Annex 3. The Priority Investments Portfolio

Up one level

Appendix 3.

PRIORITY INVESTMENT PORTFOLIOS

 Dnipro River Basin Investment Portfolios

 
1. DEFINING AN INVESTMENT PORTFOLIO

 
Within the context of an environmental initiative using a renewable resource, an investment portfolio is a combination of projects and programmes. It uses a variety of financial instruments and funding sources dedicated to mitigating the harmful effects of pollution, and establishing mechanisms and cleaner processes to ensure resource and environment sustainability in the most economically efficient and viable manner.

 
An investment portfolio is unique to a specific project. Depending on the objectives of a specific initiative, the portfolio approach identifies a number of projects and programmes whose collective implementation reduces the harmful effects of pollution, whilst promoting and deploying cleaner technologies and processes which are economically-viable.  The net effect is an integrated approach toward the sustainable use of a renewable resource in an environmentally efficient, yet economically-viable manner.

 

 

The following characterizes the fundamental elements in developing an (environmental) investment portfolio.

In addressing an environmental problem (such as in the case of the Dnipro River Basin, in addressing identified “hot spots”), the portfolio approach seeks to address primarily the “problem at hand” (i.e., “Repair Damages Resulting from Pollution” and “Implement New Technologies and Cleaner Production Process”). Thus, the main cause(s) of pollution are immediately addressed.

 
However, the portfolio approach goes beyond solving the immediate problem. Investment should also include projects that deal with ancillary pollution risks as well as addressing the efficacy and success of mitigating the main cause(s) of pollution. Opportunities for the development of downstream or upstream activities and associated businesses should be investigated, as the integration of these can add a valuable element to the financial viability of the overall undertaking. For sustainability, a legislative framework must be established through the enactment of legislation to protect and reinforce the objectives of such remedial actions. In addition, community and (public and industry) education initiatives must be undertaken to reinforce the benefits of the portfolio approach.

 
To ensure the ultimate sustainability of the portfolio approach, underpinning any investment, funds and financial mechanisms need to be established and allocated to re-invest in the projects and maintain the benefits of the initial integrated actions. Thus, “Monitoring and Enforcement” to assess ongoing performance of the overall investment portfolio, is a key element.

 
The following sections explore the experiences of other jurisdictions with the investment portfolio approach, as well as identify some key considerations for developing investment portfolios for the short-listed “hot spots” identified within the Dnipro River Basin Strategic Action Plan.

2. CONSIDERATIONS FOR PORTFOLIO DEVELOPMENT^[1]

Public authorities have traditionally provided water, waste, and energy services at prices barely above break-even such that these authorities have lacked the funds to improve and develop services. In many cases, they have had difficulties identifying and affording new, eco-efficient technologies, and have been stuck with antiquated inefficient technologies.

The United Nations Development Programme (UNDP), in its support for Public-Private Partnership (PPP) initiatives in concert with Sustainable Project Management (SPM, initiated in 1994), supports the creation of such new enterprises. PPP enterprises pool the best features of the private and public sectors: the dynamism, access to finance, knowledge of technologies, managerial efficiency, and entrepreneurism of the private sector with the social responsibility, environmental awareness, local knowledge, and job creation concerns of the public. PPPs are generally favoured in investment portfolio development.

 
To ensure the effective deployment of PPP, every SPM-UNDP project/portfolio has to meet the following clear and specific criteria:

- Be demand-driven and address a priority problem;

- Fully involve the public and private sectors from the outset;

- Demonstrate a strong potential for attracting private-sector participation, including the possibility of reasonable profitability;

- Use eco-efficient technologies;

- Provide an opportunity for improving local social conditions through job creation, training, and overall improvement of city services and urban living conditions;

- Respect local cultural values and established traditions; and

- Involve local stakeholders, non-governmental organizations (NGOs), and community groups in its development.

 
Private-sector partners must also meet well defined criteria before they are qualified to be involved in projects. They must:

- Be willing to contribute to the cost of the project's feasibility studies from the outset;

- Be prepared to invest in the new company when it is formed;

- Preferably have experience operating the eco-efficient technologies to be used by the new company;

- In the case of international firms, have experience operating in a developing country;

- Have the support of its own government's development agency; and

- Strongly support and advocate eco-efficiency and local participation.

 
SPM-UNDP projects tend to be focused on the areas of water and sanitation, waste management, energy services, and the eco-efficient use of natural resources. They typically address a range of issues, including water pollution; inadequate water supply: insufficient sanitation infrastructure; excessive waste of natural resources in industrial production processes; inadequate or nonexistent waste management procedures; environmentally unsound technologies lack of environmental education; lack of environmental considerations in development initiatives; and, ineffective and wasteful energy sources and technologies.

