STATUS OF CF CO-FUNDED PROJECTS

11 April 2008

AIVARS JURJĀNSMinistry of Environment

Head of Projects Implementation Department

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Within the framework of CF projects approved in 2000-2006:

A total of 210 agreements signed in the value of EUR 504 M (incl. VAT)

A total of 109 agreements completed in the value of EUR 219 M (incl. VAT)

It is planned to organize another 30 procurements

The main problem affecting the timeframe for implementation of the projects is increase in construction costs. Finding solution to this increase in costs delays the signing of procurement agreements.

STATUS

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Development of water supply and sewage services in Riga, No.2000/LV/16/P/PE/001

Status of agreements:

All agreements in the framework of the project (1 works and 1 services agreement) are completed.

Winding-up report and final declaration of expenditure of the project were submitted to the Ministry of Finance on 26 March 2008

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Development of water supply and sewage services in Jelgava, No.2000/LV/16/P/PE/002

Status of agreements:All agreements in the framework of the

project have been completed (2 works agreements, 2 supplies agreements and 3 services agreements).

Winding-up report and final declaration of expenditure of the project were submitted to the European Commission on 31 January 2008.

No comments have yet been received from the Commission.

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Solid waste management in Liepāja district, No.2001/LV/16/P/PE/005

Status of agreements:

All agreements in the framework of the project have been completed (2 works agreements, 2 supplies agreements and 1 services agreement).

Winding-up report and final declaration of expenditure of the project were submitted to the European Commission.

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Technical assistance for environment projects in Latvia, No.2000/LV/16/P/PA/001

Status of agreements:All agreements in the framework of the project (8 services agreements) have

been completed.

On 26 March 2008, the Ministry of Environment repeatedly submitted to the Ministry of Finance a revised winding-up report and final declaration of expenditure of the project .

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Development of water services in the river basins of Eastern Latvia, No.2001/LV/16/P/PE/007 (I)

Work performed since 01/11/2007:Extension and reconstruction of water pipes and sewage networks in Salacgrīva, Sigulda, Ķegums, Priekuļi, Lielvārde, Valmiera, Alūksne, Preiļi, Cesvaine, Valka and Smiltene.

Status of agreements: 45 agreements were signed in the framework of the project :

2 services and 2 supplies agreements; 13 agreements on renovation and construction of

waste water treatment facilities; 21 agreements on extension and reconstruction of

water pipes and sewage networks; 7 agreements on construction of preparation

equipment for drinking water – in Smiltene, Sigulda, Valmiera, Lielvārde, Ogre, Valka, Preiļi, Cesvaine, Dagda.

In Q2 and Q3 of 2008 it is planned to launch 8 procurement procedures:

• 1 on renovation and construction of waste water treatment facilities – in Cesvaine;

• 3 on construction of preparation equipment for drinking water – in Alūksne, Salaspils, Līvāni. (By the end of April 2008 it is planned to sign agreements on construction of preparation equipment for drinking water in Salacgrīva and Ķegums).

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Development of water services in the river basins of Eastern Latvia, No.2001/LV/16/P/PE/007 (II)

Topical problems : Increase in costs has been identified in

procurement tenders of the project – EUR 12,997,569.30 more compared to the European Commission Decision. According to paragraph 25 of Minutes No.9 of the Cabinet sitting of 12/02/2008, additional state budget funding was allocated to the project for covering the increase in costs on condition that the beneficiaries would co-finance EUR 2,455.368.48 of the increase in costs.

Increase in costs : EUR 12,997,569.30 State budget (~81%): EUR 10,542,200.82 Beneficiaries (~19%): EUR 2,455,368.48

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Jūrmala water services development, No.2001/LV/16/P/PE/008

Work completed since 01/11/2007:Implementation of the agreement “Jūrmala water services development”, No.2001/LV/16/P/PE/008-4 has been completed

Status of agreements:All agreements in the framework of the project (3 works agreements and 1 services agreement) have been completed.

Winding-up report and final declaration of expenditure of the project were submitted to the Ministry of Finance on 26 March 2008.

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Development of water services in Rēzekne, No.2002/LV/16/P/PE/009

Status of agreements :2 works agreements (1 networks and 1 drinking water) and 1 supplies agreement have been implemented. Implementation of 1 works (WWTP) agreement and 1 services agreement (construction supervision) continues (until 11 August 2008).

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Solid waste management in Austrumlatgale region, No.2002/LV/16/P/PE/010

Status of agreements:All agreements in the framework of

the project (1 supplies, 1 works and 1 services agreement) are completed.

