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Technical and Economic Assessment of Environmental Mitigation Measures. Kyiv Vodokanal

Note: Return to reference manual view.

Sources of Information

During the site reconnaissance phase of the work, many references were made available to the Assessment Team. These references have been used as they are applicable to the objectives and scope of the project. Although information from these references my be included herein, such information has been attributed to their source as clearly and concisely as possible. The objective of our project is to facilitate the financing of projects at sources of pollution in the Dnieper River Basin with the ultimate goal of improving the environmental quality in the basin itself. In so doing, we have attempted to summarize existing information in the context of these objectives and goals, and avoid any duplication of effort. Any decisions regarding investment in projects proposed herein should be based a review of all referenced documents. With respect to KVK, extensive assessments, analysis and estimates have been conducted in advance of the current program including the Phase 1 prioritization. These sources of information are described below.

Danish EPA

 

3.1. Danish EPA

 

The Danish Environmental Protection Agency (DEPA)’s “Feasibility Study for the Renewal and Modernisation of the Kyiv Vodokanal” was prepared in January 2001 by COWI in associate with Severn Trent Water International and OKO United Consultants.  The project and its resulting documents will be referred to as “the Danish Feasibility Study” hereafter in the text. 

 

In 1994, DEPA established an agreement with the Ukrainian Ministry of Environment and Energy to assist efforts related to environmental management protection.  In 1998, DEPA committed to assisting KVK in their efforts to renew their water supply and wastewater systems and modernize their organizational and financial management systems.  The first element of this assistance was an Identification Study which was conducted in 1999.  Based on the results of the Study, a full feasibility study was implemented. 

 

The results of the work comprise five reports as follows:

 

- “Final Programme Report, Project Document and Project Catalogues & Terms of References, Draft Version, September 2000 and final Version, January 2001”;

- “Working Document No. 3-Reform and Corporate Development, July 2000”;

- “Working Document No. 2-Strategic Plan, May 2000”;

- “Working Document No. 1-Exisitng Situation, Main Report and Appendices, March 2000”; and,

- ‘Inception Phase Report-Institutional Reform Concept, January 2000”.

 

The overall output of the report was a fully justified, financially viable, consolidated development program for KVK comprising institutional, financial and operations reforms as well as strategic short-term and long-term plans for capital investments.  The study team comprised COWI, Consulting Engineers and Planners (Denmark), Servern Trent Water International (UK), Accent Marketing & Research (UK), OKO United Consultants (Ukraine).  Involvement of KVK staff was reported to be extensive.  The reports are referenced in the text as described in Appendix A.

 

All of the reports identified above were provided to the study team.  They were invaluable in supplementing the information gathered during the site reconnaissance and staff interviews.

Nicolas Heinen Report

On behalf of Aarsleff A/S, the consultant Nicolas Heinen prepared a draft report entitled “Study for the Partial Renewal and Modernisation of the Bortnicheskaya WWTP and Improved Treatment Performance and Energy Savings”. The draft report was made available to the study team.

Other Sources

3.2.1. Other Sources

 

A number of statistical resources were used to obtain key population and economic data.  These included the International Centre for Policy Studies (www.icps.kiev.ua) and the US Governments’ Energy Information Administration (www.eia.doc.gov).  The latter summarizes reports from the Economist, Ukraine Business Journal and other key international research offices. 

General Description

General Description of Facility

5.1. General Description of Facility

 

Municipal wastewater in Kyiv is provided by the Bortnichy Wastewater Treatment Plant (hereafter the BWTP), which is the subject of the assessment. This large complex is located on the east bank (left bank) of the Dnieper River, southeast and downstream of the city centre. The facility is part of Joint Stock Company (JSC) KyivVodokanal which includes the treatment and distribution of water as well as the collection and treatment of wastewater in Kyiv.

 

Service Population: The city, with an area of 836 km2, has a population of approximately 2,640,000 of whom 2,367,000 are connected to the sewage collection system. The BWTP receives effluent from both residential and industrial sources. Based on residential water consumption, the total amount of wastewater discharged to the BWTP from the residential population was estimated to be 473.6 million m3 in 2001.

 

Industrial Users: Approximately 300 industrial enterprises of Kyiv are connected to the BWTP. These include food processors, engineering works and electronic industries. Approximately 65 enterprises have pre-treatment operations before wastewater is discharged to the municipal system. Generally, the pre-treatment operations include physical and chemical treatment technologies.

 

Collection System: Most of the sewage network was constructed or reconstructed during the last 50 years. The pipes are made of ceramic, steel, pig iron and asbestos cement. Primary sewage pipelines are concrete-construction. Over 1,150 km of pipelines are ceramic, which are resistant to corrosion and mechanical wear, but sensitive to uneven soil settlement. The pumping stations serving the collection network equipped with basic physical treatment (mechanical rakes or screens (16-mm mesh)).

 

Treatment Systems, Wastewater: BWTP is a traditional activated sludge plant comprising three, parallel lines with design capacities of 600,000 m3/d. The treatment lines were commissioned in 1965, 1976 and 1988 and consist of the following components:

 

- Inlet chambers;

- Screen facilities (reciprocating rake type);

- Grit chambers (horizontal, rectangular, aerated- type);

- Primary clarifiers (circular, primary sedimentation tank);

- Aerated activated sludge tanks (contact stabilization process configuration) and associated air blower buildings;

- Secondary clarifiers (circular, secondary sedimentation tank).

 

Technical details of each of the above (size, capacity, etc.) are included in Appendix B.

 

Wastewater is discharged from two locations into a 7 km long channel that leads to the Dnieper River. The effluent from Lines 2 and 3 passes through a series of baffles before discharge to the channel, which is lower than the Dnieper water levels at the outlet. At the end of the channel, water is pumped to the Dnieper River by way of five pipes that are spaced across the river’s width to extend the size of the mixing zone.

