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10.3.1. Assumptions
The following assumptions have been made to establish the boundaries for the analysis.
- Total Wastewater – the base quantity will be 473.6 m3/year (2001). This is consistent with quantities used in NHPA and the Phase 1 assessment.
- Assumed treated quantity will remain in the vicinity of 95% of the total wastewater arriving at facility.
- Operating Costs and Revenues – based on a hybrid of two sources. Operating Costs identified KVK staff for Jan-Aug 2003, were pro-rated by a factor of 1.5 to reflect operating costs for 2003. Revenues were developed from pro-rated figures provided by KVK staff plus an adjustment sum to total “Fees received for treatment” as identified in Phase 1 assessment.
- All costs identified are assumed to be 2001 constant dollars (including 2003 revenue and cost data identified above).
- All costs are presented in US dollars, and the exchange rate is assumed to be 5.35 UAH to $1 US.
- Despite negative population growth at the national level, Kyiv’s population is assumed to grow by 1% per year. Residential wastewater generation is assumed to increase at the same rate.
- Industrial growth is assumed to grow at a conservative rate of 6% (based on long-term growth forecast provided Ukrainian Economic Expert). Industrial wastewater generation is assumed to increase at the same rate.
- All costs and revenue will be indexed to the growth in wastewater treated. Cost efficiencies resulting from new technologies will be applied at the appropriate line item.
- The estimates of respective shares of residential and industrial wastewater generation varied substantially. For this assessment is assumed that industrial generation is approximately 20%. Thus, residential generation is just above 80%.
- No water conservation programs have been considered in this analysis.
- No industrial wastewater generation reduction programs have been considered.
- The timeframe for the analysis of investments is 2005 to 2014. It is assumed that investment can be made starting in 2004.
- As no detail financial statements were obtained, “Financial Position” is simply presented as the difference between total revenues and total operational cost. Capital investments are simply treated as a one-time expense.
- The discount rate used for Net Present Value (to assess values over ten year timeframe into a single 2005 value) is 10%.
Effluent loadings were developed from 2000 actual monitoring data, with residual parameters obtained from Phase 1 estimates presented in Chapter 10.
- Adjusted value per tonne of monopollutant (i.e. economic measure of damages resulting from wastewater discharges) is $495. The benchmark value for monopollutant in Ukraine is $275, which is adjusted by a factor of 1.8 for the Dnieper River.
- The opportunity cost associated with environmental damages is assumed, based on professional judgment by country Economic Experts, to be 10% of the total value of environmental damages.
- Total Energy consumption in 2001 was 170.02 million kWh, of which 62.5% usage was directly attributable to aeration tanks. For purposes of analysis, factors of energy usage are index to wastewater treated at facility, on a kWh/m3 basis. Any energy savings will be realized on “line item basis.”
- Energy prices (established for 2004) have been assumed to be 0.18 UAH per kWh in 2001 constant dollars.
- Energy costs, while embedded in “Operating Costs” are treated separately (as exact energy costs were not obtained).
- Estimates of carbon dioxide are based on either natural gas or coal generation. Reduction estimates have been generated as a supplement to energy saving calculation.
- No reduction in fines imposed for pollution discharges were considered due to the unavailability of information.
- A 30% cost contingency has been included.
- Projects are considered independent and the net impact is not necessarily cumulative (and thus net impact needs to be evaluated with potential benefits identified on the combined initiative).
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