2. Developing a water policy outlook for Georgia
This chapter considers Georgia’s ambitions and outlook for its water sector including water-related obligations under the Association Agreement with the European Union and targets under multilateral environmental agreements including the Sustainable Development Goals. Obligations under the EU Water Framework Directive and associated directives are discussed, including time-bound commitments concerning the identification of river basin districts and preparation of river basin plans. The chapter considers Georgia’s current state of play with regard to water resources and pressures facing the sector. Finally, the chapter considers the existing policy and legislative framework and considers scenarios for possible future reforms.
Georgia and the European Union (EU) have established and maintained close ties, notably in the framework of the EU Eastern Partnership (EaP) starting in 2009. A new milestone was reached in 2014 with the signing of the EU-Georgia Association Agreement (AA), which entered into force in 2016. Through the AA, Georgia committed to align its national legislation with EU directives and to implement international standards, including in the fields of environment and water management.
The AA defines timeframes in which Georgia is expected to approximate the EU directives related to water quality and resource management, including the marine environment. All provisions need to be implemented by 2026, which will mark ten years of the AA’s entry into force. Of these directives, the Water Framework Directive (WFD) is the most crucial legal act concerning protection of water regulation. It aims to ensure the viable, socio-economic management of resources; protect the quantity and quality of water; and promote sustainable water use.
The AA transcends the WFD, extending to commitments more broadly related to the water sector, including the marine environment. Table 2.1 summarises the water-related EU directives, including provisions, timeframes for implementation as defined by the AA and status as of 2021. This assessment covers all water-related EU directives except the Floods Directive and the Marine Strategy Framework Directive.
Progress on all assessed provisions related to EU directives mentioned in Georgia’s AA is pending adoption of the draft law on water resources management, which will supplement the 1997 Law on Water. While the draft law is largely compatible with the sector-related directives prescribed in the AA, some elements are missing. See section 2.1.2.2. Legal framework for further information.
2.1.1. Water resources in Georgia
2.1.1.1. Water use and main pressures on water resources
Georgia enjoys plentiful water resources. Its annual renewable freshwater availability per capita is consistently the highest among EaP countries by a wide margin (e.g. 12 418 cubic metres [m3] in 2017 compared to 6 355 m3 in Belarus, the next EaP country in the ranking) (European Environment Agency, 2020[2]). As such, at the national level, Georgia does not suffer from water stress. Given the country’s stable population and water abstraction rates, Georgia does not face the same water security risks as many of its EaP peers.
Although water is abundant in Georgia, its quality due to anthropogenic factors varies widely. A prominent source of pollution is the discharge of untreated wastewater into surface waters. As shown in Figure 2.1(c), over a third of wastewater discharged into water bodies in Georgia is insufficiently treated. Therefore, water quality depends highly on the type of wastewater discharged and its level of treatment. Abstraction from surface water bodies for agricultural needs has more than doubled since 2003. Higher concentrations of agriculture-linked pollutants have been recorded near agricultural areas due to leaching (European Environment Agency, 2020[2]).
An additional challenge in Georgia is the population’s relatively low level of access to modern water supply and sanitation (WSS) systems (Figure 2.1[d]). The share of Georgians connected to public water supply systems and sanitation has consistently increased. However, as of 2019, a third of the population still lacked access to public water supply and about half did not have access to wastewater collection systems. Improving access to modern WSS services and minimising the discharge of untreated or insufficiently treated wastewater into surface water bodies should be key objectives in Georgia’s strategy to safeguard its water resources.
Source: Source: Author’s own elaboration based on GeoStat (2020[3]), Natural resources of Georgia and Environmental Protection 2019, National Statistics Office of Georgia, Tbilisi, https://www.geostat.ge/media/35351/Natural_resources_of_Georgia_and_environmental_protection_2019.pdf
Georgia relies on its water resources not only for domestic, agricultural and industrial use, but also for the vast majority of its power generation. Tensions between these competing uses have emerged, which are mentioned in the Irrigation Strategy of Georgia. A summary follows:
Irrigation and hydropower plants (HPPs) – Conflicts with HPPs occur during the irrigation season when large-scale power production occurs and rivers are at low flow. This problem is particularly intense when water used by HPPs is diverted outside the basin and, therefore, unavailable for downstream irrigation.