 

The COWI Feasibility included an assessment of the facilities at the BWTP. With few exceptions, the assessment of all of the facilities of Line 1, constructed in 1986, were rated as very poor with severe deterioration and requiring immediate replacement or repair. The facilities of Line 2, constructed in 1975, were rated to be in poor condition, with function and appearance significantly affected by deterioration. Remedial action was stated to be required as follows:

 

- mechanical and electrical equipment within 2 years;

- structures, buildings and pipes within 5 years; and,

- other pipes within 10 years.

 

The facilities of Line 3, constructed in 1994, were rated as adequate, with deterioration being mainly visual, only having minor affects on function. Remedial action was stated to be required as follows:

 

- mechanical and electrical equipment within 2 to 5 years;

- structures, buildings and pipes within 5 to 10 years; and,

- other pipes within 10 to 20 years.

 

Details regarding the above can be found in Reference 4, Appendix 7.

 

The field work for the current program was carried out three years after the COWI field assessment and the conditions of the facilities were observed to be even more problematic. The conditions of facilities of Line 1 are particularly worrisome with the Line 1 Pumphouse requiring immediate attention.

 

Treatment Systems, Sludge: Primary sludge from each treatment line is pumped to thermophilic anaerobic sludge digesters (commonly called “methane tanks”) to eliminate pathogens and generate natural gas used as fuel for the facility heating station. The digesters comprise two sets of four tanks commissioned in 1965 and 1975. The set commissioned in 1975 is not in operation (poorly constructed).

 

The sludge from the digesters is pumped to sludge lagoons located off-site at two separate properties, one 9 km to the southeast and the other 15 km in the same direction. Some of the sludge is taken to new sludge centrifuges for mechanical dewatering prior to being trucked to the sludge lagoons. The capacity of the centrifuges is sufficient to dewater all primary sludge (Reference 3, Appendix 5.8, page 9), however funding for the polymers required is problematic.

 

Surplus activated sludge from the secondary clarifiers of each line is pumped to a centralized secondary sludge treatment area for thickening, aerobic stabilization and final thickening. The resulting sludge is pumped to the sludge lagoons. The system was supplemented with polymer addition to improve performance (reduce sludge volume/water content and reduce dissolved solids in the effluent) but, again, funding for the polymers required is problematic.

 

The remote sludge lagoons are reported to be near capacity with over 3 million cubic metres of sludge present. The reject water from the lagoons, which is pumped back to the BWTP for treatment, has a high suspended solids content because the lagoons do not working optimally when close to capacity. Sludge was previously applied to agricultural lands as fertilizer but farms in the vicinity cannot provide transport for sludge delivery and KVK does not have such transport available. Much of the sludge contains heavy metals in concentrations too high for agricultural application. One lagoon has been isolated as the sludge contents contain radionucleotides from the Chernobyl accident.

 

Technical details of the facilities described above (size, capacity, etc.) are included in Appendix B.

 

The COWI feasibility study rated the condition of the sludge treatment facilities to be in poor conditions as described above, with only one exception (sludge dewatering systems). This included the thickeners, digesters, gas storage tanks and sludge drying beds. The dewatering systems being newly supplied, were rates to be in good condition (Reference 4, Appendix 7).

 

The site reconnaissance of the current program verified the conditions observed by COWI. No large-scale restoration or new construction has been undertaken since the COWI study although some pilot projects are underway with respect to sludge drying (German Project).

 

Other Facilities: The large complex has numerous ancillary facilities including offices, workshops, garages and other structures. An on-site laboratory provides process and quality control by analyzing key effluent characteristics.

 

With respect to the internal pipelines, facility buildings, workshops, garages and laboratory, these facilities were rated between adequate to poor by the COWI feasibility study. The ratings tended to reflect their year of original construction (Reference 4, Appendix 7). No significant restoration has been undertaken regarding these facilities and their priority is considered low relative to more pressing maters respecting those facilities directly related to wastewater treatment and sludge management. There current condition of these facilities noted during the current project’s reconnaissance was observed to be similar to reported by COWI.

 

Plans for Rehabilitation: KVK has engaged the Kyiv Design Institute, who prepared the original design for the construction of the facility, to prepare a plan to rehabilitate Treatment Line 1. The plan, which is now being reviewed by authorities, is estimated to cost approximately $500,000 (2004 USD). Some of the projects proposed herein are included in this rehabilitation plan. It is uncertain whether funds will be available to implement this plan.

Impact on Water Quality

5.2. Impact on Water Quality

 

The COWI Feasibility Study reported the following effluent quality criteria based on 1999 data and compared to the temporary effluent standards in place in 2000 (Table 5.2.1 below). The official standards identified are the receiving-water quality-based standards. The effluent quality results are based on the weekly measurements conducted by KVK.

Table 5.2.1. Effluent Quality (1999) and Present Effluent Standard (February 2000)

 

Parameter

Effluent Quality (1990) mg/L

Temporary

Standard mg/L

“Official” Standard

mg/L

Minimum

Average

Maximum

Suspended Matter

7.0

12.1

17.2

15.0

9.0

BOD5

2.9

5.3

10.2

15.0

4.2

COD

38.1

63.4

98.9

80.0

30.5

Inorganic Material

324

417

506

520.0

520.0

Chloride

38.3

52.8

78.0

90.0

84.4

Sulphate

47.4

55.4

63.0

90.0

90.0

Ammonia-N

0.36

2.48

5.04

4.63

0.62

Nitrite-N

0.11

0.36

1.01

0.4

0.024

Nitrate-N

1.39

3.00

5.96

6.0

0.08

Phosphate

1.45

4.28

6.47

5.52

0.11

Oil Products

0.12

0.68

0.25

0.10

SPAV (Solvents)

0.5

0.16

Chromate (Cr+6)

0.005

0.010

0.028

0.02

0.006

Iron

0.28

0.40

0.49

0.46

0.22

Copper

0.007

0.023

0.02

0.006

Zinc

0.001

0.018

0.056

0.07

0.07

 

Reference: Ref 4, page 7-8. Bold: Exceeds temporary standards; Italics: Exceeds “official” standard.