 
The intention is that these projects should be replicable, that is, they should address problems of common concern to other cities in the region, and even beyond, and the solutions that they offer should be easy to transplant there. This approach has been deployed in the 3^rd Phase of METAP (Mediterranean Action Plan) and, in the case of the Dnipro River Basin, this approach can be used for “hot spot” priority investment portfolios.

 
While PPPs are not the focus of the portfolios identified for each of the countries, their principles have been considered in their development.

3. PRINCIPLES & FRAMEWORK FOR THE DNIPRO RIVER PORTFOLIO DEVELOPMENT

 
Each “hot spot” identified in the Strategic Action Plan has unique pollution, industrial mix and community characteristics. Thus, each requires its own unique investment portfolio. However, at this stage, an overall system-wide, country-level approach has been adopted.

 
In developing a portfolio for a specific “hot spot”, it is recommended that the framework outlined in Section 2 be pursued. The described framework integrates the collective learning from the implementation of related projects within former Eastern Bloc/communist countries (e.g. the development of the Danube Investment Portfolios), as well as incorporates the preferred direction identified by international agencies.

 
There are a number of issues/opportunities that should be considered in the design of an investment portfolio at the broad country level:

- Pursuing an overall objective of pollution reduction/minimization/elimination in the most economically efficient and sustainable manner.

- Considering Vodokanals (i.e., municipal water and sanitation agencies) and Industries as elements of the same portfolio.

- Auditing of existing and potential polluting sources within the “hot spot”, as well as industries/locations that can be negatively affected from any remedial measures.

- Demonstrating (and documentating) “Due diligence” for pursuing local solutions, including technology and finances.

- Gradually implementating cost covering tariffs (e.g., higher utility charges, user fees) for public services and adequate charges for the utilization of natural resources.

- Implementing economic and financial incentives for industries and water users (e.g., to reduce environmental pollution and degradation of natural environment, and to adopt cleaner technologies).

- Developing a range of funding mechanisms, including establishment of environmental and water management funds, as well as the ability to implement dedicated taxes at a national level.

- Implementing detailed programme/project monitoring for efficacy and financial viability (and enforcement, where appropriate), as a cornerstone of accountability.

- Improving access to capital: “Domestic private investment, especially within former communist countries, has been constrained by historical barriers to private ownership (including land tenure), a limited domestic banking and financial sector, and the inexperience of potential investors with the types of activities required. Therefore it is essential to modernize and adjust the legal, regulatory and institutional framework to international standards to enable and attract the utmost level of private participation in project funding and operation.” Access to capital would be a key component of such reforms.

- Implementing institutional reform, including clear and proper definition of the roles of, and the responsibilities, amongst the public sector, the private sector and communities.

- Fostering public-private partnerships and pursuing them where appropriate. The environment to foster such relationships needs to be developed through the modernization of the legal, regulatory and institutional frameworks of each of the riparian countries.

- Coordinating legislation, laws and regulations, and organizational framework for the development of a water basin-wide management system, which is critical for sustainable development.

- Instituting the principles of economic viability including: (i) choice of technologies guided by willingness and capacity to pay for the service; (ii) tariff/user fee policy for operation & maintenance, and upgrade and replacement of equipment; (iii) the capacity pf the portfolio to ensure the security of replacement funds (as defined by financial sustainability).

- Encouraging community participation including: involvement of local stakeholders throughout the project cycle (and lifecycle of investment portfolio); and, fully informing the community (including through educational initiatives) of the implications and constraints in terms of quality of service, cost of investment (community contribution), tariffs and user fees, and management complexity.

- Encouraging technology, process and knowledge transfer to enable the ability to adapt learning from projects within the investment portfolio to other projects in lower priority hot spots.

- Establishing a central national body to oversee the securement, deployment and accountability of funds for projects within an investment portfolio.

 
While the majority of these principles were considered, the pursuit and enactment of many of them are out of the scope of this stage of portfolio development. However, in the subsequent stages of this initiative, including when potential projects/financing are being negotiated, such principles can be revisited to ensure the viability and sustainability of the investment portfolio.

 
At present, a number of projects identified within each countries’ portfolios have been planned and “budgeted” for. However, there is a common theme, that is even though these projects are required and will mitigate water pollution into the river, most sites are too “cash-strapped” to proceed on any major investment initiative. Re-investment funds were rarely reallocated in financial planning under the former economic regime. While a number of sites have become “joint stock” companies, most are in the process of stabilizing pricing, financial and accounting systems to reflect a market economy. As such, many are in the process of coming to terms with the allocation of funds for re-investment in their facilities.

