The World Bank Supporting Sustainable Wastewater Management (P145040) REPORT NO.: RES29709 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SUPPORTING SUSTAINABLE WASTEWATER MANAGEMENT APPROVED ON JULY 12, 2013 TO GEORGIA June 27, 2018 SOCIAL, URBAN, RURAL AND RESILIENCE GLOBAL PRACTICE EUROPE AND CENTRAL ASIA Regional Vice President: Cyril E Muller Country Director: Mercy Miyang Tembon Senior Global Practice Director: Ede Jorge Ijjasz-Vasquez Practice Manager/Manager: David N. Sislen Task Team Leader: Joanna Masic The World Bank Supporting Sustainable Wastewater Management (P145040) ABBREVIATIONS AND ACRONYMS CD Country Director EA Environmental Assessment GoG Government of Georgia ESIA Environmental and Social Impact Assessment MDFG Municipal Development Fund of Georgia M&E Monitoring and Evaluation OM Operational Manual O&M Operation and Maintenance PDO Project Development Objective RDP Regional Development Project RDP2 Second Regional Development Project SIDA Swedish International Development Agency TA Technical Assistance TSS Total Suspended Solids UWSCG United Water Supply Company of Georgia WB World Bank WWTP Wastewater Treatment Plant The World Bank Supporting Sustainable Wastewater Management (P145040) BASIC DATA Product Information Project ID Financing Instrument P145040 Investment Project Financing Original EA Category Current EA Category Partial Assessment (B) Partial Assessment (B) Approval Date Current Closing Date 12-Jul-2013 30-Jun-2018 Organizations Borrower Responsible Agency Ministry of Finance of Georgia Georgia Municipal Development Fund Project Development Objective (PDO) Original PDO The objective of the Project is to promote sustainable wastewater management in Georgia and pilot the implementation of wastewater treatment plants. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed TF-14912 12-Jul-2013 25-Jul-2013 15-Aug-2013 30-Jun-2018 10.05 5.78 4.28 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Supporting Sustainable Wastewater Management (P145040) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING A. General 1. A grant in the amount of USD 9,252,155 for Sustainable Wastewater Management Project (SWMP) was approved on July 12, 2013 by the Swedish International Development Cooperation Agency (Sida). The grant became effective on August 15, 2013 with a closing date of December 31, 2015. The SWMP project was prepared and appraised in June 2015 and the closing date extended to June 30, 2018. Following the project appraisal and preparatory work, an additional USD 800,000 was allocated by Sida (as part of the administrative process to extend the disbursement date by three years to December 31, 2018), meeting the new total project requirement of USD 10,052,155. An amendment to the Grant Agreement was signed in May 2015. 2. The Project’s Development Objectives (PDO) is to promote sustainable wastewater management in Georgia and pilot the implementation of wastewater treatment plants. The Project finances two components: (1) Technical Assistance (TA) to facilitate development of the regulatory framework for improved wastewater treatment infrastructure, capacity building activities and trainings, policy for sludge management, preparation of feasibility studies, engineering designs, construction supervision, monitoring and evaluation activities and provision of technical assistance to the Project Implementing Entity and the UWSCG; and (2) Investment Grants to pilot the implementation of wastewater treatment plants. An update for each component is given below. B. Project Status 3. Overall progress towards achieving the PDO is Moderately Unsatisfactory due to the delays with implementation. The PDO cannot be fully achieved by the current closing date of June 30, 2018. However, now that the construction of plants is underway, the project is on track and can meet the PDO with extended closing date. The construction of two Wastewater Treatment Plants (WWTP) is ongoing but most likely will not be finished until mid-2019. Overall implementation progress is therefore Moderately Satisfactory, since, while the physical works under the Project are underway and quality of the construction is acceptable, there were significant delays during first stage of the project implementation (such as, gaining stakeholder and beneficiary consensus to accept the results of the Feasibility Studies before proceeding with preparation of the Employer’s Requirements and tender documents) and related procurement (review and approval of works and supervision consultant bids, contracts – and personnel). These issues are now resolved and the implementation of civil works is now making moderate progress. In the Biannual Meeting, the Contractor was requested to meet – and catch-up with - its own work plan schedule included in? the civil works contract, now that the winter construction period has passed. Disbursement under the Project stands