 

As can be seen in the table above, the maximum and average concentrations for many of the parameters tests (average: 11 of 15) exceed the concentrations stipulated in the official standard. With respect to the temporary standard, many maximums exceed the stipulated values (8 of 15) but on average, concentrations are compliant.

 

Although final effluent quality complies, on average, with European regulatory standards, it does not comply with the stricter receiving water quality-based standards adopted by the municipality. These standards are not attainable for conventional secondary wastewater treatment plants (Ref 5, Annex 6, page 26).

 

The results of the first phase of the UNIDO work indicated that KVK ranks highest among major polluting sources within the Ukrainian part of the Dnieper Basin, both in terms of individual indicators and its weighted score.

 

Loading data for key parameters for BWTP are shown below:

 

Table 5.2.2. Treated Wastewater Effluent Loadings for BWTP

 

Data Type

1999 Data

2000 Data

Wastewater discharged with treatment

504,100,000 m3/yr

492,000,000 m3/yr

Wastewater discharged without treatment

28,800,000 m3/yr

23,250,000 m3/yr

Total BOD

4,545 tonnes/yr

4,677 tonnes/yr

Oil Products

5.70 tonnes/yr

8,620 tonnes/yr

Suspended Solids

10,270 tonnes/yr

7,036 tonnes/yr

Dry Residue

86,880 tonnes/yr

7,036 tonnes/yr

Sulphates

15,530 tonnes/yr

15,340 tonnes/yr

Chlorides

20,190 tonnes/yr

21,330 tonnes/yr

Ammonia nitrogen

1,007 tonnes/yr

1,157 tonnes/yr

Nitrates

5,387 tonnes/yr

4,677 tonnes/yr

Nitrites

No information provided

4,677 tonnes/yr

Surfactants

No information provided

0.94 tonnes/yr

Iron

No information provided

54.12 tonnes/yr

Copper

3.32 tonnes/yr

4.22 tonnes/yr

Zinc

9.0 tonnes/yr

8.44 tonnes/yr

Nickel

No information provided

8.44 tonnes/yr

Hexavalent chromium

4.74 tonnes/yr

5.62 tonnes/yr

 

The estimated contribution of KVK to the total volume of wastewater discharges in the Dnieper Basin was 8.47%. Priority contaminants contributed by KVK to the total pollution load entering the surface waters in the Ukrainian part of the Dnieper Basin are chromium, copper, ammonia nitrogen, zinc, BOD, nitrates, and oil products.

 

During Phase 1 of the UNIDO program, the Project Team assessed the impact of the KVK on the Dnieper ecosystem, using monitoring data collected by the State Hydrometeorological Service of the Ministry of Environment and Natural Resources of Ukraine in the upstream (1.5 km) and downstream (0.5 km) sampling locations on the Kaniv reservoir. This included reviewing historic monthly data with respect to the concentration of major metal ions, nutrients, organic compounds, heavy metals, phenols, surfactants, and oil products of the samples from these locations. This review indicated that there is a trend toward higher concentrations of these pollutants in water of the Kaniv reservoir, both within the City boundaries and at a distance of 6 km downstream.

 

Table 5.2.3. Comparison of Upstream and Downstream Water Quality

 

Characteristic

Upstream

In City

Downstream

Change

Dissolved Oxygen

11.3 mgО2/dm3 (104% saturation)

10.8 mgО2/dm3 (97% saturation)

10.8 mgО2/dm3 (97% saturation)

- 5%*

Sulphate

11.0 mg/dm3

No values given

13.3 mg/dm3

+ 21%*

Chloride

20.5 mg/dm3

No values given

21.8 mg/dm3

+ 6%*

Mineralization

280 mg/dm3

308 mg/dm3

315 mg/dm3

+ 12.5%*

Ammonia-N

0.18 mgN/dm3

0.20 mgN/dm3

0.25 mgN/dm3

+ 39%*

Nitrite

0.01 mgN/dm3

No values given

0.02 mgN/dm3

+ 200%**

Nitrate

0.27 mgN/dm3

0.32 mgN/dm3

0.27 mgN/dm3

+18.5%**

Oil Products

No values given

0.01 mg/dm3

0.07 mg/dm3

+700%***

 

Note:

Year 2000 results (mean annual);

* – upstream to downstream;
** – upstream to in city;

*** – in city to downstream.

 

Similar patterns occurred amongst the data respecting phosphates, zinc and copper.

 

Impact on Biodiversity

5.3. Impact on Biodiversity

 

The Dnieper River Basin and its receiving water body, the Black Sea, are under significant stress from human activities throughout the basin. Discharge of effluents from point sources of pollution is only one of many sources of impact and, from the perspective of biodiversity, these point sources are not the most significant stress. One symptom of the stress in the basin is eutrophication of the reservoirs that comprise much of the lower Dnieper including those upstream and downstream of Kyiv. Eutrophication is caused by the presence of excessive amounts of nutrients, phosphorus and nitrogen in particular, which leads to algal blooms. These algal blooms increase water turbidity and decrease oxygen content, thus slowing natural recovery processes, degrading fish habitat and having a negative impact on drinking water supplies. Eurtophication of the Kanevskoe Reservoir, downstream of Kyiv, is caused by excessive nutrients from upstream sources.

 

The BWTP is a source of phosphorus and nitrogen. COWI estimated that the increase in background phosphorus and nitrogen levels in the river caused by BWTP would be on the order of 5% to 10% if stormwater was included (Reference 1, Section 9-9). Although BWTP specifically and Kyiv in general may not be a decisive source of the precursors and eutrophication, they are significant sources.