Winding-up report and final declaration of expenditure of the project were submitted to the Ministry of Finance on 25 March 2008.

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Solid waste management inDienvidlatgale region, No.2002/LV/16/P/PE/011 (I)

Status of agreements:All agreements in the framework of

the project (1 supplies, 1 works and 1 services agreement) are completed.

Winding-up report and final declaration of expenditure of the project were submitted to the Ministry of Finance on 26 March 2008.

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Technical assistance for environmental sector in Latvia, No. 2003/LV/16/P/PA/008

Proposals for modifications of the Financing Memorandum have been sent to the Ministry of Finance. The modifications of the Financing Memorandum suggest extending the project end date to 31/12/2009 and adding 3 components to the project:

• Development of a sewerage system model in Jelgava• Implementation and extension of data transmission system (Daugavpils)• 88 agglomerations (assessment of investments).

On 21 December 2007 letter No.013878 was received from the European Commission informing that the proposals for modifications of the Financing Memorandum will be supported and that the EC is preparing a decision on the project.

Status of agreements : 11 agreements have been signed and completed in the framework of the project

(implementation of 9 services and 1 supplies agreement has been completed). In Q2 of 2008 it is planned to implement 2 procurement agreements

(Development of a sewerage system model in Jelgava and Implementation and extension of data transmission system (Daugavpils)) and at the beginning of 2009 – 1 procurement agreement (88 agglomerations).

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Technical assistance for water services development projects in Latvian municipalities, No.2004/LV/16/C/PA/002

Work completed since 01/11/2007: Intensive acoustic measurement of water supply networks in 7 municipalities in

Kurzeme region - Kandava, Roja, Saldus, Skrunda, Stende, Talsi, Ugāle; Washing of water supply pipelines and measurements of sewage flow in Talsi

municipality in Kurzeme region; Inspection of sewage pipelines in 8 municipalities in Kurzeme region - Brocēni,

Dundaga, Kandava, Kuldīga, Roja, Skrunda, Stende, Talsi.

Status of agreements : 12 agreements are signed in the framework of the project (10 services and 2 supplies

agreements). Implementation of 2 supplies and 7 services agreement is completed.______________________________

After completion of all agreements within the framework of the project savings have been made in the amount of EUR 370,888.08. Taking into account the fact that additional needs have been identified in the area of water services, the Ministry of Environment decided to add a new component to the project – “Inspection reports on nitrates, priority and hazardous substances in surface and underground water objects”. On 3 April 2008 a proposal for amendments to the EC Decision was submitted to the Ministry of Finance.

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Development of water services in Ventspils, stage II, No. 2004/LV/16/C/PE/001

Work completed since 01/11/2007: Reconstruction and construction of

water and sewerage networks. Construction of 13.8 km of water networks and 13.5 km of sewerage and rainwater collection networks, as well as 5.2 km of water mains.

Status of agreements: 27 agreements signed in the

framework of the project (2 services, 4 supplies and 21 works agreements of which 3 works agreements signed in 2008)

10 works, 4 supplies and 1 services, agreements completed.

In 2008 it is planned to organise 3 procurement tenders in the framework of the project.

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Development of water services in Ventspils, stage II, No. 2004/LV/16/C/PE/001

Topical problems:

Increase in costs has been identified in procurement tenders of the project – EUR 8,446,379 more compared to the European Commission Decision and already allocated funds for covering the increase in costs, therefore it will not be possible to implement the project to the initially planned scope.

According to paragraph 9 of Minutes No.11 of the Cabinet sitting of 19/02/2008, it was decided in principle to allocate additional state budget funding after reduction of the scope of project and coordination of the changes with the European Commission.

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Development of water services in Olaine and Jaunolaine, No. 2004/LV/16/C/PE/002

Work completed since 01/11/2007: Implementation of the

agreement “Reconstruction of water supply and sewerage networks in Jaunolaine” has been completed. Within the framework of the project 12 km of sewerage networks were reconstructed.

Status of agreements: 7 agreements signed in the

framework of the project (1 services agreement and 6 works agreements).

1 works agreement has been completed.

In Q2 of 2008 it is planned to sign 1 works agreement for Jaunolaine component.