 
Across the range of projects identified in the portfolios, there are number of operations, due to the injection of foreign capital, that have begun to be more financially stable and to pursue more environmentally-friendly processes. The issue of projects being “replicable,” as identified above, is particularly salient to such sites, that is, if such investments are transparent and all parties are accountable for the deployment of funds for environmental projects. If such actions are followed, these sites could prove to be vital and positive examples of “how to” as well as positive examples of the level of investment in each country’s portfolio.

 
As identified as per the objectives of the overall Strategic Action Plan development, ten (10) sites have been identified for Ukraine, and five (5) each for Belarus and Russia. Methodology and details of identification and prioritization of sites for including into the Priority Investment Portfolios are outlined in corresponding National Reports on Identification and Analysis of Sources of Pollution (Hot Spots)

 
Summaries of each of the sites, environmental challenges, mitigation measures and priority investments over the next 5 years (2003-2007 inclusive) have been identified in the attached appendices. For greater details of identified investments at each site, please refer to the Chapter 10 of each country’s SAP document (National Reports on Identification and Analysis of Sources of Pollution (Hot Spots).

4. UKRAINIAN INVESTMENT PORTFOLIO

 
From the perspective of surface area, the majority of the Dnipro Basin is located within the national boundaries of Ukraine, therefore half of the sources of pollution selected for more detailed evaluation were selected from within Ukraine. The country level portfolio for the Ukraine comprises ten (10) hot spots – seven (7) vodokanals and three (3) metallurgical complexes, comprising a minimum of thirty-two (32) projects (excluding sub-projects).

 
As listed in the following table, the total value of the identified portfolio is $105.223 million USD ($2001).

Ukraine: Investment Portfolio (10 Sites)

Timeframe: 5 years, All $ are US (2001)
 

* - To ensure an effective payback within a prescribed 14-year timeframe, selected priority components of individual site portfolios identified were included.

 

5. BELORUSSIAN INVESTMENT PORTFOLIO

 
The country level portfolio for Belarus comprises five (5) hot spots, including four (4) vodokanals and one (1) oil refinery, with a minimum of twenty-one (21) projects (excluding sub-projects). Of note, the oil refinery site is also responsible for the treatment of sanitary water discharges from the three (3) neighbouring municipalities, in addition to the treatment of effluent discharge and storm water from its own industrial complex.

 
The total value of the identified portfolio is $45.168 million USD ($2001).

Belarus: Investment Portfolio (5 Sites)

Timeframe: 5 years, All $ are US (2001)
 

 

6. RUSSIAN INVESTMENT PORTFOLIO

 

With the Russian area of the Dnipro Basin being the smallest, the value of this portfolio is the least of the three riparian countries. The country level portfolio for Russia comprises five (5) hot spots, including four (4) vodokanals and one (1) agricultural site, with a minimum of thirty-three (33) projects (excluding sub-projects).

The total value of the identified portfolio is $20.374 million USD ($2001).
 

Russia: Investment Programme (5 Sites)

Timeframe: 5 years, All $ are US (2001) [Assumed: $1 US = 29 Roubles (2001)]
 

* - No positive economic benefit is realized in the first investment phase, so investment for a second phase is considered.

** - Threshold of effectiveness.

^# Maximum level.

 

7. OVERALL DNIPRO RIVER BASIN INVESTMENT PORTFOLIO

 

With an investment portfolio comprising 20 sites and a minimum of eight-six (86) projects, the value of the priority investments for the Dnipro River Basin for projects over the next five (5) years is valued at $170,745 million USD ($2001).

 

Overall Dnipro Priority Investment Programme

Timeframe: 5 years, All $ are US (2001)

 

 

BIBLIOGRAPHY

 

“Bridges to Sustainability - Engaging The Private Sector Through Public-Private Partnerships,” The Honourable J. Hugh Faulkner, P.C., Executive Chairman Sustainable Project Management, UNDP, 1997

Caspian Environment Programme Website (http://www.caspianenvironment.org/)

“Clean Industrial Production for the Sustainable Development of the Huai River Basin;” Bob Gould and Douglas Liner, BCEOM, Guyancourt, France, in Sustainable Developments International, Edition 01.

“Danube River Basin Pollution Reduction Programme Report;” International Commission for the Danube River Basin, Dec 23, 1999.

“Environmental Development Co-operation Opportunities - Kazakhstan, Kyrgyz Republic, Turkmenistan, Uzbekistan;” Finnish Environment Institute, Marjukka Hiltunen 1998

“Financing Mechanisms for Implementation of the Strategic Action Plan (SAP);” Danube Watch – Issue 3/1999.

