Wastewater Treatment: A Path to More Efficient Management through PPPs

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Wastewater treatment is a communal activity that is traditionally, according to current legal solutions, under the jurisdiction of local self-government units. However, this decentralized management model, where the local self-government unit is responsible for wastewater treatment and thus for managing wastewater treatment plants, has shown shortcomings in practice. The identified shortcomings include primarily insufficient financial resources of local self-governments, inadequate capacity of local self-governments to take responsibility in this area, lack of real control, and insufficient transparency in operations.

The Ministry of Construction, Transport, and Infrastructure (hereinafter referred to as “MGSI”) is currently implementing programs and projects for the construction of communal sewer infrastructure, within which the construction or reconstruction of 177 wastewater treatment plants (hereinafter referred to as “WWTPs”) in Serbia is planned. During the implementation of these projects, problems have been observed in the construction of WWTPs, mainly due to limited resources and capacity of many local self-government units.

For this reason, MGSI conducted field control of 40 WWTPs from August to September 2023. The inspection found that five plants are not functional because the network has not been developed for them, nine require complete reconstruction or demolition and new construction, while the remaining 26 require greater or lesser additional investments.

Due to these findings, MGSI plans to work on amendments to the legal regulations in the coming period to improve the management of these plants.

When considering various models of WWTP management, the most efficient model for the Republic of Serbia is considered to be the establishment of public-private partnerships (hereinafter referred to as “PPP”) in this area. Therefore, MGSI will proceed with amending the legal regulations to regulate the management of wastewater treatment plants through PPP.

Based on the experience of our law firm in the field of PPP, the construction and management of WWTPs as infrastructure projects of general interest are ideal for implementation through PPP projects. This form of project realization is suitable given the value and importance of these facilities and the communal activity itself, financial sustainability, transfer of knowledge and technologies from the private partner, and the expected level of service with the responsibility of the private partner. However, so far, only one project has been realized through PPP (Design, construction, and management of the wastewater treatment plant in the territory of the city of Zrenjanin), in the preparation and implementation of which our law firm participated.

Supported by the relevant ministries, efforts have long been underway to build wastewater treatment plants in all local self-government units. However, the existing plants have mostly been built with funds or loans from various sources, including:

  • IPA EU funds,
  • Loans from the Council of Europe Development Bank (CEB),
  • Interstate agreement with the People’s Republic of China,
  • Financing from the Republic of Hungary,
  • Loans from the German Development Bank (KfW), etc.

In this context, we expect new regulations that will enable more efficient management of wastewater treatment plants through PPP projects, which will contribute to improving the quality of life of all citizens of Serbia. We hope that the new regulations will accelerate the processes of construction and modernization of wastewater treatment plants, as well as enable better management of these important infrastructure facilities in the future.


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