Irrigation and drinking water supply – Around 60% of Georgian drinking water comes from groundwater. Tbilisi and districts, including Bolnisi, Dmanisi, Marneuli and Tsalka, depend on surface water for their potable supply; a large portion of the capital’s supply is from the Tbilisi Reservoir. Since surface water is also used for irrigation, this creates a conflict between these two uses of surface water.
Different irrigation schemes along the same river – There can be several irrigation canals in a single river and competition between them increases when, in summer and autumn, water demand is high and supply is low.
The irrigation strategy highlights that Georgia is generously endowed with water resources, though availability varies greatly from season to season. In addition to its surface water resources, Georgia has abundant groundwater. Although it is little used at present, groundwater could be tapped for irrigation – particularly in drip irrigation systems.
The analysis of both surface water and groundwater hydrology has been severely handicapped by the virtual collapse of the national hydrologic data collection and analysis systems. Following the abrogation of the Amelioration Law in 2010, Georgia has lacked any legal framework for irrigation. Nevertheless, Georgian Amelioration (GA) plans to implement rehabilitation and modernisation of certain irrigation systems. In these cases, the strategy notes the development of primary, local level farmer-governed water user organisations to manage water delivery to individual farms.
By 2014, the irrigated area in Georgia had dwindled to one-tenth of the 400 000 hectares (ha) irrigated during the Soviet period. However, rehabilitation investment is expected to restore irrigation capacity to 200 000 ha by 2025. It will also increase water demand from around 150 million cubic metres (MCM), to around 900 MCM per year if the capacity is fully used.
The irrigation strategy also outlines some critical issues related to the draft Law on Water Resources Management. It suggests three fundamental challenges affecting the adequate provision of irrigation services:
ensuring the operation of facilities used to deliver water for irrigation
generating sufficient revenues to cover the operation and maintenance cost of those facilities.
These challenges are pertinent not only for irrigation systems but also for the general water infrastructure. Most of this infrastructure is outdated and requires rehabilitation.
Yet another challenge is outlined in the Agriculture and Rural Development Strategy of Georgia 2021-27. It relates to the inefficient use of water and its contamination by agricultural and non-agricultural enterprises. Consequently, in spite of the annual increase in irrigated area, some regional access to cheap water for irrigation is limited and the quality of water is deteriorating.
The National Strategy for Waste Management and the Action Plan addressed the contamination of surface water and groundwater. These identify at least one unofficial landfill in each Georgian region, leading to water contamination. The action plan therefore envisions the development of wastewater treatment plants with donor support.
2.1.1.2. Georgia’s water resources and river basins
Georgia has a rich natural endowment of water, but its availability varies greatly from season to season. Furthermore, water resources are unevenly distributed and are mainly accumulated in the western part of the country. There is also no formal system of water resource allocation in the country and amendments to the outdated law on water resources are still pending.
Georgia’s water resources are divided into two catchment areas. The western area flows to the Black Sea with a cumulative annual volume of 49.8 cubic kilometres (km3). Meanwhile, the eastern area empties into the Caspian Sea via Azerbaijan with a cumulative annual volume of 16.5 km3 (GeoStat, 2020[3]). Georgia plans to establish six territorial entities, or river basin districts (RBD), on its territory (section 2.1.1.2.1 River basin management plans): Alazani-Iori, Mtkvari (Kura), Khrami-Debeda, Rioni-Enguri, Chorokhi-Kintrishi (Chorokhi-Adjaristskali) and Bzipi-Kodori.
The EU-funded programme EU Water Initiative Plus (EUWI+) has been working on draft river basin management plans (RBMPs) and their implementation for three of the proposed RBDs: Alazani-Iori, Chorokhi-Adjaristkali and Khrami-Debeda.
