Technical, legal and economic assistance for the implementation of Zagreb Wastewater Treatment Plant

CLIENT: KfW Development Bank (KfW).

FINANCING AGENCY: KfW Development Bank (KfW) / European Bank for Reconstruction and Development (EBRD).

In order to improve the quality of the water of the Sava River as well as the quality of the Sava aquifer, whose water is used for the water supply of Zagreb, the construction of a wastewater treatment plant was an object of various studies since 1979. In 1998, the tender for the WWTP concession was published and in December 2000 a Concession Agreement, spanning a period of 28 years, was signed between the City of Zagreb and Zagrebacke Otpadne Vode d.o.o. (ZOV). ZOV is a special purpose company set up by a Sponsor consortium.
The Project is implemented on a BOT (Build Operate Transfer) basis and consists of the following components:
    •        The design, construction, acceptance testing, start up, operation, maintenance and repair of:

the central Wastewater Treatment Plant (WWTP) in Zagreb (including associated administrative and operational facilities and equipment). The WWTP was constructed in stages up to a capacity of 1.2 million Population Equivalent (with the option of increasing the capacity up to 1.5 million PE, if necessary),
    •        the Micevac Pumping Station and
    •        the Main Collection Pipeline (MCP).       
The construction (but not the design or operation) of the following related infrastructure:       
    •        the Main Drainage Canal ("MDC"), carrying the wastewater from the parts of the City located North of the river Sava to the WWTP. The system includes a storage channel, 2 main collectors, an overflow channel, the main stormwater overflow structures as well as a pumping station (Sjever-Jug").
    •        the Main Collection Pipeline ("MCP"), carrying the wastewater from the parts of the City located South of the river Sava to the WWTP via Micevac Pumping Station.
    •        a connection road ("Culinecka Road") to connect one of the city's major east-west connections (Slavonska Avenja) to the WWTP and the new "Domovinski Bridge".
    •        a 4-lane bridge across the river Sava ("Domovinski Bridge"), carrying the MCP across the river.
The contract was extended via variation orders regarding various copnonents. The major ones are as follows:
    •        Extension of the sludge dumping area (WWTP).
    •        Several stormwater overflow channels connected to the Main Drainage System.
    •        Collector Culinecka, parallel to Culinecka Road.
    •        Secondary network Kozary Put including pumping station Zitnjak.
    •        Discharge station for suction trucks.
the services
The service rendered by the Consultant is to act as Technical Advisor to the Lenders. The principal activity is the assessment of risks with regard to the Loan Agreement. The consulting services last up to financial close (Phase I) as well as during the construction phase up to project completion and Final Acceptance (Phase II).
The project is divided in 2 phases, which are defined in as follows:
Phase I:
To assist the Lenders in their due diligence up to financial close to gain a full understanding of technical risks (nature, extent and probability) associated with the different components of the Project (construction and operation) and of any possible problems that might arise during the implementation of the Project, thus allowing appropriate provisions to be included in the financing agreements.
Phase II:
To monitor the progress of the project and to inform the Lenders, during all stages of implementation up to Project completion about the actual and forecast status of the Project, with regard to progress, disbursements, costs, quality and risk management. The tasks also include a review of the design basis for an increase in treatment capacity of the WWTP from originally planned 1.0 to 1.2 million PE.