at USD 5,775,772.53 (57.5% of the total grant funds). The following paragraphs provide details of the progress per Project component. All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg. iv The World Bank Supporting Sustainable Wastewater Management (P145040) 4. Component 1: Technical Assistance: Provision of technical assistance to support Georgia in developing adequate policy environment documents for improved wastewater treatment infrastructure (USD 2,620,194). The Project made early progress in implementing the TA component, which was critical for the achievement of the PDO results indicator to ‘increase institutional and technical capacity for wastewater management’. The following activities were financed:  Study tours and knowledge exchange events for four staff from the Georgian water sector to learn about international experiences in sustainable water management systems from leading countries, including Sweden and Latvia, hosted by Stockholm International Water Institute, SIWI.  Preparation of feasibility studies for Tskaltubo and Telavi WWTPs.  Technical assistance for UWSCG to develop reports, covering Regulatory Compliance Checklist and National Wastewater Management Draft Strategy.  Preparation of Environmental Impact Assessment for the Rehabilitation and Operation of Tskaltubo and Telavi Waste Water Treatment Plants.  Construction supervision activities at both locations.  Annual Financial Audit Reports. To date, USD 1,922,889.17 has been contracted and USD 959,126.25 has been disbursed for TA activities. There is USD 844,568.33 in TA savings, which are to be used for: (a) extending the construction supervision consultant contract; and (b) operational training support to the UWSCG once the waste treatment plants are ready for testing, commissioning, and handover to them. 5. Component 2: Investment Grants: Improvement of the efficiency of the water and wastewater sector through rehabilitation of 2-3 wastewater treatment plants (US$ 9,945,000 million). The investment grants aimed to finance two to three wastewater treatment plants that would: (a) rehabilitate existing infrastructure prioritized by the national government; or (b) be complementary to prior/ongoing investments by international financing institutions. During Project implementation, it was agreed that the Project would support the construction of two wastewater treatment plants (WWTP) in Telavi and Tskaltubo, which are complementary to investments under the World Bank-funded Regional Development Project (RDP) and Second Regional Development Project (RPD2), respectively. At the initial stage of the Project, the number (one or more), type (technology) and location of WWTPs were unspecified. The locations of two WWTP sites were informed by Government approval of the Georgia Wastewater Management Strategy in April of 2014 and multiple coordination workshops with the stakeholders and beneficiaries. Finally, all SWMP stakeholders agreed to realize the two WWTPs in Telavi and Tskaltubo as “pilot plants” and to re-introduce treatment capacities tailored for long-term sustainability in each community, consistent with the national WWMS framework. 6. The Feasibility Study Reports were finalized in June 2013 and July 2015 for Tskaltubo and Telavi, respectively. The design-supply-installation contractor (JV of SADE and VWS (Romania)) came on board on October 19, 2016. The contractor submitted detailed designs for both WWTPs in August 2017. The construction supervision consultant completed final review in October 2017. The Municipalities issued the construction permits in September and October 2017 for Telavi and Tskaltubo WWTPs, respectively. Construction on both sites began in November 2017 and moderate progress is being made. According to the workplan under review by the Supervision Consultant, the construction, testing, and commissioning of both WWTPs should be completed in February 2019. In parallel, a period of operational improvement and capacity building will be required before the Project is completed. The workplan with major milestones are provided in Annex 2. All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg. v The World Bank Supporting Sustainable Wastewater Management (P145040) 7. The revised feasibility studies concluded that construction of the two proposed WWTPs would require additional financing of up to USD 2.3 million. In September 2015, the Ministry of Finance of Georgia requested from the World Bank a loan in the amount of USD 2.3 million as a part of Additional Financing (AF) for the World Bank financed Second Regional Development Project (RDP2) to supplement the WWTP construction costs in Tskaltubo. The World Bank Board of Executive Directors approved an AF Loan for the RDP2 in February 2016. The current estimate is that the AF amount required to complete the WWTPs will be no more than USD 1,600,000, so the AF funds would be sufficient to