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Topical problems:

Increase in costs has been identified in procurement tenders of the project – EUR 1,935,861.21 more compared to the European Commission Decision. According to paragraph 9 of Minutes No.11 of the Cabinet sitting of 19/02/2008, additional state budget funding was allocated to the project for covering the increase in costs on condition that the beneficiaries would co-finance EUR 1,012,309.26 of the increase in costs

Increase in costs: EUR 1,935,861.21State budget (~47,70%): EUR 923,551.94 Beneficiary (~52,30%): EUR 1,012,309.26

Development of water services in Olaine and Jaunolaine, No. 2004/LV/16/C/PE/002

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Development of water services in Liepaja, stage II, No. 2004/LV/16/C/PE/003

Works completed since 01/11/2007:

Designing and reconstruction of inverted syphons of water supply pipelines under Liepāja Lake, Ālande (Tāšupīte) valley and Fortress Channel

Status of agreements:

17 agreements are signed in the framework of the project (7 works, 8 supplies and 2 services agreements).

Implementation of 8 supplies agreements and 1 works agreement is completed.

In October 2008 it is planned to organise 1 (last) procurement procedure.

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Development of water services in Liepaja, stage II, No. 2004/LV/16/C/PE/003

Topical problems: In the project there is the indicator

“Improvements in sewage treatment facilities and urgent outlet repair works”. Part of this indicator – urgent outlet repair works was completed in 2005 using the funds of limited liability company “Liepājas ūdens”.

Amendments to the EC Decision on granting of funds:

For the indicator “Reconstruction of drill holes/wells – change from 26 wells to 24 wells;

Within the framework of the project there is a surplus of EUR 238,000.00;

Inclusion of an additional component “Sludge treatment facility”.

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Development of water services in Daugavpils, stage II, No. 2004/LV/16/C/PE/004

Status of agreements: All planned agreements in the framework of

the project (3 works and 1 services agreement) are signed. Planned deadline of completion of works is Q3 2009.

Topical problems: Increase in costs has been identified in

procurement tenders of the project – EUR 12,541,538.46 more compared to the European Commission Decision. According to paragraph 9 of Minutes No.11 of the Cabinet sitting of 19/02/2008, additional state budget funding was allocated to the project for covering the increase in costs on condition that the beneficiaries would co-finance EUR 2,131,354.40 of the increase in costs.

Incerase in costs: EUR 12,541,538.46 State budget (~83%): EUR 10,410,184.06 Beneficiary (~17%): EUR 2,131,354.40

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Zemgale region solid waste management, No.2004/LV/16/C/PE/005

Status of agreements: 3 agreements are signed in the framework of the

project (1 services, 1 supplies and 1 works agreement).

Topical problem: Out of the 22 waste dump sites to be rehabilitated

15 are located on local government owned land, 5 – on private land and 2 – on the land of JSC “Latvian State Forests”. Rent agreements have been signed with the private owners, and rent agreements with JSC “Latvian State Forests” are being drawn up.

According to the opinion of the Ministry of Finance on eligibility of rehabilitation costs of dump sites located on private land, a review of the list of dump sites to be rehabilitated is possible, without changing the scope of work established in the EC Decision.

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Maliena region solid waste management project, No. 2004/LV/16/C/PE/006

Works completed since 01/11/2007: In February 2008, construction

of Maliena region solid waste landfill “Kaudzītes” was completed.

Status of agreements: 5 agreements are signed in the

framework of the project (3 works, 1 services and 1 supplies agreement).

Implementation of 1 supplies and 1 works agreement is completed.

It is planned to complete all construction works of the project in December 2009.

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Maliena region solid waste management project, No. 2004/LV/16/C/PE/006

Topical problems:

Increase in costs has been identified in procurement tenders of the project – EUR 450,476.29 more compared to the European Commission Decision. According to paragraph 25 of Minutes No.9 of the Cabinet sitting of 12/02/2008, additional state budget funding was allocated to the project for covering the increase in costs on condition that the beneficiary would co-finance EUR 76,686.68 of the increase in costs.

Increase in costs: EUR 450,476.29 State budget (~83%): EUR 373,789.61 Beneficiary (~17%): EUR 76,686.68

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Development of Ventspils district heating system, No.2005/LV/16/C/PE/001

Status of agreements:

1 services agreement has been signed in the framework of the project.

It is planned to launch 3 procurement tenders in Q2 of 2008: “Designing and construction of the district heating system

connecting pipeline in Ventspils by using horizontal drilling method”;

“Designing and construction of a CHP plant at 69 Talsu Street, Ventspils, including a 110kV power cable connection and backup heating plant”;

“Engineering supervision of construction works of the connecting pipeline and CHP plant in Ventspils”.

Planned deadline for completion of construction works – 09/2011.

