UNMIK Pillar IV Business Plan for 2006
Department: Water and Waste Regulatory Office 1. WWRO mandate The Water and Waste Regulatory Office (“WWRO”) was legally established on 26 November 2004 in accordance with UNMIK Regulation 2004/49 (“the Regulation”) as an independent body pursuant to Section 11.2 of the Constitutional Framework. For its work, WWRO is accountable to the SRSG who appoints the Director and the Deputy Director of WWRO upon recommendation of the DSRSG Head of Pillar IV. WWRO is responsible for regulating the activities of water, wastewater and waste service providers that are SOEs or POEs. The legal mandate of WWRO consists in the setting out and enforcement of a regulatory framework applicable to the water, wastewater, bulk water supply, solid waste collection, and solid waste disposal service providers (“Service providers”) covering the following aspects: • • • • • • Issuance, amendment, and revocation of service licenses Approval of service tariffs Setting and enforcement of service standards Approval of the customers` charters for the service providers Establishment and enforcement of a disconnection regime Settlement of past debts
2. WWRO main outputs in 2005 2.1. Issuance of secondary legislation On 26 January 2005, two months after its establishment, WWRO has, as required by the Regulation 2004/49, issued secondary legislation that consists of 14 rules (“the WWRO Rules”). 2.2. Workshops and Seminars WWRO has upon issuance of the WWRO Rules, during March-April 2005 organized a series of five workshops with representatives of water and waste service providers. 2.3. Licensing of water and waste service providers WWRO has concluded the review process of license applications and is preparing the issuance of interim licenses to the Service Providers in October/November 2005. 2.4. Tariff approval for the water and waste service providers WWRO is currently conducting a review of the tariff applications submitted by the Service Providers in accordance with the respective rules on tariffs issued by WWRO. 2.5. Staffing of WWRO WWRO has, during the period January–September 2005, accomplished the process of hiring the staff needed according to its organizational structure. 2.6. Establishment of a regulatory fee paying system In accordance with the Regulation and based on the WWRO proposal DSRSG the Head of Pillar IV has, in May 2005, determined regulatory fees that regulated Service Providers must pay to the WWRO. 3. WWRO operational goals and performance indicators for 2006 WWRO aims to achieve the following operational goals in 2006: 3.1. Review of the WWRO Rules in light of practical experience with their application, also taking into consideration suggestions and proposals of the Service Providers Performance Indicator: A d t f th WWRO R l b d d t il d i f h f th R l
Amendment of the WWRO Rules based on a detailed review of each of the Rules. 3.2. Create functional Customers` Consultative Committees capable to deal with their statutory mandate for addressing customers` complaints Performance Indicator: Customers` Consultative Committees established in each of seven regions, fully functional and operational, according to the Regulation and the WWRO Rules. 3.3. Enforce technical and commercial standards as determined by WWRO Rules for the provision of water and waste services Performance Indicator: Regular reports by the Service Providers demonstrating compliance with the standards of service and with license conditions set forth by the WWRO. 3.4. License all Service Providers in accordance with the WWRO Rules Performance Indicator: Service licenses issued for all Service Providers for a period of five years upon expiration of first interim licensing period of one year. 3.5. Approve tariffs for all Service Providers in accordance with the WWRO Rules Performance Indicator: Service tariffs approved on or before 31 December 2005 for a period of five years. 3.6. Institutional development of WWRO as a sustainable economic regulatory authority, ready for hand-over to Kosovo institutions when decided by the SRSG Performance Indicator: Financially sustainable WWRO, financed from regulatory fees, fully staffed with competent and motivated staff, with established regulatory and operating policies. 4. Implementation of the Plan 4.1. Review of the WWRO Rules in light of practical experience with their application, also taking into consideration suggestions and proposals of the Service Providers During 2006, WWRO plans to carry out general review of the WWRO Rules issued in January 2005. This review will result in amendment of the WWRO Rules taking into account the experience gained through practical application of these rules. For the successful accomplishment of this task, WWRO will be supported by international experts that will be part of the EAR financed project for institutional development of the WWRO, planned to start in February 2006. 4.2. Create functional Customers` Consultative Committees capable to deal with their statutory mandate for addressing customers` complaints According to the Regulation, WWRO has issued the Rule on Customers` Consultative Committees, which envisages creation of regional Customers` Consultative Committees (“CCC”) in each service area. These CCCs shall be established by 26 October 2005 by WWRO upon consultation with the Municipalities, KTA, and Service Providers. Their main responsibility will be to provide a forum for customers concerns and the resolution of customers` complaints. WWRO plans to provide these CCCs with the support needed for their effective functioning. In this context, WWRO will for the year 2006 provide assistance to the CCCs in the form of the office space for their meetings, financial reimbursement of the expenses occurred to the members of CCCs for attending the meetings, development of the operating and administrative procedures for their work. 4.3. Enforce technical and commercial standards as determined by WWRO Rules for the provision of water and waste services In the WWRO Rules, WWRO has established minimum service standards that Service Providers must achieve while providing water and solid waste services to their customers. Compliance with these standards will be monitored by the reports that Service Providers are obliged to submit to the WWRO on regular basis described in the WWRO respective Rules. In addition, WWRO will conduct inspections as needed by its inspectors in order to closer supervise the compliance with the standards by the Service Providers, and take appropriate measures according to its legal mandate in case of non-compliance with the standards of service. 