EU Funds as a Source of Finance for the Development of Public Water Systems and Public Sewage Systems
Specialist seminar
As part of the 14th edition of the Aqua international trade fair on water systems, water energy and the protection of the environment in Trenčín, Centire, s.r.o., as supplier of the project “Specialist Assistance for Slovak Regional Water Companies” prepared a seminar on June 20th 2007 entitled “EU Funds as a Source of Finance for the Development of Public Water Systems and Public Sewage Systems”.
The following facts led us to organise this seminar on the occasion of this tradition water industry event:
- a seminar was part of the properly planned project output, whose theme “Euro-funds – a source of finance for public water systems and public sewage systems” matched the context of the fair itself, since it is mainly suppliers of water companies who present themselves here,
- the Aqua trade fair is a traditional meeting place for representatives of the Ministry of the Environment SR, the Regulatory Office for Network Industries, regional and district offices of the environment, specialist water sector public, suppliers, water companies as well as towns and villages who all take part with their own activities in creating the environment in which the water industry operates,
- the subject of “Euro-funds” is always resonant since at present the final decisions are being taken on how to carry out the upcoming programme period, which is decisive for the water industry in particular, since 2010 and 2015 are key dates for meeting the SR’s obligations stemming from the entry contract with the European Union.
The seminar was aimed in particular at the management of water companies, representatives of towns and villages, specialist employees in the project departments of water companies, but all visitors to the AQUA fair were naturally welcome.
The main aim of the seminar was to provide participants with information on the possibilities and the conditions for using EU funds as financial resources to cover the development needs of public water systems and sewage systems in the 2007 – 2013 planning period. The active attendance – almost 80 participants – proved the interest in the given subject.
The seminar’s specialist programme was set up to put forward the idea that the key moment for meeting the vision of each water company – a constant increase in the quality of services provided – is the preparation of a clear, and mainly financially secure investment strategy to carry out the long-term sustainable development of the water infrastructure in accordance with the legal regulations of the SR and EU. One of the resources that can be used to meet it are EU funds.
Lecture content:
As part of the lecture by Ing. J. Kleinertová, such categories as investment were analysed, along with its position as a strategic priority for preserving enterprise, the proportion of renovation and development of property, the long-term sustainability of a project and the efficiency or return on deposited capital. The task and activity of project departments in meeting these basic tasks was discussed. Ing. Martin Dudák presented a contribution in which he looked at investments as corporate finance. The difference in approaches when planning investments in the water industry was compared with those of other business entities as well as other network industries. Here, the disproportion between the difficulty of the investments and the generated proceeds for water companies in comparison with other entities rang out in particular. Sustainable financial investments can only be ensured by the optimal combination of four sources of project financing, including:
- own capital, e.g. share-holder deposit in basic capital, resources created by the company,
- debt financing, e.g. loans and bonds,
- grants, subsidies, funds e.g. state budget, EU; as part of a long-term conception, however, water companies should count on the sector being able to be independently financed without subsidies from the state of the EU or other public funds,
- PPP projects e.g. in the form of Build – Operate – Transfer (BOT) – if there is no possibility of financing using a combination of the previous resources, the management should consider carrying out the investment in this form. The structure should be chosen according to the structure of the assets, costs and revenue and should also be an attempt to minimise the price of the capital.
The technical aspects of changing the approach to the creation of agglomerations (contribution by Ing. E. Rajczyková) fills in on this problem, because these should be used to report compliance with the requirements of directive 91/271/EHS in the removal and cleaning of communal waste water. Since the Plans for the Development of Public Water Systems and Public Sewage Systems are still valid, where another approach was applied to the creation of agglomerations, the Ministry of the Environment SR should define clear and transparent rules for the provision of subsidies from EU funds to ensure the development of public water systems and public sewage systems. If a new approach to the creation of agglomeration is fully applied, there will be a significant reduction in the possibility of smaller villages being connected as part of agglomerations, and the requirements on the level of cleaning waste water will be significantly reduced, which, however, will be in conflict with the need to implement the requirements of EU directives on quality, in particular the Overall Directive on Water. In the event that there is no change in the conditions for accepting prepared projects for use in the current period, they will need to be revised, thus leading to the devaluation of considerable finances which the water companies invested in their preparation.
During the event, opinions were heard on the insufficient coverage of the necessary financial volumes for investment in the development of public water systems and public sewage systems. In order to provide complete coverage of the problem of Euro-funds, a lecture by Ing. T. Szőke was included in the seminar’s programme, which informed participants on further possibilities for using Euro-funds for other activities than the direct development of the water infrastructure. This contribution made clear the possibilities of using European resources in the fields of education, the use of renewable sources of energy, research, development and innovation, quality management and so on.
Specialist Assistance for Slovak Regional Water Companies
Activities carried out as part of the project
Activities under preparation