ensure the successful completion of the WWTP. The updated cost estimates and financing plan are presented in the table below: Table 1: Updated Cost Estimate and Financing Plan Current Contractual Expected Change Orders Investment Commitments (from SIDA (up to and from RDP2 Total funding) Additional Financing) Tskaltubo WWTP USD 3,141,200.00 USD 1,600,000* USD 4,741,200.00 Telavi WWTP USD 4,433,400.00 - USD 4,433,400.00 Total USD 7,574,600.00 USD 9,174,600.00 * Subject to approval of expected change orders received by MDF 8. Environmental and Social Safeguards. The Project’s performance on safeguard and environmental compliance has been Satisfactory. Preliminary ESIAs were carried out at the stage of preparing the feasibility studies for Telavi and Tskaltubo WWTPs. As designs for these two investments advanced, site-specific full-scale ESIAs were completed; draft reports disclosed, consulted with stakeholders, and finalized thereafter. Project implementation consistently followed environmental and social safeguard requirements detailed in the Project’s Environmental Management Framework. The Environmental Management Framework was disclosed in-country on May 28, 2013 and published in the World Bank electronic database on June 20, 2013. A Resettlement Policy Framework was disclosed in-country on May 6, 2013 and published through the World Bank electronic database on May 28, 2013. Preliminary Environmental Impact Assessment reports for both Telavi and Tskaltubo WWTP construction were disclosed in-country on June 22, 2016 and published in the WB electronic database on June 27, 2016. The final EIA report for Telavi was disclosed in country on March 6, 2018 and through the Bank electronic database on March 7, 2018, and the final EIA report for Tskaltubo was disclosed in country on April 18, 2018 and through the Bank electronic database on April 19, 2018. 9. Fiduciary Aspects. The current rating for Financial Management and Procurement are both Satisfactory. All interim audit reports are submitted on time, and there are no overdue audit reports. C. Rational for Restructuring 10. After some delay, the WWTPs in Tskaltubo and Telavi are now under construction. However, given the initial delays at the start of the civil works contracts, a 20-month extension of the Project closing date is needed to allow the two plants to be fully constructed, put into operation, and operational improvements to be made, and thus, achieve the project objective on piloting of the implementation of wastewater treatment plans. The proposed Project extension will also allow time for dialogue with the government to advance the outputs of the Technical Assistance which relate to the first part of the PDO, which is the promotion of sustainable wastewater management in Georgia. 11. The restructuring will not change the PDO and associated outcomes. Composition of the Project’s components and Project institutional arrangements will also remain unchanged. At the same time, the Project All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg. vi The World Bank Supporting Sustainable Wastewater Management (P145040) implementation plan and disbursement plan will need to be revised accordingly to reflect the extended Project closing date. 12. The Results Framework will undergo minor revision. Two new indicators are added, one on utility staff training and another on citizen engagement, which is a corporate indicator. The indicators relating to the WWTPs remain the same but some targets have been adjusted to reflect the actual design for Telavi WWTP and Tskaltubo WWTP. The end date for all indicators are extended to take into account the proposed extension to the closing date. 13. The Project restructuring does not affect the Project scope and scale of physical works supported by the Project. Hence, environmental and social analyses undertaken during the Project preparation and early stages of implementation remain valid. There is no need for additional environmental or social analysis or instrument as a result of the Project restructuring. The proposed restructuring does not change the Project’s environmental classification (Category B) nor trigger the application of any new, or exceptions to any Bank safeguard policies. 