“Financial Mechanisms in The Danube River Basin Countries;” Danube Pollution Reduction Programme, Programme Coordination Unit UNDP/GEF Assistance. Prepared by Reinhard Wanninger, Financial Consultant, Dec 1999.

“Financing Sustainable Energy Projects through Public/Private Partnerships;” Dana Levy and John Buehler, The EIF Group, in Sustainable Developments International, Edition 01.

“GEF International Waters Focal Area – Background Paper;” Alfred M. Duda, Senior Advisor International Water, GEF International Waters Workshop, June 7 2001.

“Mobilizing Resources for Development: A Guide for Donors and Official Institutions on Opportunities for Financial Cooperation with the World Bank. Major Regional Programs: Europe and Central Asia/Middle East and North Africa;” World Bank Group.

“Natural Heritage Trust of Australia Bill 1996;” Second Reading Speech delivered by John Anderson, Minister for Primary Industries and Energy, June 19 1996.

“Report of the Workshop on Integrated Coastal Area and River Basin Management,” Mediterranean Action Plan, Priority Actions, Programmes, Toulon, Jan 10-12 2002.

“Rural Water Supply & Sanitation, Community Driven Development, and Multi-Sector Projects;” David Warren, LCSHS, and Fancois Munger, EWBWP, March 5, 2002.

“Strategic Action Plan For The Danube River Basin 1995 - 2005 Revision 1999;” Danube Pollution Reduction Programme, Programme Coordination Unit UNDP/GEF Assistance, Dec 1999.

“Subnational Governments in an Adjustment Strategy: Lessons from Argentina’s Provincial Development Projects – Infrastructure Notes;” David Vetter and Cecilia Zanetta, Urban No. FM-11, World Bank, May 1997.

“The National Heritage Trust – Helping Communities Helping Australia;” A Commonwealth Government Initiative, Government of Australia, 1996.

“World Bank Group Assistance to Infrastructure: Rethinking Future Possibilities;” Draft 2, prepared on November 2, 2000 by the following team: Philippe Dongier, John Flora, Michael Hamaide, Dominique Lallement, Frannie Leautier, Christine Kessides, Lee Travers; World Bank Group.

 

Appendix A.

 

UKRAINE Project 1: Kyiv Vodokanal

Existing Municipal Treatment Facilities

The only wastewater treatment plant (WTP) serving the City of Kyiv processes the wastewater from residential areas and industrial effluents, discharging treated effluent to the Dnipro River downstream of the city. Approximately 300 industrial enterprises in Kyiv are connected to the main WTP. These include food processors, heavy engineering enterprises, and electronic industries amongst others. Approximately 65 enterprises conduct pre-treatment of some of their effluents prior to discharge to the sewer network. Pre-treatment generally comprises chemical and coagulation technologies.

 
Residential water consumption is approximately 38,000 thousand m³/year and approximately 20,000 individuals are not connected to the sewage system. The total amount of wastewater arriving at the WTP from non-industrial sources (i.e. residents) in 2001 was estimated to be 473.6 million m³. This compares with an estimated annual storm water run-off of approximately 55,000 thousand m³.

 
The majority of the sewage collection network was constructed or reconstructed during the last 50 years. The pipes are made of ceramic, steel, pig iron and asbestos cement with the main sewage pipelines being made of concrete. Over 1,150 km of pipelines are ceramic-type which are resistant to corrosion and mechanical wear, but sensitive to uneven soil settlement. An inadequately prepared sub-base results in frequent cases of pipe damage.

 
Pollution Mitigation Measures

 
Reconstruction of Municipal Wastewater Treatment Facilities

 
Construction of a Mechanical Sludge Dewatering System

The sludge ponds of the Kyiv have an existing surface area of 320 ha and have accumulated 4,500 thousand m³ of sludge.

 
Composting of the dewatered sludge would reduce its volume requiring handling and yield a stabilized and disinfected product, suitable for arable land application. Currently, this measure is already being implemented to a certain extent. The sludge quality determines whether the composted product could be used for enriching arable land. This is largely dependent on industrial dischargers to the sewage system and whether they have effective pre-treatment measures to prevent heavy metals from entering the sewage system. An effective monitoring system for industrial dischargers is required to ensure wastewater quality measures are maintained.

 
Reconstruction of the Aeration System

Implementation of this proposed measure will enable the intensification of the nitrification process in the biological treatment process and thus reduce the quantity of organic pollution, including ammonium, nitrites, and nitrates in the discharged effluents.

 
Sewage System Reconstruction

The sewage system facilities, which were constructed in the 1960s and 1970s, are no longer very reliable due to leaking pipes and deteriorating pumps. This has jeopardized service reliability as well as having potentially adverse impacts on human health and the environment from system break-downs.

