Implementation Plan for water utility directives - financial aspects


Commissioned by: Hrvatske vode
Project duration: November, 2010 – May, 2011
Project manager: Željka Kordej-De Villa, PhD


Brief outline: 
The aim of this project is to provide high quality support for the selection of best financial mechanisms which will ensure efficient implementation of activities from the Implementation Plan for water utility directives, taking into account strategic determinants in Croatian water management. This Plan has been prepared on the basis of technical consultations that lasted from February 2009 to July 2010 and contains agreed activities and deadlines concerning the implementation of directives and represents the base for clarifying the request for transition period. It serves as a basis for preparation of financial parts of the Implementation Plan for water utility directives.
 
In this research special attention was given to the economic and financial comparative analysis of total investments, revenue sources and costs and prices estimation of water services. Data are allocated to the analyzed time period (2010 - 2023) and specific spatial units – distributional areas, agglomerations and counties.  
 
After a thorough explanation of applied concepts and elements of performed analysis, special attention was given to the elaboration of methodology used for projections of population, water quantities, total investments, costs and prices of supplied services. The implementation of water utility directives is treated as a development project, therefore tools for elaboration of business and development plans are used. The main components are structure and dynamics of investments, revenue sources as well as structure and dynamics of potential effects on costs and prices of water services (water supply and sewage). Analysis of financial flows is used, and for estimation of total investments, revenue sources, costs and prices in analyzed period (2010-2023) method of NPV is applied. 
 
The research was also focused on the examining of potential institutional changes in implementation of water utility directives. In this process, Hrvatske vode is seen as the manager of the water sector and its role is to catalyze and harmonize the behavior of all stakeholders in the system. Applied results of this research helped us to identify potential additional microeconomic and field research that might complete information basis and consequently reduce risk in decision-making process.    
 
Contents:
0. Summary;
1. Main institutional, organizational and financial characteristics of Croatian water sector;
2. Concept and main elements of economic-financial analysis in implementation of water utility directives; 
3. Methodological issues of economic-financial analysis in implementation of water utility directives; 
4. Analysis of physical and financial flows in implementation of water utility directives; 
5. Costs analysis, water price analysis and investment analysis in implementation of water utility directives;
6. Institutional and organizational adjustments in implementation of water utility directives. 
 

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