 

The proximity of KVK effluent discharges from the perspective of officially protected areas is limited as follows:

 

- Kanivsky wildlife sanctuary, distance from discharge point: 120 km;

- Romanivske Marshes Reserve, distance from discharge point: 10 km;

- Kozynsky Reserve, distance from discharge point: 8 km;

- Lisnyky Reserve, distance from discharge point: 4 km;

- The Golosiivsky National Park , distance from discharge point: 4 km.

 

A planned expansion of the Golosiivsky National Park will incorporation the mouth of the Vita River at the confluence with the Dnipro River. This area is considered unique from the perspective of biodiversity and, along with the Dnipro islands, is a valuable spawning areas for many fish species, nesting areas for waterfowl, and for riparian animals.

 

In the immediate vicinity to the Hot Spot, there is a unique mouth area of the Vita River and numerous Dnipro islands with the water bodies inhabited with many rare water plants species, and aquatic and riparian animals. Adjacent areas are also popular for recreational activities such as picnicking, fishing and hunting.

 

Cases of numerous fish kills are periodically observed and have a variety of causes including summer and winter fish kills, as well as the turbines of the Kyiv Hydro Power Plant.

 

 

 

Technical Issues

5.4. Technical Issues

 

The lack of automatic monitoring of control parameters constrains treatment performance. For example, the absence of monitoring devices for dissolved oxygen in the aeration tanks results in significant variance from optimum DO levels (4 mg/l instead of the effective level of 2 mg/l). This can result in excessive energy usage and associated expenses in this example or in other areas, inadequate treatment (Ref 5, Annex 6, pg. 26).

 

The processes are not automated and adjustments are made manual under the direction of the Chief Engineer based on the results of sample analysis conducted by the on-site laboratory. Flow measurement and control is limited so such adjustments are restricted.

 

Economic Situation

5.5. Economic Situation

 

The BWTP infrastructure is in poor shape – especially for a utility serving a population of 2.7 million and the country’s capital industry – and requires immediate modernization. With the last major renovations/upgrades over fifteen years ago, and traditional approaches for management and upkeep of public utilities of this magnitude dictate constant investment, the priority of modernizing this key civic asset is critical. The following outlines a range of key concerns. A comprehensive list of challenges and concerns of KVK are identified in a table later in this section.

 

Based on preliminary screening of Hot Spots on economic criteria for Phase 1, among candidate sites, KVK was determined to (scores indicate relative severity of problem based on qualitative data and professional judgement):

 

- Have a negative impact on the downstream water supply (Score 60 out of 100)

- Have an average cost of treatment for drinking water higher than the national average cost of treatment of drinking water. (Score 70 out of 100); while the average cost for treatment of individual water was higher too. (Score 55 out of 100).

- Require the highest level investment to meet EU water standards. (Score 50 out of 100)

- Incur the highest loss of available land due to its sludge drying beds (Score 100 out of 100).

- Based on Macroeconomic criteria, make a substantial contribution to the national economy; and

- Due to serving Kyiv’s working population, make a substantial contribution to regional industrial employment.

 

Beyond this preliminary assessment, almost all of treatment elements the BWTP, from intake to sludge management, require upgrading. Beyond the country’s exisiting economic position, much of the problem lies in former accounting systems and business practices that did not allocate funds for capital maintenance, upgrades and re-investment. As such, with Ukraine’s move to a market economy and utility’s designation as a joint stock company, the KVK, and especially the BWTP, have inherited a challenging financial position. Even increased reinvestment efforts are inadequate.

 

KVK’s has increased its rate of capital reinvestment as a percentage of total fixed assets. In nominal terms, and as a percentage of the remaining book value, KVK’s rate of capital reinvestment has increased from 1.5% in 1996 to 4.7%. In constant terms, and as a percentage of the estimated current replacement cost, its rate of capital reinvestment has increased from 0.41% in 1996 to 0.52% in 1999. Despite these efforts, the level of capital reinvestment is only equal to roughly 1/5 of the level of technically recommended to appropriately maintain their existing assets and service levels. Combined with an inadequate level of maintenance and repair, which has been estimated to equal approximately 1/3 of that technically recommended, KVK’s facilities have generally deteriorated such that the existing level of service will be difficult to maintain without major injections of capital reinvestment in the near to medium term future1)”.

 

This financial position has forced the KVK to prioritize its key investments. It has led the utility to review all aspects of its operation to determine strategically where emphasis should be placed to improve the solvency of the entire operation. A study funded by the Danish Environmental Protection Agency2) noted that the major financial gains were to be found on the supply-side (i.e. distribution of water). In fact, the study recommended that “environmental” concerns accounted for only 15% of the weight in ranking of projects. (“Maintaining System Reliability” and “Improved Knowledge of Facilities” were higher ranked criteria). However, there are challenges with the supply side relative to the entire operation of the Utility:

 

“KVK’s financial performance has deteriorated over the past four years. It’s operating margin has fallen from 26% in 1996 to <1% in 1999, in part as a result of a 72% increase in its total cost of operations, and it has experienced increasing losses over the last two fiscal years. While m3 sales have declined by 6%, UAH sales have increased by 30% as a result of tariff increases. However, UAH collections have not kept pace, and KVK’s collection rate has fallen by 18% of current sales or 60% of total outstanding collections. As a result, KVK’s ability to service immediate and short term obligations is increasingly at risk, and in 1999 its cash requirements exceeded cash in-flow from operations.”

 

While greater revenue generation has been determined to be a desirable objective, there have been problems associated with its pursuit. As indicated in our discussion while on our site visit in October 2003, the National Government approved a rate structure that allowed water utilities to charge rates to cover operational costs plus 20%. This 20% charge was supposed to be earmarked exclusively for re-investment in water treatment. However, the public have been feeling the crunch of the cost of living rising much more rapidly relative to wage growth.