 
Investment Programme

According to the municipal enterprise ”Kyivvodokanal”, the estimated costs of the proposed water protection measures are as follows: .

Treatment Facilities. The total declared investment need for design and reconstruction of Phase 1 of the Bortnychi aeration system is 61,497.04 thousand USD.

For 2003-2005: Reconstruction of the Aeration Tanks - 18,000 thousand USD

Identified by aggregate indicators for the treatment facilities construction, the cost of reconstruction of the Bortnychi Aeration System Second Phase is 56,500 thousand USD.

 
Feasibility Analysis

Based on the investment required for the reconstruction and expansions of treatment facilities, that is 61,497 thousand USD (for five years), the payback period is 12.8 years.

 
Calculated Reduction in Cumulative Quantity of Discharged Pollutants through Investment (5-year Increments)
 

 

UKRAINE Project 2: Dnipropetrovsk Vodokanal

Existing Municipal Treatment Facilities

 
The wastewater treatment plants (WTP) belonging to Dnipropetrovsk Vodlokanal process the wastewater from residential areas and industrial effluents. About 130 industrial enterprises of Dnipropetrovsk are connected to the main WTPs. These are enterprises of food, engineering, electronic industries; 30 enterprises have their own local treatment facilities. The effluents from enterprises are pre-treated by various chemical coagulation technologies. The sewage network was mainly constructed during the last 40 years. The pipes are made of ceramic, steel, pig iron and asbestos cement, and main sewage pipelines - of reinforced concrete.

 
Pollution Mitigation Measures

 
Construction of the Mechanical Sludge Dewatering System

The sludge ponds of the Dnipropetrovsk wastewater treatment facilities have a surface area of 110 ha with an accumulated 850 thousand m³ of sludge, which has to be used in order to free up capacity in the sludge ponds for the further operation of the WTP.

 Reconstruction of the Aeration System

This measure is a priority, as it will enable the intensification of the nitrification process in biological treatment processes and thus reduce the quantity of organic pollution including, ammonium, nitrites, and nitrates and other main pollutants in discharged effluents.

 
Sewage System Reconstruction

The sewage pumping system is obsolete and needs refurbishment, with the electrical pumping equipment being the highest priority for immediate replacement.

Reconstruction is also required for the obsolete components of the sewage system which have become unreliable, as exhibited by frequent breaks in pipes and breakdowns in the pumps. These jeopardize the overall reliability of the sewage system, and system breakdowns can have adverse impacts on human health and the environment.

 
Investment Programme

Calculated by aggregate indicators of construction cost, the cost of the proposed water protection measures for the Dnipropetrovsk Vodokanal would be as follows.

 
Treatment Facilities

For 2003-2005:

- Reconstruction of the aeration tanks - 2110 thousand USD

- Reconstruction of the mechanical treatment facilities – 1230 thousand USD

 
Dnipropetrovsk Sewage System

For 2003-2004:

- Reconstruction of the sewage pumping plants – 2600 thousand USD

- Inspection of gravity collectors and pressure piping – 1300 thousand USD

- Replacement of part of the gravity collectors and pressure piping – 2500 thousand USD

 
Feasibility Analysis

Based on the investment required for the reconstruction and expansions of the treatment facilities, that is 9480 thousand USD (for five years), the payback period is 11.1 years.

 
Calculated Reduction in Cumulative Quantity of Discharged Pollutants through Investment (5-year Increments)

 

 

UKRAINE Project 3: Zaporizhya Vodokanal

 
Existing Municipal Treatment Facilities

 
The wastewater treatment plants (WTPs) process the wastewater from residential areas and industrial effluents. About 90 industrial enterprises of Zaporizhya are connected to the main WTPs. These include metallurgic industries, food processors, heavy engineering and electronic industries amongst others; about 15 enterprises have their own local pre-treatment facilities. The effluents from enterprises are pre-treated by various chemical coagulation technologies.

 
In Zaporizhya, the municipal, domestic and, in part, industrial wastewater is treated by the facilities on the left bank part of the city (i.e., CTP-1) and the right bank part of the city (i.e., CTP-2).

 
Phases 1 and 2 of CTP-1 urgently require reconstruction. The main part of the sewage network was constructed or has been reconstructed during last fifty years. The pipes consists of ceramic, steel, pig iron and asbestos cement. The main sewage pipelines are made of reinforced concrete.

 
Over 250 km of the pipelines are ceramic-type, which are resistant to corrosion and mechanical wear, but sensitive to uneven soil settlement. An inadequately prepared sub-base results in frequent cases of pipe damage.

