Dobromir Simidchiev on Water and Sewerage reforms
Mr. Simidchiev in the first place gave a global picture of the situation in Bulgaria.
We have 265 municipalities, as they are small, medium and large. Large municipalities are doing well because they have good revenues, are coursed by large commercial banks and by international funds, meaning they have no problem with their credit rating. They have a problem with the fact that some have surpassed the allowable threshold of indebtedness – 15%. Small municipalities are in the opposite situation – they have huge needs, but very small revenues. These municipalities are heavily dependent on the central budget – sometimes in a ratio of 10 times and more. The key to solving such problems is in the unification of such municipalities in some form to have access to the currently available cheap private money. But the investment projects are serious, and the revenues that are securing them are small. Therefore, this money will not reach the small municipalities. The consolidation of the Water and Sewerage companies would solve this problem to a very small extent because the companies themselves have limited investment opportunity and when a Plumbing is small it will still be in the queue in the respective association.
Public Private partnership can increase the capacity of the Water Supply operator and attracting investment resources will become easier.
To the question: what would be if there is a specific fund for funding specific sectors – for example for the Plumbing infrastructure – Mr. Simidchiev replied that this is already happening.
It is important that the fund or the company concerned have state or European money that is cheap and serve as a guarantee fund. From then on, this fund should address a professional fund manager to ensure the incorporation of funds in meaningful projects, leading to an increase in the efficiency of the Water Supply company. This could be a powerful tool to encourage operators to higher efficiency. Specifically for the program Environment Fund manager will probably be EBRD. It will implement government policies in this regard.
Is it possible to have the infrastructure in small settlements?
Yes, through a combination of measures – a meaningful tool to focus efforts on the sector, a public private partnership to contribute to efficiency gains, proper investment priorities. A series of activities is needed, subject to a policy.
Efficiency gains remain our big problem.
TV Bloomberg, 03.07.2017: