Strategic Moves - Regional Environmental Center for Central and ...

Introduction
This chapter presents an overview of water and waste utilities, their operational
efficiency, and their readiness for technical and organisational changes.
Differences between countries with respect to utility reform are relatively small.
All countries are at the very beginning of the utility reform process. The transfer of
ownership from the state level to the local level has been completed (with the exception
of Montenegro and Serbia).
As a result of the decentralisation process, in most countries of the region responsibility
for water services, solid waste services and sewage treatment falls
squarely on the lowest self-governing municipal level.
However, no significant efforts have been made to reorganise the public utilities
into more efficient organisations that work according to sound economic principles.
The public utility companies (PUCs) are burdened with obsolete
infrastructure, leading to water and energy losses that increase their operational
costs and decrease net income. Further inefficiencies stem from low tariffs and bill
collection rates, overstaffing, and the absence of sound organisation and management
inherited from the past. Without appropriate legislation, plans, strategies
and support from the national level, the municipal PUCs are unable to improve
their own status, organisation and efficiency, even where there is local-level political
will to do so.
In Croatia and Serbia, the national ministries (and in some cases funds) responsible
for environment, water and/or infrastructure provide financial and technical
assistance to the preparation of regional infrastructure projects and to
construction. However, this financial and technical assistance is not accompanied
by sufficient institutional assistance for the creation and development of the regional
utility companies that should run these regional installations.
Albania, Kosovo (as defined under UNSCR 1244) and Montenegro have made
efforts to create regional companies 11 in a systematic way, while in Croatia and Serbia,
regional companies are being established based on regional (waste management)
infrastructure projects in the pipeline. Even though a systematic approach has the
potential to achieve better results than a case-based approach, both groups of countries
face great difficulties in establishing regional utility companies. The emerging
regional utility companies are weak or virtually non-existent: they comprise one or
two members of staff who, in most cases, do not have the required skills or leverage,
and the municipal utility companies have not yet been integrated into them.
In most SEE countries there are project preparation units/departments that belong
to relevant ministries and/or environmental protection funds.
The following two sections describe in greater detail the current state of infrastructure
and the utility companies in each individual country.
The current status of the water and waste utilities has a direct impact on the
potential for investments in water and waste. The utilities’ political independence,
adequate human resources capacity, sound organisational set-up and financial
health are preconditions for successful investments: the water and waste utilities are
the project proponents in any investments and must secure proper physical and fi-
S T R AT E G I C M O V E S 121