 
Pollution Mitigation Measures

 
Reconstruction of Municipal Wastewater Treatment Plant / Construction of the Mechanical Sludge Dewatering System

The existing sludge ponds of the Zaporizhya WTP have accumulated about 1,000 thousand m³ of sludge.

Composting of dewatered sludge would reduce its volume requiring handling and yield a stabilized and disinfected product, suitable for arable land application. Currently, this measure is already being implemented to a certain extent. It is important to implement wastewater treatment measures to maintain sludge quality.

 
Reconstruction of the Aeration System

Implementation of this proposed measure will enable the intensification of the nitrification process in the biological treatment processes and thus reduce the quantity of organic pollutants, ammonium, nitrites, and nitrates in the discharged effluents.

 
Sewage System Reconstruction

The sewage system facilities, which were constructed in the during the 1950 to 1970s , are no longer reliable due to breaks in the obsolete pipes and deteriorating pumps. This has jeopardized service reliability, as well as having potential adverse impacts on human health and the environment from system breakdowns.

 
Investment Programme

 
According to the municipal enterprise, the water protection measures cost is estimated as follows:

Treatment Facilities - The total declared investment need for design and reconstruction of the CTP – 1 and CTP – 2 is 15,300 thousand USD.

 
For 2003-2005:

- Reconstruction of the aeration tanks - 5,100 thousand USD.

 
The required investment for the first 5 years is 8,200 thousand USD.

 
Feasibility Analysis

 
Based on an investment required for the reconstruction and expansions of the treatment facilities, that is 8,200 thousand USD (for five years), the effective payback of investment into the treatment facilities is 12.6 years.

 Calculated Reduction in Cumulative Quantity of Discharged Pollutants through Investment (5-year Increments)
 

 

UKRAINE PROJECT 4: MUNICIPAL ENTERPRISE ”CHERNIHIVVODOKANAL”

 
Existing municipal treatment facilities

 
Chernihiv has an approximate population of 245,500, of which 225,300 are connected to sewage system. The wastewater treatment plants (WTPs) process residential and industrial effluents.

 
About 40 industrial enterprises of Chernihiv are connected to the main WTPs. These include food processors, heavy engineering enterprises and electronic industries; about 10 enterprises have their own local pre-treatment facilities. Their effluents are pre-treated with chemical and various coagulation processes.

 
The main part of the sewage network was constructed or has been reconstructed during last 30 years. Pipes are made of ceramic, steel, pig iron and asbestos cement. The main sewage pipelines are made from concrete. Over 150 km of pipelines are the ceramic-type, which are resistant to corrosion and mechanical wear, but sensitive to uneven soil settlement. An inadequately prepared sub-base results in frequent cases of pipe damage.

 
Pollution Mitigation Measures

 
Reconstruction of Municipal Wastewater Treatment Facilities / Construction of the Mechanical Sludge Dewatering System

The sludge ponds of the Chernihiv wastewater treatment facilities have a surface area of 34 ha and have accumulated approximately 500 thousand m³ of sludge. During flooding (high waters), the sludge can be washed into the Desna, which flows into the Dnipro River (water supply source for many downstream cities including Kyiv).

 
Composting of the dewatered sludge would reduce the volume requiring handling and yield a stabilized and disinfected product, suitable for arable land application. The sludge quality determines whether the composted product could be used for enriching arable land. This is largely dependent on industrial dischargers to the sewage system and whether they have effective pre-treatment measures to prevent heavy metals from entering the sewage system. An effective monitoring system for industrial dischargers is required to ensure wastewater quality measures are maintained.

 
Reconstruction of the Aeration System

Implementation of this proposed measure will enable the intensification of the nitrification process in the biological treatment process and thus reduce the quantity of organic pollutants, including ammonium, nitrites, and nitrates in the discharged effluents.

 
Sewage System Reconstruction

The sewage system facilities are not longer very reliable due to leaking pipes and deteriorating pumps. This has jeopardized the level of service reliability, as well as having potentially adverse impacts on human health and the environment from system break-downs.

 
Investment Programme

The estimated cost of the proposed water quality protection for the ”Chernihivvodokanal” municipal enterprise is as follows:

 
Treatment Facilities

For 2003-2005:

- Reconstruction of the aeration tank system - 181.40 thousand USD

- Reconstruction of the mechanical treatment facilities - 185 thousand USD

 
Chernihiv Sewage System

For 2003-2004:

- Reconstruction of the sewage pumping plant #1 – 530 thousand USD

- Inspection of gravity collectors and pressure piping – 280 thousand USD

- Replacement of emergency sites in gravity collectors and pressure piping – 710 thousand USD

 
Feasibility Analysis

 
Based on an estimated required investment for reconstruction and expansions of treatment facilities of 2,316 thousand USD (for five years), the effective payback is 9.8 years.

