Infrastructure Projects Facility Technical Assistance Window (IPF TA) EuropeAid/128073/C/SER/MULTI Sub project: WB4-MNE-ENV-12B: Management models and options for cost recovery for the future construction and op- eration of regional landfills in Montenegro (Case Study for Nikšić) Institutional Review Report (Activity 2) May 2012 Project Office Deĉanska 5, 1st floor 11000 Belgrade Serbia Tlf. 45 97 22 11 E-mail xxxx web COWI-ipf.com COWI A/S Parallelvej 2 DK-2800 Kongens Lyngby Denmark Tlf. +45 45 97 22 11 Web www.cowi.com The European Union's 2008 IPA Programme for Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, Montenegro, Serbia, Kosovo (un- der UNSCR1244/1999), Turkey and Iceland Infrastructure Projects Facility Technical Assistance Window (IPF TA) Western Balkans EuropeAid/128073/C/SER/MULTI Sub project: WB4-MNE-ENV-12B Management models and options for cost recovery for the future construction and operation of regional landfills in Montenegro (Case Study for Nikšić) Institutional Review Report (Activity 2) FINAL May 2012 Document no. WB4-MNE-ENV12B_TECH_Activity 2 Report Version 2 Date of issue 31 May 2012 Prepared Srna Sudar, Zdenka Ivanovic, David Toft Checked Dr Merih Kerestecioğlu, Ayşe Çiğdem Arslancan, David Toft Approved Dr Merih Kerestecioğlu Infrastructure Projects Facility – Technical Assistance Window i Sub project: WB4-MNE-ENV-12B: Management Models and Options for Cost Recovery for the Future Construction and Operation of Regional Landfills in Montenegro Table of Contents 1 Executive Summary 6 2 Report Overview 10 3 Introduction 12 4 Institutional and Legal Review 14 4.1 Institutional set-up at national level 14 4.2 PROCON 16 4.3 National policy framework 18 4.4 Relevant national legislation 26 4.5 Institutional set-up at local level 36 4.6 Development needs 39 5 Waste Generation in Nikšić Area 41 5.1 Review of national economic development parameters 41 5.2 Review of forecasts for waste generation 42 6 Case Study Nikšić 49 6.1 Nikšić 49 6.2 Plužine 52 6.3 Šavnik 54 6.4 Regional landfill for Nikšić, Šavnik and Plužine 56 6.5 Sources of financing 57 . Infrastructure Projects Facility – Technical Assistance Window ii Sub project: WB4-MNE-ENV-12B: Management Models and Options for Cost Recovery for the Future Construction and Operation of Regional Landfills in Montenegro List of Tables Table 1 Other institutions in solid waste management in Montenegro ................................................................................. 16 Table 2 Economic indicators of Montenegro, 2012 ................................. 41 Table 3 Population and waste generation of the Nikšić catchment area, 2004 .................................................................................... 43 Table 4 Generated amounts (t/year) of municipal waste for Nikšić, Pluţine and Šavnik, from 2004 to 2009 ...................................... 44 Table 5 Total amount of waste in Nikšić, Pluţine and Šavnik, in tons, 2010-2029 .......................................................................... 44 Table 6 Total amount of waste generated, in tons, 2010-2029 ................ 45 Table 7 Total amount of waste generated, disposed and recycled from 2010 to 2029....................................................................... 45 Table 8 Population of Nikšić, Pluţine and Šavnik, 2007-2029 ............... 46 Table 9 Population by municipality and settlement type ......................... 46 Table 10 Waste generation forecast, 2013-2030 ........................................ 47 Table 11 Key data on Nikšić ...................................................................... 49 Table 12 Basic data on Nikšić PUC ........................................................... 51 Table 13 Key data on Pluţine .................................................................... 52 Table 14 Basic data on Pluţine PHUC ...................................................... 53 Table 15 Key data on Šavnik ..................................................................... 54 Table 16 Data on Šavnik PUC ................................................................... 55 Table 17 SWOT Analysis for the North Region (Pluţine, Šavnik), strengths and weaknesses ............................................................ 69 Table 18 SWOT Analysis for the North Region (Pluţine, Šavnik), opportunities and Threats ............................................................ 70 Table 19 SWOT Analysis for the Central Region (Nikšić), strengths and weaknesses ........................................................................... 71 Table 20 SWOT Analysis for Central Region (Nikšić), opportunities and threats ................................................................................... 