 

“Kyiv City covers 836 km2 and had a 1999 population of 2,626,000. In recent years the population has decreased slightly, but it is expected that the population growth will soon start to increase again.

 

Household incomes are low with an average monthly expenditure of about 138-157 UAH/person/month2, payment for water services compromises a high proportion (about 4.8%) of the average expenditure. Although there is an expressed willingness by consumers to pay up to about 50% higher tariffs if 24 hours water supply is maintained and the water quality is improved, the current payments must be assessed as close to the absolute maximum affordable level.

 

Water is paid for by the consumers by the norm figure (300 lcd) although the Housing Associations are billed the actual consumption (estimated 347 lcd).”

 

Due to public pressures, the Government now has restricted utlities’ ability to raise water tariffs. With electricity rates that have grown substantially over the last ten years, it is anticipated that such restrictions will remain for the immediate future. In fact, one of the main costs facing KVK is energy – thus, while subject to higher electricity costs, they are unable to pass these higher costs back to industrial, residential and institutional users.

 

Regulation and enforcement continues to impede the financial performance of the facility. In fact in the first eight (8) months of 2003, the BWTP paid 601,700 UAH in taxes, plus fines in the form of discharge fees. The latter is also a substantial cost to the facilities operation. The Government collects these fees as required, but, due to other economic pressures, does not redirect them to their earmarked environmental protection measures.

 

Another dimension to the pressures faced by the KVK is residential water usage. The Danish EPA funded study identified that the daily household consumption (347 lcd) is more than two times the rate of Western and Eastern European norms. The habits of residents dictate a preference for running water. Hence, little is done at the household level to conserve water. Any demand-side encouragement such as public education programs (combined with prescribed metering) would likely alleviate the volume of wastewater requiring treatment.

 

While the overall economic situation for KVK is particularly challenging, the status of the BWTP is critical. Due to the plant being the primary city facility for treating residential, industrial and institutional wastewater, its inefficient operation will continue to discharge contaminated water in to the Dnieper River. The plant, at present operates at a loss due to the lack of revenue and substantial energy and treatment costs. Should the existing operation situation be maintained, these losses will increase substantially for years to come as Kyiv’s population and industrial production grows.

 

Thus, beyond programs such as encouraging industrial water users to reduce their discharges, given the focus of reducing pollution into the Dnieper River, the primary objective for KVK with respect to the BWTP, is to adopt energy efficient sustainable processes. Such processes should focus on reducing operating costs, and whose savings could be redirected to improved maintenance and cover the cost investment, independent of other actions undertaken by the rest of KVK and regulating authorities.

 

 

_________________________

1) – Findings of the evaluation of KVK’s financial position as at December 31, 1999, and its financial performance over the last four years starting 1996, are detailed in Chapter 12 of the Working Document No. 1 – Existing Situation.

2) – “Renewal and Modernization of the Kviv Vodokanal – Working Document No. 3 – Reform and Corporate Development”, COWI, July 2000

Summary of Challenges faced by KVK

 

5.6. Summary of Challenges faced by KVK

 

As identified in COWI Study

 

Challenges

Institutional and Financial

Technical

Key Issues/ Concerns

- Less developed framework for regulation of public or privately owned monopolies;

- Current tariff procedures (and levels) not adequate;

- Complex – confusing and possibly legal questionable present organization of KVK (comprising of 17 departments/ enterprises;

- Lack of any real long term forward planning or cost effective investments, selection and implementation; most activities are concentrated on solving day-to-day problems;

- Diffused responsibility of management and a reluctance to delegate the required authority to managers at each level of command;

- Lack of fast, meaningful, Management Information and control systems;

- Low operational staff productivity, typically 5-15 times lower than international water utilities;

- Excessive energy costs;

- High staffing levels (>6,600) and low salaries (average 40 USD/month);

- Serious financial situation deteriorating over past four years. In 1999 KVK experienced an operating loss of 31 million UAH (corresponding to 15% of sales);

- Profitability and liquidity seriously deteriorated over past four years;

- Collection rate for domestic consumers expected to be about 80%; and

- Not sufficient expenditures on maintenance (presumably about 0.4%-0.6% of the estimated replacement value).

- Large domestic unit water demands (347 lcd; more than 2 times typical average Western and Eastern European figures);

- Large unaccounted-for-water, hereunder lack of pressure zoning;

- Some water quality problems (seasonal content of organic matter, and coliform bacteria present in many samples (but only very few samples above the norm));

- Treatment problems (process problems at coagulation) at Desna and Dnipro surface water treatment plants;

- Large infiltration in the wastewater collectors;

- Large retention time in wastewater collectors creating a high degree of corrosion;

- Poor energy performance of major wastewater pumping stations;

- General lack of automation of Bortnicheskaya WWTP;

- Lack of adequate sludge disposal facilities;

- Dilapidated equipment and facilities, notably at the Dnipro WTP, the distribution network, the wastewater collectors (and expectantly in the foreseeable future, also pumping stations and rising mains), and Bortnicheskaya WWTP Line 1;

- Lack of individual metering of water;

- Lack of detailed knowledge of water and wastewater systems (lack of GIS and hydraulic models;

- Present organization with many “independent” enterprises makes overall planning difficult; and

- Lack of adequate maintenance of assets.