14. While this is the first project extension, the grant itself was already extended in 2015 for 30 months, with a revised Project Closing Date of June 30, 2018. This restructuring therefore is seeking a second extension by an additional 20 months. Since the cumulative extension of the Project Closing Date exceeds two years, it requires the Bank Regional Vice-President decision. II. DESCRIPTION OF PROPOSED CHANGES 15. In response to the request of the Client, this restructuring paper seeks the following changes to Project (a) Extension of the Project Closing Date. Extend the Project Closing date from June 30, 2018 to February 28, 2020 (20 months) to allow time to construct and put into full operation the financed WWTPs and, thus, to fully achieve the PDO in terms of piloting the implementation of wastewater treatment plants in Georgia. (b) Change in Results Framework. The proposed updates apply to the final values of the targets, figures and dates to reflect the proposed extension of the Project closing date. The proposed revisions are also aimed to represent the expected outputs for the Telavi WWTP and Tskaltubo WWTP. One intermediate indicator on utility staff training will be added to stress the importance of proper operation and maintenance of the WWTPs. The target dates of other indicators, including those for the TA component, have been extended in line with the proposed new Project closing date. Also, a citizen engagement indicator will be added. (c) Change in Disbursement Estimates. The disbursement estimates are revised to reflect the actual implementation progress and the proposed extension of the Project closing date. The revised quarterly disbursement figures are displayed in the chart in Annex 1. (d) Change in Implementation Schedule. The revised workplan shows that construction, commissioning and testing of both WWTPs will be completed in February 2019, followed by hands-on training for utility staff on plant operation and maintenance. A revised Implementation Schedule is provided in Annex 2. All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg. vii The World Bank Supporting Sustainable Wastewater Management (P145040) (e) Change in Economic and Financial Analysis. Given that the Project is demand-driven and the pipeline of investments to be financed under the Project was unknown upfront, the economic and financial analysis was carried out as part of the feasibility studies. The economic analysis framework included in the Project’s Operational Manual (OM) provided guidance to the economic appraisal process based on the cost effectiveness approach. The economic framework outlined the expected scope and methodology of the analysis by type and size of investments, including the quantifiable benefits to be assessed and the baseline monitoring indicators to be established. The Economic and Financial Analysis is included in Annex 3. III. SUMMARY OF CHANGES Changed Not Changed Change in Results Framework ✔ Change in Loan Closing Date(s) ✔ Change in Disbursement Estimates ✔ Change in Implementation Schedule ✔ Change in Economic and Financial Analysis ✔ Change in Implementing Agency ✔ Change in DDO Status ✔ Change in Project's Development Objectives ✔ Change in Components and Cost ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Change in Disbursements Arrangements ✔ Change in Overall Risk Rating ✔ Change in Safeguard Policies Triggered ✔ Change of EA category ✔ Change in Legal Covenants ✔ Change in Institutional Arrangements ✔ Change in Financial Management ✔ Change in Procurement ✔ Other Change(s) ✔ Change in Technical Analysis ✔ Change in Social Analysis ✔ All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg. viii The World Bank Supporting Sustainable Wastewater Management (P145040) Change in Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_RESULTS_TABLE RESULTS FRAMEWORK Project Development Objective Indicators PDO_IND_TABLE Increased institutional and technical capacity for wastewater management. Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 75.00 100.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 Increased number of urban population in Project areas that have access to sustainable wastewater services. Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 58000.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 Decreased volume of discharges of untreated wastewater discharged in Project areas. Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 13700.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 Direct project beneficiaries Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 58000.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 Female beneficiaries All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg. ix The World Bank Supporting Sustainable Wastewater Management (P145040) Unit of Measure: Percentage Indicator Type: Custom Supplement Baseline Actual (Current) End Target Action Value 0.00 0.00 29000.00 Revised Intermediate Indicators IO_IND_TABLE National Wastewater Management Strategy is guided and presented to GoG Cabinet Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 100.00 100.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 National Sludge Management Strategy is guided and presented to GoG Cabinet Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 100.00 100.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 National Discharge Limits to community sewage and separate storm-water systems, including pretreatment program is delivered and guided to GoG Cabinet Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 50.00 100.