Calculated Reduction in Cumulative Quantity of Discharged Pollutants through Investment (5-year Increments)

 

 

UKRAINE Project 5: Metallurgical Combined Works ”Kryvorizhstal”, Kryvyj Rih

 

Existing Facility Operation

 

The ”Kryvorizhstal” Metallurgical Combined Works is an industrial steel manufacturer that carries out the full metallurgical cycle of steel production, it produced 5 million t in 1999 and 6 million t in 2000.

This existing production process entails four main components: 1) mining; 2) by-product coke; 3) concentration, and 4) metallurgical production. Of the twenty six (26) production cycles, nineteen (19) are classified as ”clean” and six (6) are considered ”dirty”, that is, discharging effluents into water bodies.

The existing facility has its own wastewater treatment facilities. The effluents are only treated mechanically.

 

Pollution Mitigation Measures

 

Reconstruction and Expansion of the Treatment Facilities

Phase I – earliest 3 years. Reconstruction and expansion of the mechanical treatment facilities, construction of Phase I of the biological treatment facilities.

 

Investment Programme

 

The estimated cost of the proposed water protection measures for the “Kryvorizhstal” Metallurgical Combined Works is as follows:

 

Treatment Facilities

For 2003-2005:

- Construction of new and reconstruction of existing facilities for mechanical and biological treatment, Phase I: 3,770 thousand USD.

 

For 2006-2015:

- Construction of new and reconstruction of existing facilities for mechanical and biological treatment, Phase 2: 13,040 thousand USD;

- Cleaning and reconstruction of the tailing ponds – 7,100 thousand USD;

- Construction of the demineralization system for wastewater – 5,270 thousand USD.

 

Feasibility Analysis

 

For an investment of 4,180 thousand USD (for five years) for the reconstruction and expansions of treatment facilities, the effective payback is 13.4 years.

 

However, it should be noted that the management of the Kryvorizhstal Metallurgical Combined Works is cautious about entering into any investment agreements, and this must be taken into account in the selection of the projects for the pre-investment survey.

 

Calculated Reduction in Cumulative Quantity of Discharged Pollutants through Investment (5-year Increments)

 

 

UKRAINE Project 6: Metallurgical Combined Works “Zaporizhstal”

 

Existing Facility Operation

 

The ”Zaporizhstal” Metallurgical Combined Works is an industrial steel manufacturer that carries out the full metallurgical cycle of steel production., The estimated value of its production volume is 472 million USD (2001).

 

The existing facility has its own wastewater treatment facilities. The effluents are treated mechanically. Approximately, 87% of the total water consumption of the facility is recycled.

 

The main portion of the effluents is discharged into the Kapustyanka gully and collection pond which has a 10 million m³ volume. The main part of this pond is filled with tailings, which have been partially excavated by a hydraulic dredge. A smaller portion of the effluents is discharged in the Hordyska gully and collection pond which has a volume of 25 million m³. As a result, it is estimated that 8 thousand m³/hour of insufficiently treated wastewater is discharged into the Dnipro River. In addition, 600-800 m³ per hour of the insufficiently treated wastewater, polluted with mainly sulphites, is discharged into Dnipro River along Makusova gully.

 

Pollution Mitigation Measures

 

Reconstruction and Expansion of the Treatment Facilities

 

Phase I – earliest 3 years. Reconstruction and expansion of the mechanical treatment facilities, initiation of the construction of the biological treatment facilities, cleaning of the tailing ponds.

 

Phase II – next 10 years. Completion of construction of the biological treatment facilities.

 

Investment Programme

The estimated cost of the proposed water protection measures for the “Zaporizhstal” Metallurgical Combined Works is a follows:

 

Treatment Facilities

For 2003-2005:

- Reconstruction of existing mechanical treatment facilities and construction of biological treatment facilities, Phase I; cleaning of the tailing ponds, total: 4,610 thousand USD.

 

For 2006-2015:

- Completion of construction of the biological treatment facilities – 8,760 thousand USD.

 

For the earliest five (5) years, the total required investment is ideally 6,265 thousand USD.

 

Feasibility Analysis

 

Based on an investment of 6,265 thousand USD (for five years) which would be required for reconstruction and expansions of the treatment facilities, the effective payback for investment is 11.8 years, which indicates the effectiveness of the project.

 

Given a positive attitude from management towards potentially entering into the investment agreements, these combined works can be recommended as priority for pre-investment survey.