2.1.1.2.1 River basin management plans
The draft law on water resources management (the draft law), and the subsequent draft resolution on the Approval of the Boundaries of Basin Territorial Entities of River Basin Management, define six RBDs. These are to be established within Georgian territory (all forms of basin management activity are to be carried out in these RBDs). The RBDs include Chorokhi-Kintrishi (Chorokhi-Adjaristskali), Alazani-Iori, Khrami-Debeda, Mtkvari (Kura), Rioni-Enguri and Bzipi-Kodori.
It is challenging to develop thorough and robust RBMPs that comply with the WFD. However, RBMPs are an obligatory component of the AA (2014). Within the Agreement, Georgia committed to developing and adopting WFD-compliant RBMPs for all its RBDs, including involvement of the public in consultations and publication. Plans should be implemented within ten years of signing the Agreement.
The draft law establishes RBDs as natural management units, based on certain geographical and hydrological characteristics. RBDs require RBMPs to develop, implement and address significant management issues for all water resources, including surface, ground, coastal and transitional waters. These plans should be reviewed and adjusted accordingly every six years.
The challenge of establishing RBMPs is illustrated by timing conflicts in the policy environment. Initial planning was scheduled between 2018-21 within the framework of the National Environmental Action Plan (NEAP). However, until the new draft law is adopted, river basin management-related activities cannot commence. The new draft law was expected to be adopted by the end of 2021, delaying the establishment of river basin management organisations and councils until then.
The Chorokhi-Adjaristskali RBMP – the first designed according to the main principles of the WFD methodology – attempted to accommodate AA requirements. The Chorokhi RBMP aimed to become a management tool to protect, enhance and restore water resources. It was intended for various institutions and key beneficiaries, including the Georgian Ministry of Environment.
The plan addresses significant water management issues, particularly those that pose risks to the ecological status of water bodies. To that end, it sets several environmental objectives and designs a Programme of Measures (PoM), and its content and structure follow the standard outline of the WFD.
Implementation of the plan has been delayed. Implementation of the first RBMP cycle was scheduled between 2016-21. However, since adoption of the draft law has been delayed, the plan is not enforced and is limited to recommendations.
Furthermore, the plan has two other major limitations. First, it lacks a water quality and quantity monitoring system compliant with the WFD. Second, it lacks a water body classification system to define the chemical and ecological status of water bodies in accordance with the WFD.
Within the basin, 34 surface water bodies are deemed “at risk”. This means they are subject to serious human pressure affecting their physio-chemical, hydromorphological and hydro-biological conditions. Moreover, nine of these at-risk surface water bodies were identified as heavily modified water bodies (HMWBs) due to their significant hydromorphological changes. In addition to these at-risk surface water bodies, several bodies are deemed “possibly at risk”, meaning they require more investigation.
Two other RBMPs that closely follow WFD principles and address AA obligations were developed with the technical and financial support of the EUWI+ project. Both the Alazani-Iori and the Khrami-Debeda basin districts are within transboundary spaces with Azerbaijan and Armenia. Indeed, this was the main reason they were selected as pilot locations for RBMPs. However, these RBMPs are not finalised and the following sections present only initial results.
Drafting an RBMP and implementation mechanisms for the Alazani and Iori river basins in line with WFD principles is difficult: lack of monitoring data prevents full alignment with the WFD. The Alazani-Iori RBD has 471 surface water bodies, of which 6% are considered “at risk”, 30% “possibly at risk” and 56% “not at risk”.
Regarding groundwater bodies, risk assessments showed that nitrate levels at 32 of 33 groundwater monitoring points did not exceed the maximum permissible concentration for drinking water quality (50 milligrammes per litre). Quantitative characteristics, including the discharge values of artesian aquifers, were also found to be mostly stable. However, many private and illegal wells may negatively impact groundwater bodies. Moreover, monitoring data are insufficient to assess all groundwater bodies and cannot provide the basis of risk evaluations according to the WFD.