4.4. License all Service Providers in accordance with the WWRO Rules First licenses issued this year to the Service Providers will expire in October 2006. Accordingly, during the period July – October 2006, WWRO shall conduct review of license applications for the renewal of service licenses to the Service Providers and issue service licenses for a period of five years. In this process WWRO will use the experience from the first licensing of the Service Providers carried out in 2005, and also WWRO will be supported by the international consultants financed by EAR project planned to start in 2006. 4.5. Approve tariffs for all Service Providers in accordance with the WWRO Rules Based on the general principles and methodology established in the WWRO Rules, WWRO shall, on or before 31 December 2006, approve service tariffs for the Service Providers for a period of five years. This will require comprehensive review of overall financial and operational performance of the Service Providers, which will be carried out by the WWRO Tariff Section team supported by the international consultants as part EAR project. A i th f li i WWRO ill th i i d i 2005 f th fi t l f t iff f i d
As in the case of licensing, WWRO will use the experience gained in 2005 from the first approval of tariffs for one-year period. 4.6. Institutional development of WWRO as a sustainable economic regulatory authority, ready for hand-over to Kosovo institutions when decided by the SRSG WWRO has, during 2005, recruited all of the staff needed for performing its regulatory functions. The WWRO staff is currently financed partially by the Pillar IV (salaries of the senior staff) and partially by the KCB (salaries of administrative and supporting staff). In 2006, WWRO aims to become a self-financing entity through levying regulatory fees, which will commence in November 2005. The EAR funded project mentioned above, initially planned to start in 2005 and then postponed for 2006 envisages the provision of on the job training to the WWRO staff and thus enhance development of skills of the WWRO senior staff. In addition, this project will be supportive for the WWRO to review and finalize its internal policies and procedures. 5. Sustainability Currently, WWRO is being financed from both KCB and the EU Pillar. During 2005, WWRO used the following facilities paid/provided by the EU Pillar: Office Building, Network (EUMIK) plus help desk services and Telecommunications. KCB funded the remainder of the WWRO expenses for 2006 (129.000 EUR). In relation to the financial-sustainability, the WWRO Regulation provides that WWRO should ultimately be funded by regulatory fees paid by regulated Service Providers. Accordingly, in May 2005, the DSRSG Head of EU Pillar has issued an Administrative Instruction, which has determined the level of regulatory fees. WWRO expect to start generating funds from regulatory fees during 2006. However, WWRO will need appropriation from the KCB and the EU Pillar for its expenses also during 2006, as it is to expect difficulties for collection of regulatory fees from all Service Providers. With regard to the capacity building and institutional development, WWRO is completely staffed and its staff (including its management) consists of locals, entirely. The EAR funded project for the WWRO institutional development, planned to start in February 2006, will further contribute in developing WWRO as a sustainable regulatory authority of the water and waste sectors in Kosovo, capable for enforcement of sound economic regulation in these sectors. 6. Resources needed for implementation of the plan Currently, WWRO staff consists of 17 employees and all of them are Kosovars. During 2005, the EU Pillar financed salaries for seven a KCB financed salaries for 10 employees. Employer EU Pillar KCB Total Names and Positions of EU Pillar staff: Name Position Director Head of Tariff Section Head of Legal Section Head of Waste Section Head of Water Section Administrative Officer Translator/PR Organization WWRO WWRO WWRO WWRO WWRO WWRO WWRO Contract Expiry 31 Dec. 2005 31 Dec. 2005 31 Dec. 2005 31 Dec. 2005 31 Dec. 2005 31 Dec. 2005 31 Dec. 2005 International / / / Local 7 10 17 Total 7 10 17
Local EU Pillar staff
Afrim Lajci Ramiz Kokollari Xhevdet Shala Shpresa Kastrati Abedin Azizi Fahrije Sahiti Klorinda Kaçinari
For ensuring successful implementation of the operational goals determined in this Business Plan, and for enabling sensible transfer of competencies and responsibilities of the WWRO to PISGs when decided so by UNMIK/SRSG, the following support from the EU Pillar is required: 1. 2. 3. Continue financing the salaries of WWRO senior staff until such time that WWRO will generate sufficient funds for paying its staff competitive salaries; Continue to provide training to the WWRO EU funded local staff; Continue efforts at political level to have the draft WWRO Law approved by the Assembly, such law setting out the mechanism for transferring competencies to PISG;