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 National Drinking Water Demand Management Stratety is delivered and guided for GoG approval Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg. x The World Bank Supporting Sustainable Wastewater Management (P145040) Value 0.00 0.00 100.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 UWSC Phasing Plan for merit-based, incremental construction of treatment plant infrastructure-5, 10, 15 yrs for mech'l, biological & nutrient reduction facilit's, respectively for WWTP-incl reuse of Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 50.00 100.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 Improved cost recovery for O&M for community wastewater services (WWTP and sewers) Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 25.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 No. of rehabilitated and operational WWTPs Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 2.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 Mass of Total Suspended Solids, TSS pollution loads removed by treatment plant supported under the project Unit of Measure: Tones/year Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 970.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 Mass of Biological Oxygen Demand, BOD5 pollution loads removed by treatment plant supported under the project Unit of Measure: Tones/year Indicator Type: Custom Baseline Actual (Current) End Target Action All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg. xi The World Bank Supporting Sustainable Wastewater Management (P145040) Value 0.00 0.00 740.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 Mass of Dried Sludge pollution loads removed by treatment plant supported under the project Unit of Measure: Tones/year Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 450.00 Revised Date 11-May-2015 02-May-2018 28-Feb-2020 WWTP operations staff (UWSCG) trainned by "trouble shooeter" in 4x seasonal scenarios and sludge removal Unit of Measure: Number Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 2.00 New Date 08-Jun-2018 08-Jun-2018 28-Feb-2020 Project-related grievances that have been resolved Unit of Measure: Percentage Indicator Type: Custom Baseline Actual (Current) End Target Action Value 0.00 0.00 100.00 New Date 08-Jun-2018 08-Jun-2018 28-Feb-2020 OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications TF-14912 Effective 31-Dec-2015 30-Jun-2018 28-Feb-2020 28-Jun-2020 OPS_DETAILEDCHANGES_DISBURSEMENT_TABLE DISBURSEMENT ESTIMATES Change in Disbursement Estimates Yes All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg. xii The World Bank Supporting Sustainable Wastewater Management (P145040) Year Current Proposed 2018 0.00 3.60 2019 0.00 2.40 All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg. xiii The World Bank Supporting Sustainable Wastewater Management (P145040) Annex 1 Revised Disbursement Estimates by Quarters according to the World Bank FY Disbursements and Investment Total Disbursement Forecast Tskaltubo WWTP Telavi WWTP inc Q4 2018 USD 1,362,106.47 USD 1,773,775.05 USD 3,135,881.52 Q1 2019 USD 583,956.32 USD 345,263.25 USD 929,219.57 Q2 2019 USD 541,369.32 USD 370,582.58 USD 911,951.90 Q3 2019 USD 488,256.35 USD 419,852.36 USD 908,108.71 Q4 2019 USD 472,633.36 USD 405,962.25 USD 878,595.61 Q1 2020 USD 452,855.22 USD 395,582.36 USD 848,437.58 Q2 2020 USD 420,585.69 USD 352,526.39 USD 773,112.08 Q3 2020 USD 250,962.63 USD 235,742.82 USD 486,705.45 Q4 2020 USD 168,474.64 USD 134,122.94 USD 302,597.58 Total USD 4,741,200.00 USD 4,433,410.00 USD 9,174,610.00 All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg. The World Bank Supporting Sustainable Wastewater Management (P145040) Annex 2 Revised Implementation Schedule Milestone Telavi WWTP Tskaltubo WWTP Completion of Mechanical Works December 2018 December 2018 Completion of Civil Works January 2019 January 2019 Completion of Electrical Works February 2019 December 2019 Facilities Acceptance February 2019 February 2019 Start of Operation March 2019 March 2019 Training Period Through 2019 Through 2019 All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg. The World Bank Supporting Sustainable Wastewater Management (P145040) Annex 3 Economic and Financial Analysis (Summary) A. Economic Analysis 1. A Feasibility Study of the Tskaltubo Wastewater Treatment Plant was prepared in June 2013 by the consultant Seureca, a subsidiary of Veolia Environment. The Feasibility Study for Telavi Wastewater Treatment Plant was prepared in March 2015 by the consultant ILF Consulting Engineers in a joint venture with Saunders Group Ltd and p2mberlin GmbH. These feasibility studies assessed the following quantifiable benefits to be gained: (a) Full mechanical & biological treatment of urban sewage, compared to no treatment before the project: (i) Tskaltubo WWTP (2028), in Imereti Region: treatment for 18,500 population