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WWF Living Neretva Project Phase II

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WWF Living Neretva Project Phase II WWF Living Neretva project Phase II EU-WFD and Economics in the Neretva-Trebisnjica River Basin Applying EU Economic Guidelines for the WFD - Economic Analysis Working Group Economics report [FINAL VERSION, 30.06.2008] PROJECT: “LIVING NERETVA. TOWARDS EU STANDARDS IN THE NERETVA RIVER BASIN (BiH)” Living Neretva- Economic Valuation Working Group (WFD-WG2) Financed by: Norwegian Ministry of Foreign Affairs Project implemented by: WWF Mediterranean Programme in partnership with WWF Norway. Supervisor, WWF Mediterranean Programme: Francesca Antonelli, WWF MedPO Project leader, Living Neretva: Dr. Branko Vučijak, WWF MedPO Expert leader: Eduard Interwies, InterSus Sustainability Services Working group,: Erna Ćorić Dalibor Vrhovac Alen Robović (only during initial phase) ii Table of Contents 1 Executive Summary ................................................................................................................. 1 2 Background and Rationale....................................................................................................... 3 3 Modus operandi ....................................................................................................................... 4 4 The Neretva-Trebisnjica basin: an overview ............................................................................ 5 5 National requirements and specifications regarding water management in BiH.................... 11 5.1 Institutional structure and relevant legislation............................................................... 11 5.2 The new BiH water laws: a move towards European legislation .................................. 12 6 The requirements of the WFD in regards to economics & their correspondence in the BiH Water Laws ...........................................................................................................13 6.1 The overall role of economics for developing a river basin management plan – Correspondence in the BiH Water Laws.................................................................. 13 6.2 The starting point for integrating economics: the economic analysis according to the WFD –Correspondence in the BiH Water Laws ............................... 15 6.3 Conclusions regarding the current transposition of European water legislation and especially the WFD economics requirements in the BiH Water Laws ................................................................................................................. 16 7 Integration of the economic value of ecosystem services into WFD implementation....................................................................................................................... 18 8 Applying EU Economic Guidelines for the Economic Analysis to Neretva- Trebisnjica River Basin .......................................................................................................... 21 8.1 The Economic Importance of Water Uses.................................................................... 22 Identified Gaps and Necessary Measures.................................................................... 38 8.2 Baseline Scenario......................................................................................................... 40 Identified Gaps and Necessary Measures.................................................................... 55 8.3 Assessing current levels of the recovery of costs of water services............................. 57 Identified Gaps and Necessary Measures.................................................................... 65 8.4 Preparing for the cost-effectiveness analysis ............................................................... 67 Identified Gaps and Necessary Measures.................................................................... 71 9 Conclusions/Next steps..........................................................................................................73 10 Annex I: Area coverage of the Neretva-Trebisnjica river basin.............................................. 74 11 Annex II: Summary Table on information regarding the “Economic importance of water uses” ........................................................................................................................ 78 12 Annex III: Questionnaire for the Water Companies................................................................ 91 13 Annex IV: Summary Table on information regarding the Baseline Scenario ......................... 96 14 Annex V: Questionnaires received from the water supply utilities ......................................... 99 iii Tables Table 4-1: Overview of the administrative units in the Neretva-Trebisnjica river basin...................6 Table 4-2: River Basin characteristics according to hydrological boundaries .................................9 Table 4-3: River Basin characteristics according to chosen administrative boundaries................10 Table 8-1: Population natural growth rate 2000-2006...................................................................22 Table 8-2: Employment in specific economic sectors in Neretva-Trebisnjica ...............................25 Table 8-3: Abstracted and delivered water according to Water Agencies.....................................27 Table 8-4: Abstracted and delivered water according to Water Companies .................................27 Table 8-5: Data on water supply according to Water Agencies ....................................................28 Table 8-6: Data on wastewater services according to Water Agencies ........................................29 Table 8-7: Overview of the water supply services.........................................................................30 Table 8-8: Overview of the waste water services..........................................................................31 Table 8-9: Data on water demand in Neretva-Trebisnjica RB according to Water Agencies........33 Table 8-10: Irrigation systems in Neretva-Trebisnjica RB (1990 data from WMF BiH) .................33 Table 8-11: Irrigation systems in Neretva-Trebisnjica (RS part) ...................................................34 Table 8-12: Data on agriculture in Neretva-Trebisnjica RB...........................................................35 Table 8-13: Data on Hydropower and thermo power in Neretva-Trebisnjica RB ..........................36 Table 8-14: Data on tourism in Neretva-Trebisnjica RB................................................................37 Table 8-15: Natural growth in municipalities in Neretva-Trebisnjica RB .......................................41 Table 8-16: Projected increase of VAT 2007-2010 .......................................................................43 Table 8-17: Planned water demand according to “BiH Water Management Framework”.............46 Table 8-18: Forecast for drinking water demand in Neretva-Trebisnjica RB.................................47 Table 8-19: Proposed scenario for agricultural development........................................................49 Table 8-20 Production of electricity FBiH for 2010-2020...............................................................51 Table 8-21: Production of electricity RS for 2010-2020.................................................................51 Table 8-22: Plan of investments into new HPP and TPP until 2020 .............................................52 Table 8-23: Measures for economic sectors .................................................................................53 Table 8-24: Water services prices according to Water Companies ..............................................58 Table 8-25: Collection rate in municipal Water Companies ..........................................................59 Table 8-26: Tax base for water management fees........................................................................62 Table 8-27: Collected revenues from WM fees in Neretva-Trebisnjica RB ...................................62 Table 8-28: Cost recovery in municipal Water Companies ...........................................................64 Table 8-29: Electricity production in planned HPPs in upper part of Neretva-Trebisnjica RB.......68 Table 8-30: Characteristics of the planned HPP in upper part of Neretva river ............................68 Table 8-31: Estimated costs of measures for UWWTPs ...............................................................69 Table 8-32: UWWTP investment cost distribution – Neretva-Trebisnjica RB................................70 Table 10-1: Table: Area coverage of Neretva-Trebisnjica RB.......................................................75 Table 11-1: Summary of information regarding the importance of water uses..............................79 Table 13-1: Summary of information on parameters and policy projections for the baseline scenario ......................................................................................................................97 iv Figures Figure 4-1: Neretva-Trebisnjica River Basin _________________________________________7 Figure 4-2: Neretva-Trebisnjica River Basin _________________________________________8 Figure 4-3: Neretva-Trebisnjica river basin spatial coverage _____________________________9 Figure 6-1: Implementation steps of the WFD _______________________________________14 Figure 7-1: Linkages between Ecosystem Serviced and Human Well-being________________19 Figure 7-2: Ecosystems services provided by or derived from inland waters _______________20 Figure 8-1: Water losses _______________________________________________________28
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