 

Calculated Reduction in Cumulative Quantity of Discharged Pollutants through Investment (5-year Increments)

 

 

UKRAINE Project 7: State Municipal Enterprise “Zhytomyrvodokanal”

 

Existing Municipal Treatment Facilities

 

The Zhytomyr state municipal wastewater treatment plants (WTPs) process residential and industrial effluents. About 40 industrial enterprises of Zhytomyr are connected to the main WTPs. These include food processors, heavy engineering enterprises and electronic industries amongst others. Nine (9) enterprises have their own local pre-treatment facilities with chemical and various coagulation technologies for pre-treating.

 

The main part of sewage network was constructed during the last 30 years. The pipes consists of ceramic, steel, pig iron and asbestos cement. The main sewage pipelines are manufactured of reinforced concrete. Over 135 km of pipelines is the ceramic type, which are resistant to corrosion and mechanical wear, but subject to breakage from settling on poorly prepared bases. The sewage pumping plants have screen facilities in front of the pumps.

 

Pollution Mitigation Measures

 

Construction of a Mechanical Sludge Dewatering System

The sludge ponds of the Zhytomyr wastewater treatment facilities have an existing surface area of 34 ha and have accumulated 270 thousand m³ of sludge, which during flooding (high waters) can be washed off into the Teteriv, which flows into the Kyivske water reservoir upstream of Kyiv on the Dnipro River.

 

Reconstruction of the Aeration System

Implementation of this proposed measure is a priority, since it will enable the intensification of the nitrification process in the biological treatment process and thus reduce the quantity of organic pollution, ammonium, nitrites, and nitrates in the discharged effluents.

 

Sewage System Reconstruction

The sewage system has low reliability due to frequent breaks in pipes and deteriorating pumps. This has jeopardized the service reliability, as well as having potentially adverse impacts on human health and the environment from system breakdowns.

 

Investment Programme

 

Based on the aggregate indicators of the construction cost, the estimated cost of the proposed water protection measures for the ”Zhytomyrvodokanal” is as follows:

 

Treatment Facilities

For 2003-2005:

- Reconstruction of the aeration system - 503 thousand USD

- Reconstruction of the mechanical treatment facilities - 294 thousand USD

 

For the Zhytomyr sewage system

For 2003-2004:

- Reconstruction of the sewage pumping plants – 650 thousand USD

- Inspection of gravity collectors and pressure piping – 310 thousand USD

- Replacement of emergency containment sites in gravity collectors and pressure piping – 600 thousand USD

 

Feasibility Analysis

 

Based on an investment of 2,945 thousand USD (for five years) which would be required for reconstruction and expansions of treatment facilities, the effective payback is 13.1 years.

 

Calculated Reduction in Cumulative Quantity of Discharged Pollutants through Investment (5-year Increments)

 

 

UKRAINE Project 8: Municipal Enterprise “Loutskvodokanal”

 

Existing municipal treatment facilities

 

The existing municipal wastewater treatment plants (WTPs) of Loutsk process residential wastewater and industrial effluents. Approximately 30 industrial enterprises of Loutsk are connected to the main WTPs. These include food processors, heavy engineering enterprises and processing industries; four (4) enterprises have own local pre-treatment facilities. The effluents from these enterprises are pre-treated by chemical and various coagulation technologies.

 

The main part of sewage network was constructed or reconstructed during last 30 years. The pipes consists of ceramic, steel, pig iron and asbestos cement. The main sewage pipelines are made of concrete. Over 100 km of pipelines are ceramic, which is resistant to corrosion and mechanical wear, but sensitive to uneven settlement of soil. An inadequately prepared sub-base results in frequent cases of pipe damage.

 

Pollution Mitigation Measures

 

Reconstruction and Expansion of Municipal Wastewater Treatment Facilities

Implementation of this proposed measure will provide for increased capacity and improved quality of treatment in the biological treatment facilities, thus reducing the quantity of organic pollution, including ammonium, nitrites, and nitrates in the discharged effluents.

 

Investment Programme

 

Treatment Facilities

Reconstruction and expansion of wastewater treatment facilities, total – 7.0 million USD, including:

- For 2003-2005 (Phase 1): 2170 thousand USD. Of them: own funds - 94 thousand USD, oblast budget – 12,5 thousand USD, national environmental fund – 189 thousand USD. Required foreign investment – 1783 thousand USD.

 

Feasibility Analysis

 

Based on an estimated investment of 1,170 thousand USD (for five years) which is required for the reconstruction and expansions of treatment facilities, the effective payback is 14.0 years.

 

Calculated Reduction in Cumulative Quantity of Discharged Pollutants through Investment (5-year Increments)