equivalent (6,400 m3/d) or 100% improvement over the current, abandoned WWTP; (ii) Telavi WWTP (2030), in Kakheti Region: treatment for 52,000 population equivalent (14,400 m3/d) or 100% improvement over the current, abandoned WWTP; and (iii) Total: 70,500 population equivalents with improved public health & sanitation conditions INDICATOR:  Number of rehabilitated and operational WWTPs (2) (b) Fewer pollutants released in the local environment and to regional watersheds (Alazani River to the Caspian Sea (Telavi WWTP) and Tskaltubo River to the Black Sea (Tskaltubo WWTP) to achieve: (i) Phased compliance with Georgian (and EU) treated sewage effluent & sludge disposal regulations, (ii) Health benefits to downstream communities (for drinking and irrigation water sources), and (iii) Comprehensive benefits to aquatic and terrestrial ecosystems, through improved water quality. 2. Public health and environmental improvements to communities and watersheds (Caspian and Black Seas) are tabulated per: (a) Total Suspended Solids: (i) Tskaltubo WWTP (2028): 330 Tons per year removed or 81.7% of pre WWTP rate (ii) Telavi WWTP (2030): 1,140 Tons per year removed or 81.7% of pre WWTP rate (iii) Total 1,470 Tons per year removed (b) Biological Oxygen Demand (i) Telavi WWTP (2030): 840 Tons/ year removed or 87.5% of pre WWTP rate (ii) Tskaltubo WWTP (2028): 285 Tons/ year removed or 87.5% of pre WWTP rate (iii) Total 1,125 Tons/ year removed (c) Total Sludge removed, dried (i) Telavi WWTP (2030): 520 Tons per year removed (ii) Tskaltubo WWTP (2028): 185 Tons per year removed (ii) Total 705 Tons per year removed INDICATORS: All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg. The World Bank Supporting Sustainable Wastewater Management (P145040)  Mass of Total Suspended Solids, TSS pollution loads removed by WWTP, ton per year  Mass of Biological Oxygen Demand, BOD5 pollution loads removed by WWTP, ton per year  Mass of Dried Sludge pollution loads removed by WWTP supported under the project, ton per year 3. The project is scheduled includes two phases, due to limits to customer affordability and utility cost recovery and the overall project budget. The first phase, this project, attains mechanical and biological treatment levels. The second phase will be realized beyond this project timeframe, and attains nutrient removal (nitrogen and phosphorus). This echoes the decades-long implementation sequence throughout Western Europe starting in the 1960s. The implementation sequence allows customer incomes (and macroeconomic conditions) sufficient time to mature so as to maintain customer affordability – and utility cost recovery - of the wholly added wastewater treatment services (and costs). B. Financial Analysis 4. The treatment technology options analyses conducted in the respective Feasibility Studies are the basis for the financial analysis of the project. The aim was to select the most sustainable and affordable treatment plant technology for each community, which attains compliance with Georgian (and EU) effluent & disposal regulations. The studies yielded the following results (which were also used to set the total investment budget for the entire project). (a) Tskaltubo WWTP (2028): o CAPEX: 3,553,984 for the recommended option, Anaerobic Pond + Trickling Filter (or 33.2% less than the activated sludge option at 5,321,339 USD) o OPEX: 57,221 USD/y for the recommended option, Anaerobic Pond + Trickling Filter (or 53.7% less than the activated sludge option at 123,629 USD/y) o Life Cycle Costs: 4,183,000 USD for the recommended, option Anaerobic Pond + Trickling Filter (for a total savings of 41.8% or 3,013,000 USD over the activated sludge option at 7,196,000 USD) (b) Telavi WWTP (2030) o CAPEX: 5,427,248 USD for the recommended option, Anaerobic Pond + Trickling Filter (or 24.1% less than the activated sludge option at 6,736,919 USD) o OPEX: 120,845 USD/y for the recommended option, Anaerobic Pond + Trickling Filter (or 52.7% less than the activated sludge option at 243,719 USD/y) o Life Cycle Costs: 10,212,428 USD for the recommended, option Anaerobic Pond + Trickling Filter (for a total savings of 29.2% or 2,985,000 USD over the activated sludge option at 13,197,276 USD) 5. United Water Supply Company of Georgia has committed in writing to cover the operations & maintenance costs for the two newly reconstructed wastewater treatment plants. This is facilitated according to the selected treatment technology with annual costs of the “attached media” (trickling filter) type technology which is 50% lower than activated sludge. In turn the significantly lower operations costs result in lower and more affordable customer tariffs (minimization of annual costs, while maintaining regulatory compliance, was a key factor in the technical project development). All contract prices quoted in this paper exclude taxes and Government of Georgia’s contributions pg.