 

Economic Assessment of Proposed Mitigation Measures

In this section, proposed mitigation measures will be evaluated from an economic perspective. Measures will be assessed based on their ability to deliver a net economic improvement to the health of the Dnieper River, as well as associated measures of energy efficiency and improved financial performance. In reviewing the previous sections, a number of conclusions can be drawn that could lead to a preference for certain projects. One such conclusion, that is evident across all studies reviewed and interviews with plant staff, is that the more that solid matter (i.e. sand, grit and trash) that can be removed earlier in the treatment process, the more efficient the facility’s operation will be. Given the current state of the BWTP infrastructure and equipment efficiencies, immediate gains may be obtained from implementing better grit chambers and screens. Such initiatives would have positive impacts on subsequent treatment process, and result in savings on repairs and maintenance and some reductions in energy usage. However, as previously noted in Section 9, the goals of facility personnel do not always coincide with the goals of the Dnieper River Basin Strategic Action Plan. KVK, a designated Joint Stock Company, in seeking to improve operational efficiency and financial position and develop a sustainable system for the provision of services to its service population. This element of sustainability is well presented within the COWI Feasibility Study, where a number of principles of operation are identified. However, from an economic perspective, much of the focus of viability is on the supply-side in the distribution of water, primarily through better distribution (including metering), system monitoring and, critically, payment collections (for improved revenue generation). The thinking being that if these matters can be resolved, with greater financial viability, funds can be allocated towards reinvestment in infrastructure. However, reiterating the goal of Dnieper River Basin SAP is “to improve the water quality of the basin, encourage biodiversity and mitigate adverse impacts on trans-boundary water systems.” In Section 9, it was identified that two projects1) would have direct benefit to the Dnieper Basin. Earlier analysis (Phase 1, Chapter 10) indicated that airing system was a priority. It is noted that all projects, on one form or another, will have a benefit to the improvement of discharges into the River. With this focus, the following economic assessment was prepared. _________________________ 1) – From Danish EPA funded Study, Projects: (1) WWT-11A: Secondary clarifiers of Line 1, Phase 1; (2) WWT-7A: Aeration Tanks of Line 1, Phase 1.

Review of Studies on Modernisation Projects

10.1. Review of Studies on Modernisation Projects

 

Based on studies and feedback provided by KVK, there are four main sources of information on potential projects for the BWTP.

 

“Feasibility Study for the Renewal and Modernization of the Kyiv Vodokanal.” COWI in association with Severn Trent Water International and OKO United Consultants, Jan. 2001.

 

“Study for a Party Renewal and Modernization of the Bortnicheskaya WWTP and increase in treatment performance and Energy Saving.”  Nicholas Heinen Der Aarsleff A/S (NHPA).

 

Feedback on Planned Projects, provided by KVK staff (V.O. Yakolev, External Relations Department) to SNC-Lavalin’s site visit questionnaire (Dec. 2003)

“Dnieper River Basin Strategic Action Plan – Phase 1, Hot Spot Identification.”  Chapter 10, prepared by Mr. Yuri Andreichenko, National Expert on Economic Issues, 2003.

 

While the estimates and benefits vary among these sources, there are many consistencies in the course of, and priority of actions to be undertaken.  The following is a brief review of each of the programs identified by each source.

 

COWI Feasibility Study:

As previously identified, the Danish EPA funded feasibility identified thirteen (13) projects that apply directly to the BWTP.  These projects are summarized in Table 10.1.1 with their associated identified benefits.  Base of information obtained, no specific reductions in pollution parameters or energy savings were identified.  At the time of publication the total required investment in these projects was $10.7 million USD.  These are based costs an assumed to include capital and labour and all associated construction elements.  While an additional 30% in project contingencies – 5% for physical, 10% for price and 15% for financing cost during implementation – the final cost estimate for these projects would be $13.91 million USD. 

 

For the two projects identified that would have a direct environmental benefit to the Dnieper Basin – WWT-11a and WWT-7A – would cost $2.635 million USD with 30% contingency, the investment would be $3.425 million USD.

 

Of note, in reviewing the financial analysis, the overall deduction proposed is to bring the operating ration down from 0.83 to 0.6 by 2002.  With the proposed investment, it is anticipated that there would be a peak return on assets of 14%.  In assuming debt, the debt ratio will increase but based on revitalized revenue generation, would be zero by 2020.

 

Table 10.1.1. Summary of Prioritized Mitigation Measures

 

DEPA Project No.

Project Description

Identified Benefits

Investment in USD (‘000s)

WWT-14

Monitoring equipment

- Better awareness of actual process conditions and performance that can be used to better treatment efficiency and process optimization.

- Reduction of aeration in the process tank and associated reduction in power consumption. 

- Labour Savings

$140

WWT-19

Grit chambers (Lines 2 & 3)

- More reliable and efficient treatment of wastewater.

- Resulting significant savings on repairs and maintenance, particularly with respect to cleaning the digesters and aeration tanks.

$280

WWT-1A

Screens, Phase 1 (Line 1)

- Increased performance of down-stream treatment processes and decreased wear on down-stream equipment.  - Installation of fine screens will improve the quality of sludge generated. 

- Minimization of worker hazard.

$275

WWT-13

Sludge digesters Nos. 1-4

- Digesters would have more reliable operations, lower repair and maintenance costs.

- Increased production of biological gas - reducing the cost of purchasing natural gas needed for heating. 

- Sludge would be more effectively stabilized.

$1,000

WWT-18

Sludge dewatering

- Eliminates rejection of sludge water - treatment will reduce operation costs, including electrical usage, as well as repair and maintenance of the pump equipment and pipelines associated with the reject sludge water.

- Savings on the polymers could be as much as $1.5 million USD/year

$1,000

WWT-26B

Sludge disposal, Phase 1

- Cost of the disposal of the settled sludge as well as the repair of sludge lagoon’s foundations and drainage systems can be significant.

$3,500

WWT-21

Return sludge pumps for Line 1

- Anticipated more efficient operation of the aeration tanks of Line 1, and improving the operational efficiency of the entire line. 

- Energy consumption, repairs and maintenance cost would be reduced and the number of breakdowns and emergency situations decreased.

$160

WWT-4A

Primary clarifiers of Line 1, Phase 1

- Improved efficiency of primary sludge removal

- Reduced load to the aeration tanks and secondary clarifiers (improving overall treatment efficiency)

- Reduced number of equipment breakdowns, operational and maintenance costs.