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Development of Ventspils district heating system, No.2005/LV/16/C/PE/001

Topical problems:

Taking into consideration also the information provided by company “Ventspils ENERGO” that the delivery times of cogeneration station equipment have increased (even up to 5 times), it is not possible to implement the project by 30 November 2009 as stated in the EC Decision.

Taking into consideration the changes in delivery times and assuming that procurement agreements will be signed in July 2008 and that there will be no unexpected circumstances, construction of the object will be completed in August/September 2011, which significantly exceeds the deadlines for physical works stated in the EC Decision.

The Ministry of Environment in its letter No. 4.4.2-03/791 of 15 February 2008 has asked the Ministry of Finance to inform on possibilities to extend the works completion deadlines stated in the EC Decision to September 2011 and the period of eligibility to 31 August 2012.

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Development of hazardous waste management system, stage I, No.2005/LV/16/C/PE/002

Works completed since 01/11/2007: Technological equipment, mechanisms and vehicles have

been delivered for operation of the hazardous waste landfill.Status of agreements:

All agreements in the framework of the project were signed (3 supplies, 1 services and 1 works agreement).

Implementation of 2 supplies agreements has been completed.

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Due to the fact that after all planned amendments to the agreement there will be a surplus of approx. EUR 400 thousand in the project budget the Ministry of Finance together with the State Hazardous Waste Management Agency will consider the possibility to prepare proposals for amendments to the EC Decision on including an additional component in the project, which may happen only after completion of the main stages of construction works. It is planned to complete construction works of the project in June 2008.

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Development of water services in Riga, stage III, No.2005/LV/16/C/PE/003 (I)

Status of agreements: 6 agreements signed in the

framework of the project (1 services agreement and 5 works agreements).

1 works agreement completed. It is planned to carry out 7 more

procurement procedures in the framework of the project.

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Development of water services in Riga, stage III, No.2005/LV/16/C/PE/003 (II)

Topical problems: Due to lengthy approval procedures of the technical design with

the responsible institutions delays were caused in drafting of procurement documentation for:

• Replacement of strategic water supply system valves and creation of water consumption registration zoning,

• Reconstruction of steel pipelines of water mains, • Separation of sewerage systems in Teika-

Čiekurkalns – construction of industrial sewerage, • Reconstruction of non-pumped flow sewerage

ceramic pipes, • Reconstruction of reinforced concrete pipelines of

water mains, • Expanding water supply and sewerage systems in

Dārzciems. There is a risk that 3 works agreements will not be

completed by the deadline stated in the EC Decision – 31/12/2009.

The value of agreements signed and the estimated total costs of tenders launched exceed the planned budget of the project.

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Development of water services in Riga, stage III, No.2005/LV/16/C/PE/003 (III)

Topical problems:

The component “Separation of sewerage systems in Teika-Čiekurkalns – reconstruction of the Sirius rainwater collector” will be implemented by splitting it in two stages. In stage I, the works agreement “Separation of sewerage systems in Teika-Čiekurkalns – reconstruction of the Sirius rainwater collector” will be implemented; in stage II, outlet of the collector will be constructed in Ķīšezers lake – this works agreement will be financed by Riga City Council and JSC “Rīgas ūdens”.

After completion of all procurements the need for making changes in the list of project physical indicators will be assessed.

Additional state budget funding was allocated to the project for covering the increase in costs, JSC “Rīgas ūdens” will finance 72% of this increase in costs.

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Solid waste management in Piejūra region, No.2005/LV/16/C/PE/004

Status of agreements: 8 agreements signed in the framework of

the project (4 works agreements 2 services and 2 supplies agreements).

In October 2008, 1 (last) procurement will be launched.________________________________

According to paragraph 25 of Minutes No.9 of the Cabinet sitting of 12/02/2008, additional state budget funding was allocated to the project for covering 85% of the increase in costs on condition that the beneficiary would co-finance 15% of the increase in costs.

Increase in costs: EUR 5,011,518.02 State budget (85%): EUR 4,259,790.31 Beneficiary (15%): EUR 751,727.71

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Solid waste management in Ziemeļlvidzeme region, stage II, No.2006/LV/16/C/PE/001

On 10/12/2007 the winding-up report and final declaration of expenditure of the project were approved by the European Commission.

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Technical assistance for the preparation of projects in water services sector in Latvia, No.2006/LV/16/C/PA/001

Status of agreements : All 15 planned services agreements have been signed in the framework of the

project. Implementation of 1 services agreement has been completed.

Within the framework of the project funds have been saved, and the Ministry of Environment is currently considering proposals on adding a new component to the project.

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