambodia Executive Summary 1. Introduction 1) Background of the Survey The National Strategic Development Plan (NSDP: 2006-2013) of the Kingdom of Cambodia (hereinafter referred to as Cambodia) aims to raise the rates of access to safe water to 80% in urban areas and 50% in rural areas by 2015. To achieve the target, the Ministry of Industry, Mines and Energy (hereinafter referred to as MIME) has set up an Action Plan for the water supply sector (2009-2013), one of the four major points of which is to promote cooperation with the private sector. 2) Objective of the Survey The primary objective of the survey is to investigate the capability of advanced technologies possessed by Japanese private enterprises in local areas of Cambodia and promote safe water service in provincial cities and rural areas where the service ratio remains low. In parallel, the survey also collects basic information related to the commercialization by the Public-Private Partnership (hereinafter referred to as PPP). 3) Study Area The Study areas are Kampot and Kep provinces. 2. Current status in the field of waterworks in Cambodia 1) Challenges in the water sector in Cambodia Common challenges facing the regional town water supply in Cambodia include a lack of funding and inability to individually secure project funds to expand and develop facilities and to renew and improve decrepit facilities. The government's policy, therefore, is to utilize private funds and by official development assistance. It is essential to improve water supply facilities in rural areas to protect people from waterborne diseases. However, as many rural areas are characterized by scattered dwellings, developing an urban-style water supply is very difficult. In the case of groundwater, there are shallow wells, which are either contaminated with arsenic or contain excessive iron. Accordingly, many rural residents have to buy substandard water from vendors at approximately 1.25 to 3.0 dollars per 1 m³. 2) Water utilities in Cambodia There were 16 public water suppliers in the 13 provincies of Cambodia in 2011. Of the 16 public water suppliers, 14, except the Phnom Penh Water Supply Authority (PPWSA) and Siem Reap Water Supply Authority (SRWSA), were directly administered by the Department of Potable Water Supply (DPWS) of MIME. However, due to lack of funding, the provincial capital water supply utilities of Kampong Chhnang, Prey Veng, Ratanak Kiri (Ban Lung), Kratie, Koh Kong, and Kampong Speu, which possess superannuated water facilities, have transferred the water utility licenses to private local companies in Cambodia, aiming to utilize the vitality of the private sector. Sum-i Data Collection Survey on Japanese Water Treatment Technology for Rural Areas in the Kingdom of Cambodia 3. Current status of the PPP projects in the field of waterworks in Cambodia Although Cambodia remains at an early stage of implementing its PPP project, some large-scale PPP projects have been implemented, especially in the power, communication and transport sectors. Regarding PPP as one of the key instruments to fill the financing gap by stimulating private sector investment in infrastructure, the Government of Cambodia has been seeking to improve the legal framework as well as the PPP transaction procedures. There are 16 small-scale concessions as well as a bulk water supply BOT project. The World Bank is a major player in the field of donor-assisted PPP projects in the water sector; for instance, a loan has been given to the Government of Cambodia to help the country reach its Millennium Development Goals (CMDGs) in water supply and sanitation by 2015. Two approaches were piloted under the Cambodia Provincial and Peri-Urban Water and Sanitation Project. 4. Related laws and regulations 1) Concession and BOT Laws on the PPP have not yet been formulated in Cambodia. To describe the laws related to the PPP, Law on Concession and Sub-Decree on Build-Operate-Transfer (BOT) Contract are mentioned in this section. i. Law on Concession The Law on Concession was established on 2007 to promote and facilitate the implementation of privately financed installations in Cambodia, which is divided into six chapters and the water supply sector is included in Article 5. ii. Sub-Decree on Build-Operate-Transfer (BOT) Contracts The Sub-Decree on Build-Operate-Transfer (BOT) Contract was established in 1998, applicable to 17 fields and including “clean water production plants”. The BOT period is determined not to exceed 30 years, except for the terms and conditions stipulated in the contract. Chapter 2 mentions the concessionaire selection procedures. The BOT contract is determined to be conducted through an international or national bidding process; however, the selection is to be conducted through a negotiation procedure in the case stated in Article 9. In addition, institutions which decide on the technical and financial selection of the concessionaire are mentioned in Article 10. If the investment project costs less than or equal to 5 million dollars, it is decided between the Minister in charge of the related project, the Ministry of Economy and Finance (MEF) and the Council for the Development of Cambodia (CDC). 2) Sub-Decree on the Water Licensing Draft The Sub-Decree on Water Licensing Draft which is designed to establish conditions, formalities, and procedures for issuance, transfer, extension, modification, cancellation, suspension, and to specify valid periods for water licenses or permits in Cambodia is subject to the approval of the Council of Ministers. This Sub-Decree Draft comprises nine chapters and covers and governs all activities of water use, for either consumption or commercial purposes. It also covers the development of water resources within the context of Cambodia. After the General Provision in Chapter 1, Chapter 2 determines that the Minisry of Water Resource and Meteorology (MOWRAM) shall be tasked with managing and registering water exploitation licenses or permits. Chapter 3 stipulates the following six types of licenses or permits: 1. License or Sum-ii Data Collection Survey on Japanese Water Treatment Technology for Rural Areas in the Kingdom of Cambodia Permit to Make Use of Surface Water, 2. License or Permit to Make Use of Ground Water, 3. License or Permit for Drainage of Waste Water into Surface and groundwater, 4. License or Permit to Exploit Ore Deposits of rivers, streams, canals, ponds, lakes, water reservoirs, natural reservoirs or sea, 5. License or Permit to fill in rivers, streams, canals, ponds, lakes, dikes, water reservoirs, natural reservoirs or sea beach, and 6. License or Permit for Construction of Waterworks Structures. Furthermore, only one license or permit is determined to be valid per exploitation site. 5. Application of Japanese technologies and water supply planning 1) Planning of framework for water supply facilities in the Study area This survey aims to pressure water supply project planes for aspecific local city and rural areas in Cambodia and then confirm applicability of water treatment leading–edge technologicalies which Japanese private firm have. In addition, the project is assumed to be implemented as a PPP project, Study area ・ A PPP project for the water supply will be planned. ・ A bulk water supply project will be developed for Kampot Water Supply (KWS）and Water Supply projects covering Kep beach resort area and some rural areas will be developed for the Kep province. Application of Japanese water treatment technologies ・ Ceramic Membrane Filtration Equipment is employed as one of the Japanese water treatment technologies. Bulk water supply to the Kampot provincial capital (KWS) ・ The collective target for bulk water distribution in the Kampot province is the set of newly installed distributing areas. The PPP project will start on condition that the construction of the distribution network is completed separately within a short time, with financial assistance from overseas. ・ Distribution from the existing water treatment plant of KWS will target communes, consisting mainly of existing distribution areas. While the disibution from the bulk water supply project will mainely target the communes with non-served areas. ・ MIME expresses it is enough for the mutual business sustainability to employ take-or-pay agreement rather than the agreement of distribution zoning. At any rate, in order to maintain mutual business sustainability between Cambodian Government/MIME and water supplier of the special purpose company (SPC), take-or-pay agreement conclusion is imperative. Water supply in the Kep provincial ・ In the Kep beach (resort) area, piped distribution with a water treatment plant will be used as the means of supply. In rural areas, a Mobile Ceramic Membrane Filtration System (M-CMF) will be used. The treated water will be reserved in water tanks.
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