Of the 347 surface water bodies in the district, roughly 13% are considered “at risk”, 49% “possibly at risk” and 26% “not at risk”. Risk assessment of groundwater bodies is limited by lack of data, with only two monitoring sites in the basin. Of these two points, both the concentrations of nitrate, as well as heavy metals and pesticides, did not exceed the maximum permissible concentrations for drinking water standards. Their quantitative characteristics were found to be mostly stable. Thus, none of the groundwater bodies are within the “at risk” category. Nevertheless, there are no structured methods for the aggregation of the groundwater monitoring data to offer a reliable assessment of the chemical and quantitative status.
2.1.1.2.2. Water management issues and pressures in Georgia’s river basin districts
Water management issues within the three districts are quite similar and require management interventions to align with the WFD (Table 2.2).
Environmental objectives were developed for the “at risk” surface water bodies to overcome the challenges in river basin management. A classification system (ecological and chemical) for surface water bodies does not yet exist in Georgia. Therefore, the major criteria for setting environmental objectives were the risk status for any given water body.
The environmental objectives for RBMPs are mainly targeted towards improvement of the ecological and chemical status of surface water bodies, as well as the quantitative and qualitative status of groundwater bodies. Objectives for surface water bodies include elements of their physio-chemical and hydromorphological quality, reducing or eliminating, where possible, the risk factors (significant pressures). Table 2.3 outlines the environmental objectives of the RBMPs.
Eight of nine HMWBs within the Chorokhi-Adjaristskali RBD are located within a section of the Chorokhi River that is regulated by a series of hydropower plants in Turkey. Owing to a lack of transboundary co-operation, Georgia cannot manage these HMWBs. As the Georgian government cannot impose any measures to improve their status, these bodies fall outside the pursuit of Environmental Objectives.
2.1.1.2.3. Programme of measures
To achieve the environmental objectives set in the RBMPs, several basic and supplementary measures were proposed. However, due to limited resources and funding, neither RBMP adopted all measures as “priority” in the first implementation RBMP cycles.
Programme of measures for the Alazani-Iori RBMP
The PoM, both basic and supplementary, for the Alazani-Iori RBMP proposes adoption of 28 priority measures (19 basic and 9 supplementary) in the first RBMP implementation cycle. From the selected measures, activities aimed at renovation of the sewerage system and construction of wastewater treatment plants (WWTP) to address the point source pressures from urban wastewater discharge. Diffuse source pollution (crop production and livestock) is addressed by various measures. These include renovating agricultural drainage systems, building buffer strips and hedges and producing vermicompost (bio-humus), among others. It proposes to rehabilitate the malfunctioning irrigation infrastructure to address excessive irrigation water abstraction. Other measures include improving access to information through education campaigns, training, publicity and other methods; identifying pressures caused by sand and gravel extraction; monitoring illegal landfills; sanctioning illegal waste disposal; creating sanitary protection zones; and assessing the possible impact of climate change on water bodies.
Programme of measures for the Khrami-Debeda RBMP
The PoM, both basic and supplementary, for the Khrami-Debeda RBMP proposes adoption of 49 priority measures (41 basic and 8 supplementary) in the first RBMP implementation cycle. Its basic measures are similar to those of the Alazani-Iori RBMP. However, they also include reducing point source pollution from mining.
2.1.1.2.4. Economic analysis of the planned programmes of measures
The PoM was identified and financially evaluated (see section below for the Chorokhi-Adjaristskali RBMP and Table 2.4) to understand the financial requirements of the RBMPs. The evaluation aimed to identify the cost-effectiveness of both basic and supplementary measures in the Alazani-Iori and Khrami-Debeda RBMPs, and as a tool to prioritise aid. Cost-effectiveness analysis involved an ecological effectiveness assessment, pricing the basic measures and prioritisation based on cost-effectiveness. These costs will be incurred over a six-year period, corresponding to the first implementation timeframe of the RBMPs.