$950

WWT-11A

Secondary clarifiers of Line 1, Phase 1

- Increased efficiency (reduce suspended solids in the effluent, increased sludge concentration in the aeration tanks and generally improve the overall efficiency of biological treatment)

- Reduced number of equipment breakdowns, operational and maintenance costs

$975

WWT-20

Sludge thickeners

- Decreased operation costs by reducing energy consumption for sludge pumping

- Improved efficiency of the digester system that will result in an increase of gas production

- Decreased quantity of sludge generated, thus reducing the load on the sludge lagoons that would result in an improvement of the quality (suspended solids) of the reject water from the lagoons

$450

WWT-7A

Aeration tanks of Line 1, Phase 1

- Reduced costs associated with energy consumption, repair and maintenance. 

- Overall treatment performance would be improved including achieving stable nitrification. 

- Improved biological treatment by increasing the efficiency of oxygen transfer in the aeration tanks.

$1,660

WWT-3A

Grit chambers of Line 1, Phase 1

- Should ensure the optimal rate for sand removal, resulting in improved performance of downstream systems.

$110

WWT-25

Gas storage tank

- Digester gas utilization would be more reliable and efficient in the boilers. 

- Reduced need for supplementing the digester gas with purchased natural gas

- Reduction in biological gas emissions released to the environment.

$200

TOTAL VALUE OF PROJECTS

$10,700.00

 

Note 1:  The rank number was designated based on 40 prioritized subprojects of the proposed immediate investment program (IIP).  Reference 1, Page 11. 

 

 

Icolas Heinen Per Aarsleff A/S Study (Draft)

While less comprehensive than the Danish EPA study, the focus of this draft study was exclusively on the WWTP.  These projects are summarized in Table 10.1.2.  Cost identify include capital (identified as “Mechanical” and “Electrical” and “Equipment”) and civil work.  The latter is assumed to include all construction and labour in project implementation.  To implement all the identified projects would require approximately $23 million USD.  No contingency costs were identified.

 

A range of benefits were identified for selected projects – from removal of refuse by screen to reductions in BOD5, suspended solids and energy savings from the installation of blowers in the aeration tanks.  The report also explicitly identified environmental impacts after reconstruction (40% capacity) below.  It is assumed that this is a total impact based on the implementation of all identified projects.  And based on the optimization of one line being able to treat 40% of the actual load and based on annual flow of 473.9 million m3.

 

Environmental Impact

Benefit

Water Treatment

- Suspended Solids – average concentration will be probably maximum 10mg/L.

- BOD5  - average concentration in the outlet will be at least as the actual level.

- Nitrogen: will fulfill EU standards – max 10 mg/1 (about 7.0 tonnes /day).

- Phosphorus – will follow EU standards – 1.5mg/L (about 4.0 tonnes/day for 40% of total load)

Energy Savings

- Actual energy consumption of the plant is 170.02 million KWh/yr of which 60-65% is used in the aeration tanks.  This translates to 106.26 million KWh/yr.  40% of the total load aeration for identified load is 42.5 KWh/yr.  Based on new blowers and mixers for Bio – P, the new consumption will be 23.355 KWh/yr – a savings of 19.0 million KWh/yr.  (11.2% of all existing energy usage.

CO2 Emissions

- Based on reduced energy usage – 9,738 tonnes/year of CO2 based on electricity production of natural gas, or 16,245 tonnes/yr reduction based on electricity produced from coal.

 

The study included estimates of how investments in these projects will influence wastewater prices (on a m3 basis).  Based on 1999 tariffs, the net cost of investment (i.e. investment + interest – energy savings) would result in a 25% increase in tariffs. 

 

Table 10.1.2. Renewal & Modernization of Bortnicheskaya WTP (prepared by Nicolas Heinen Per Aarsleff A/S)

 

Project #

Project Description

Identified Benefits

Investment in USD* (‘000s)

NHPA-1

Screens – Install 6 mm screen in inlet to remove maximum quantity of refuse before primary settling and biological treatment.

- Reduction in solid & larger waste items entering into treatment cycle

- Line 1: Removal of 0.2 kg/m3 (5.6 tonnes per hour) – comprised of 35% dry matter.

- Note: Investment is necessary for Line 1, and suitable for Lines 2 & 3.

$1,118.7

(Euro 450,000 capital + Euro 400,000 civil work)

NHPA-2

Grit & Grease Removal: Correct grit removal in order to avoid an accumulation in the digesters + remove grease to avoid floating grease in primary settling

- Reduction in grit and grease in digesters and settling tanks

$1,801.7

(Euro 610,000 capital + Euro 920,000 civil work)

NHPA-3

Primary Settling Tanks – Re-use 8 primary settling tanks.

- Load reduction in primary settling (reduction – tones/year):

- Suspended Solids - 50% (24,914 tonnes/year);

- BOD5 – 24% (8,285 tonnes/year);

- Nitrates – 1.5% (58.44 tonnes/year);

- Phosphates – 1.5% (25.9 tonnes/year).

$2,386.9

(Euro 1,050,000 capital + Euro 977,000 civil work)

NHPA-4

Bio-P (Sludge Thickening): Modification of the return sludge and installation of mixers.

- Anticipated:

- Decreased operation costs by reducing energy consumption for sludge pumping

- Improved efficiency of the digester system that will result in an increase of gas production

- Note: Sludge production to ensure nitrification - 69.416 tonnes/day; Sludge to assure denitrification – 23.9 tonnes/day

$671.2

(Euro 420,000 capital + Euro 150,000 civil work)

NHPA-5

Aeration Tanks – Install 4 energy efficient blowers of 1000 kW (air flow 50,000 m3/h)

- Existing blowers on Lines 2 and 3 effect 1,250 kW.

- New blowers will save 20% energy cost.

$6,441.3

(Euro 4,290,000 capital + Euro 1,180,000 civil work)

NHPA-6

Final Clarifiers – Reuse and Installation of Final Clarifiers. Costs include upgrades of return and excess sludge pumping station.