72 . Infrastructure Projects Facility – Technical Assistance Window iii Sub project: WB4-MNE-ENV-12B: Management Models and Options for Cost Recovery for the Future Construction and Operation of Regional Landfills in Montenegro List of Figures Figure 1 Organisational chart of PROCON .............................................. 18 Figure 2 Organisational chart of the Municipality of Nikšić .................... 50 Figure 3 Organisational chart of the Municipality of Pluţine ................... 53 Figure 4 Organisational chart of the Municipality of Šavnik .................... 55 List of Annexes Annex 1 Main Legal Acts of PROCON Annex 2 Legal Acts Reviewed for Legislative Framework Annex 3 Secondary Legislation Annex 4 SWOT Analysis on the Regions in Montenegro . Infrastructure Projects Facility – Technical Assistance Window iv Sub project: WB4-MNE-ENV-12B: Management Models and Options for Cost Recovery for the Future Construction and Operation of Regional Landfills in Montenegro List of Abbreviations EC European Commission EIB European Investment Bank IPF Infrastructure Projects Facility MNE Montenegro MoSDT Ministry of Sustainable Development and Tourism PROCON National Project Implementation Unit in the Field of Communal Services and Environment PUC Public Utility Company TA Technical assistance ToR Terms of reference EPA Environmental Protection Agency IPPC Integrated pollution prevention and control EU European Union EIA Environmental impact assessment GoM Government of Montenegro IFI International finance institute EUR European currency NSSD National Strategy for Sustainable Development MSSD Mediterranean Strategy of Sustainable Development NPI National Program for Integration WI Waste Incineration (Directive) WEEE Waste Electrical and Electronic Equipment (Directive) RoHS Restriction of Hazardous Substances (Directive) PCB Polychlorinated biphenyls PCT Polychlorinated terphenyls BoT Build, operate, transfer PPP Public private partnership CRPS Central Register of business organizations . Infrastructure Projects Facility – Technical Assistance Window v Sub project: WB4-MNE-ENV-12B: Management Models and Options for Cost Recovery for the Future Construction and Operation of Regional Landfills in Montenegro MONSTAT Statistical Office of Montenegro PHUC Public Housing and Utility Company RM Republic of Montenegro WTN Waste Transfer Note SME Small and medium size enterprises MoF Ministry of Finance WBIF Western Balkans Investment Framework . Infrastructure Projects Facility – Technical Assistance Window 6 Sub project: WB4-MNE-ENV-12B: Management Models and Options for Cost Recovery for the Future Construction and Operation of Regional Landfills in Montenegro 1 Executive Summary 1.1 English version The current document constitutes the Institutional Review Report (Activity 2) of the project “Management models and options for cost recovery for the future construction and operation of regional landfills in Montenegro (Case Study for Nikšić).” The report is divided into the following sections: Overview of the Report (Chapter 2) – lists the issues to be addressed in the report, as well as the presents the objective of the report, which is to examine what future solutions for procurement and operations are available under the current legal and institutional framework, as well as provides some initial indications of the condition of the municipalities and PUCs that will be involved in the regional landfill scheme. In this sense, it provides some basic inputs into the Activity 3 Report. Other- wise, however, the current report does not affect the outputs of the Ac- tivity 3 and 4 Reports. Introduction (Chapter 3) – provides an introduction to the report, in- cluding the main principles of solid waste management in the Montene- gro. Institutional and Legal Review (Chapter 4) – covers the institutional set-up at the national level, as well as the national policy framework and relevant national legislation with respect to solid waste manage- ment, the institutional set-up at the local level, and development needs in the sector. Waste Generation in Nikšić Area (Chapter 5) – reviews the forecast for waste generation in the Nikšić Service Area for solid waste manage- ment. Case Study on the Nikšić Service Area (Chapter 6) – presents the basic information on solid waste management in the Nikšić Service Area, the proposed regional landfill, and financing of the solid waste manage- ment sector, in particular with respect to landfill operation, closure, and post-closure aftercare. The institutional set-up for solid waste management is fairly typical: the na- tional government sets the policy objectives for the development of the sector, while the local governments function as the regulators of the services at the lo- cal level, including