Water Crisis and Agricultural Development in Palestine

Palestine Technical University-KadoorieTulkarem, West Bank, Palestine

21-22 May, 2012

Role of Private Sector in wastewater reuse

projects

Global Wastewater Reuse

There is a global trend in

increasing dependence on the

reuse of wastewater as

sustainable non-conventional sustainable non-conventional

water resource for solving the

rising global water stress

especially in arid countries

Drivers for Wastewater Re use in

Palestine

• It converts wastewater that

potentially damages the

environment into a resources that

can improve the environment,can improve the environment,

• It is a sustainable and reliable

resource regardless of weather

patterns,

• It is available where the population

is, and grows with the population

increase, or long distance water

transport,

Drivers for Wastewater Re use in

Palestine

• It reduces pressure on other

raw water sources for potable

uses,

• It is a local solution to water• It is a local solution to water

scarcity where it is difficult to

find additional resources from

elsewhere

• The associated cost of

wastewater treatment and

reuse has proven to be feasible

in many countries worldwide

� The reuse of treated wastewater must be

established in all treatment projects.

� - Co-operation and coordination must be

established with all relevant stakeholders.

Principle of re use strategy in Palestine

established with all relevant stakeholders.

� - Flexible reuse plans should be developed to

enable the reuse and storage in winter season

and when the effluent quality drops below the

standards.

� - Establish planning tools (Regulations,

Standards, Guidelines, etc.) for reuse and

recharge

� Discharge to the surface water may be

considered as an interim action, or if reuse is

not feasible.

� - Irrigation of crops eaten raw is prohibited,

enforcement means should be applied.

Principles….

enforcement means should be applied.

� - For better water quality and reuse efficiency,

consider (i) mixing of treated effluent with

urban and surface runoff, (ii) artificial recharge

of groundwater with treated effluent

wherever possible, and (iii) establish surface

storage of treated effluent with or without

harvested runoff.

� Allow private sector and/or public to manage

or share the management of wastewater

reuse projects.

Principles…..

� - Develop a program for modifying use habits

to include reuse of treated effluent in urban

centers (greening, fountains, urban parks and

landscape irrigation forestation, and other

areas).

� Lack of adequately trained human resources;

current institutional bottlenecks in

WW reuse

� Unclear designation of responsibilities

between stakeholders with a tendency of

insufficient delegation;

� Low level of enforcement - due in particular to

the insufficient number of inspectors, the lack

of monitoring data and equipment, and

conflicts in allocation of regulatory conflicts in allocation of regulatory

responsibilities, plus a culture of producing

data without analysis Legislative change will

not have any effect if enforcement is not

improved;

� Insufficient awareness of issues related to

wastewater; and

� • Lack of a separation of governance functions

from service delivery.

planning, licensing and currently

implementation of water

related projects and infrastructure.

Palestinian Water Authority (PWA):

Agricultural PolicyMinistry of Agriculture (MoA):

protection of all elements of the

environment

Environment Quality Authority (EQA):

Main Institutions Involved in the WWT

and Reuse

physical planning for the expansion

of the built-up areas.

Ministry of Local Government (MoLG):

control and

monitoring of potable water quality, food

quality, wastewater related diseases,

Ministry of Health (MoH):

accreditation to standard measures and

specifications for wastewater qualities

and re use

Palestinian Standards Institute (PSI):

main source of

information

Palestinian Central Bureau of Statistics

(PCPS):

� expand the sewage systems in order to

increase population coverage,

� to expand sewage treatment in order to

reduce water pollution and public health, and

primary objectives of the public sector with respect to

private sector participation

reduce water pollution and public health, and

to provide better quality of service.

� to ensure higher operating efficiency and to

finance the system without public subsidies or

guarantees

� service and management contracts, in which

the government retains ownership and full

responsibility for financing, commercial risks

and other vital functions.

� On the other end of the spectrum the

contractual relationship possibilities

� On the other end of the spectrum the

government delegates some responsibility to

the private developers through a lease, a

concession, Build-Own Operate Transfer

(BOOT)/BOOS arrangements, or

� complete transfers of ownership through

divestiture.

Problems with PPP Projects

Many PPPs fail or never achieve

financial close -why?

• Change of policy or personnel by

GovernmentsGovernments

• Commitments required from

Governments prove to be more

than can be accepted

• Long delays mean that projects

become irrevocably stalled

• Change in circumstances or

appetite for bidders

Problems with PPP Projects

• Many PPPs fail after achieving

financial close

• Cost of construction exceeds

expectationsexpectations

• Revenues fall short of

expectations

• Economic factors (example:

currency devaluation)Problems

with PPP

Problems with PPP Projects

• Bidding for PPPs and financial closure of projects

(BOT) invariably time-consuming and expensive

• Costs of preparing bids

• Opportunity costs for senior managers

• Advisers fees and related expenses• Advisers fees and related expenses

• Low success rate / high risk of failure

• Often enabling legislation is not in place

• Few real operators (contractor dominated)

• Lack of discipline or commitment by

Governments

Problems with PPP Projects

Bidders/investors often frustrated by:

• Indecision from Governments

• Poor documentation

• Changes in the timetable or • Changes in the timetable or

process

• Slow decision-making or

inflexibility

• Lack of support at senior levels

• PPP projects compete for investors

time and money

How should Government be involved?

• Select proper and experienced

advisers to the Government

• Perform the feasibility study,

• Fund, and actively participate in• Fund, and actively participate in

the preparation of the project

documents

• Ensure truly commitment to the

project, and understands what

will be required of it

How should Government be involved?

• Close monitoring and follow-up is

probably best during the negotiation

of the project agreements

• Encourage Investors to make prompt• Encourage Investors to make prompt

decisions

• Close involvement in the review and

evaluation of bids, negotiation of

agreements, closing the financing

• Participate as needed on high levels

How and How much should Government

contribute?

Two methods can be used:

� A discounted cash flow analysis shall be performed to assess the projects’ ability to generate revenue to cover ability to generate revenue to cover costs without a grant

and specifically what percentage of capital costs can be covered. The grant represents the ‘financing gap’ between forecasted

revenue generation and required revenue generation.

• Calculation of the Internal Rate of Return if this is

below an acceptable level, then the grant contribution

should represent that amount required to raise the IRR

to an acceptable level