- Anticipate:

- Increased efficiency (reduce suspended solids in the effluent, increased sludge concentration in the aeration tanks and generally improve the overall efficiency of biological treatment)

- Reduced number of equipment breakdowns, operational and maintenance costs

$5,375.6

(Euro 1,910,000 capital + Euro 2,655,000 civil work)

NHPA-7

Sludge Treatment: Upgrade primary digesters – Renew Pre-concentration digesters + Dewatering

- Opportunities to produce biogas

- Reduction of 9,966 tonnes/year of sludge after digestion.

- Reduces wear and improves efficiency of downstream treatments.

$2,084.3

(Euro 1,450,000 capital + Euro 320,000 civil work)

NHPA-8

Secondary Sludge Treatment

- As noted: “The final destination of sludge is an urgent priority because the decision is conditioning new investments for sludge treatment.”

- Yield of investment will dewater 22,006 tonnes of sludge to 20% dry substance – thus, reducing wear and improving efficiency of downstream treatments.

$3,116.6

(Euro 2,166,667 capital + Euro 480,000 civil work)

TOTAL VALUE OF PROJECTS

$22,996.3

 

 

KVK Staff Feedback

Prior to the Oct. 2003 site visit, KVK staff received a questionnaire requesting any information on planned projects.  Feedback from these projects is summarized in table 10.1.3.  Based on the information obtained, it is assumed all costs include capital and civil works.  The program identified eight (8) projects for the BWTP valued at just under $100 million USD.  No contingencies have been identified. 

 

It is noted that the “Upgrade of the 1st Unit of the BWTP” is a substantial project – over $61 million USD.  It is felt, based on the review of all documents, that a number of projects are grouped under the umbrella of this single project (including clarifiers).  Unfortunately, no breakdowns in project elements were received. 

 

Detailed benefits were identified for three of the four largest projects, and included:

- Substantial declines in four main polluting parameters – Ammonium nitrogen, Nitrates, Nitrites and phosphates. 

- Energy Savings

- Reduction in discharge fumes

- More efficient use of biogas for sludge treatment and power generation.

 

It is anticipated that projects identified and associated costs were based on the previous two studies and staff-developed engineering estimates. 

 

Table 10.1.3. Planned Projects Identified by KVK Staff

 

Project #

Project Description

Identified Benefits

Investment in USD (‘000s)

KVK-1

Upgrade of the 1st Unit of the BAS Wastewater Treatment Facility

- Projected reduction of pollution discharges in Dnieper River:

- Ammonium nitrogen – by 157 tonnes per year;

- Nitrates – by 4,400 tonnes per year;

- Nitrites – by 2,100 tonnes per year;

- Phosphates – by 256 tonnes per year.

- Projected energy cost reduction is $176,000 (UAH 942,000) per year.

- Reduction of fines imposed for pollution discharges by $14,000 (UAH 75,000) per year

$61,121.5

(UAH 327 million)

KVK-2

Improve Efficiency of the Organic Matter Removal Process and Energy Efficiency at the Bortnichi Aeration Station

- Projected reduction of pollution discharges in Dnieper River:

- Ammonium nitrogen – by 105 tonnes per year;

- Nitrates – by 2,978 tonnes per year;

- Nitrites – by 141 tonnes per year;

- Phosphates – by 172 tonnes per year.

- Projected energy cost reduction is $117,500 (UAH 628,280) per year.

- Reduction of fines imposed for pollution discharges by $9,300 (UAH 50,000) per year

$1,843.3

(UAH 9.86 million)

KVK-3

Purchase Control Equipment to Control the Processes of Wastewater and Sludge Treatment at the BAS

- Benefits identification underway

$1,443.0

KVK-4

Introduce up-to-date Mechanical Treatment System at the Rake-type Treatment Units

- Benefits identification underway

$570

KVK-5

Introduce Energy Saving Technology at the BAS Right-Bank Pump Station

- Projected energy cost reduction is $700,000 (assumed to be per year).

$2,200

KVK-6

Construct New Sludge Delivery Line to Transport Sludge Line to Transport Sludge to the BAS Sludge Fields

- Benefits identification underway

$2,851

KVK-7

Construct New Technological Line for Sludge Treatment and Heat/Energy Recovery from Biogas generated at the BAS

- Annual generation of biogas in the amount of 30 million m3 per year. Projected annual generation of electricity (8.0 MW/year) and heat (79,000 Gcal/year) will be sufficient to cover 40% of the Company demand for electricity, and fully meet its demand for heat energy.

$22,506

KVK-8

Construct New Sludge Dewatering Facility at the BAS (mechanical dewatering process)

- Benefits identification underway

$6,789

TOTAL VALUE OF PROJECTS

$99,323.8

 

Information Provided by: V.O.Yakolev, External Relations Department, KVK.

Phase 1 Assessment

10.2. Phase 1 Assessment

 

In Chapter 10 of Phase 1 of the Dnieper River Basin SAP a preliminary economic analysis of selected projects for the five-year period 2003-2007 was identified:

 

Reconstruction of Municipal Wastewater Treatment Facilities

Construction of the mechanical dehydration shop.  The sludge carts of the Kyiv wastewater treatment facilities with surface area of 320 ha accumulated 4,500 thou.m3 of sludge.

 

Composting of produced sludge reduces its amounts and yields a stabilized and disinfected product, suitable for arable land.  This measure is now already being implemented in a certain scope.  As for the sludge quality, it is important to implement wastewater quality measures. 

 

Airing System Reconstruction

Implementation of this measure will allow intensify nitrification processes in the biological treatment facilities and thus reduce the content of organic pollution, salts of ammonium, nitrites in the discharged effluents. 

 

Sewage System Reconstruction

The sites of the sewage system, constructed in the 60’s and 70’s, have now low reliability due to the leaking pipes and worn pum