The EBRD (European Bank for Reconstruction and Development) funded a strategic consultancy project to support the Bulgarian Government’s quest to create a regulatory framework for the water and wastewater industry and accelerate the pace of change within the sector.
This was a pre-requisite to address pressure for sector reform, that was ultimately required to support Bulgaria’s planned accession to the EU. The lack of a Regulator was delaying loan funding for the water and wastewater industries and was holding back development and hence environmental compliance.
The need for cost and operational efficiencies had to be balanced with the need to work toward EU compliance on environmental standards and the urgent need for investment in the water and wastewater networks and treatment infrastructure. At the same time politically, the government needed to be able to continue to provide affordable services and safe and clean water to Bulgarian consumers.
Our team had to identify appropriate regulatory law, price control and other regulatory processes for the sector, set out realistic service standards and objectives for the utility companies, and develop their service standards and reporting and business plan requirements.
Using expertise gained from a wide-variety of privatisation schemes around the world, our team ensured that the new regulatory system could accommodate and support the different types of planned privatisation projects.
A key element of the project was the design of a performance framework, and the reporting and data requirements that could ensure comparative benchmarking of costs and performance. These had to be achievable, whilst being meaningful and able to drive the desired behaviour within the utilities.
The team had to balance the need for global regulatory and investment planning expertise with a good knowledge of local Bulgarian technical, financial, political and social issues.
The resulting processes, standards and data models developed by the team were designed to bring benefits of a better understanding of business performance and customer service through the provision of limited, but focused data; from the regional water companies.
The project was completed within a very tight timescale even though it was complex and required a delicate balancing of many opposing and political factors. The regulations progressed into law and ultimately led to the full establishment of the new Regulator, new utility companies and the Price Control process. The Regulator was positioned to provide the necessary sector reform and attract the necessary investment funds.