Analysis of the Chorokhi-Adjaristskali RBMP programme of measures
The direct capital and annual operational expenses of basic structural measures could only be estimated due to insufficient data. Consequently, the analysis used three classes of measures:1 low cost (under EUR 50 000), medium cost (between EUR 50 000-500 000) and high cost (over EUR 500 000). Of the 34 assessed measures, roughly 70% were deemed as high cost, 26.5% were medium cost and 3% were low cost. The state, donors and non-governmental organisations will fund implementation of the measures. Private funding will implement measures related to enterprises, such as wastewaters at the Batumi Oil terminal.
Economic analysis of basic and supplementary measures for the Alazani-Iori RBMP
Eight different basic measures and five supplementary measures were identified and financially evaluated for the Alazani-Iori RBMP. The basic measures include rehabilitating the main channel, and the wastewater network and sewerage system; renovating the agricultural drainage system; building a wastewater treatment plant and vermicompost; and creating buffer strips and hedges. Supplementary measures include implementing a water resource monitoring programme; controlling water abstraction volumes through economic instruments; training farmers in efficient water use; developing publicity campaigns; and strengthening the hydrological monitoring system.
Implementing these measures is expected to generate significant benefits for water users, but changes may also lead to increased tariffs. The Alazani-Iori RBMP notes that “due to the clear disconnect between the water tariffs and the costs to manage and run the system, it is impossible at this stage to estimate the impact of the implementation of the programmes on the final costs to consumers and companies.”
Based on existing data, 67% of investment costs for the planned basic measures will be funded through the state budget and 33% from international organisations. Water supply companies are expected to absorb operational costs.
The analysis also highlights the importance of accurately defined economic instruments, particularly irrigation tariffs. Given tariffs fail to incorporate annual water supply costs, a review could address inefficient use of water.
Additionally, it suggests that local authorities should manage supplementary measures, including implementation of a water resource monitoring programme. This highlights the role of river basin organisations as supporting mechanisms in the RBMP process.
Economic analysis of basic and supplementary measures for the Khrami-Debeda RBMP
Within the Khrami-Debeda RBMP, nine different basic measures and five different supplementary measures were identified for economic analysis. The basic measures include rehabilitating the main channel and canal; renovating local irrigation systems; building vermicompost; setting buffer strips and hedges; building a chemical wastewater treatment plant and pumping station; and renovating or constructing a sewerage system. Supplementary measures are similar to the Alazani-Iori RBMP.
Based on the economic analysis, international organisations (such as the Asian Development Bank) will fund 94.6% of the investment in planned basic measures. Government will fund the remaining 5.4%. Water supply companies are expected to absorb the operational costs of basic measures.
The Khrami-Debeda has similar challenges as the Alazani-Iori RBMP. These include problems associated with higher water supply tariffs, an inefficient irrigation tariff structure and the responsibility of local authorities in the implementation of supplementary measures.
In both plans’ operational costs, the differences between the best- and worst-case scenarios are significant. Considering that water supply companies fund operational costs (as per the RBMPs), potential funding risks in the worst-case scenarios become more apparent.
2.1.2. Georgia’s policy, legal and institutional framework
The water management environment in Georgia can be viewed through legal, regulatory, institutional and policy lenses. Broadly, there are opportunities within these frameworks for improving effective water resource management. There is also room to improve alignment with EU directives and the AA.
The legislative framework makes several administrative bodies responsible for various water-related matters, which fragments management. Similarly, Georgia’s regulatory framework is considered relatively complex, and the system is siloed, often without a unified approach. Institutional responsibilities, although formally disseminated at the national and local levels, are centralised due to limitations at the local level. The policy framework would benefit from a comprehensive strategic vision, supported by a results-oriented approach and consistent actions for policy development.
2.1.2.1. Policy framework
Georgia’s water resource management approach is driven by its international obligations in the framework of the AA and the Deep and Comprehensive Free Trade Area. There is no unified policy document on water resource management but rather several strategic documents outlining the government’s vision. All strategies strive to contribute to universal and equitable access to safe and affordable water, adequate sanitation and hygiene, a reduction in water-borne diseases, and fewer illnesses and fatalities from water pollution and contamination.
The principle policy document is Georgia’s Socio-Economic Development Strategy – Georgia 2020 (hereafter “Georgia 2020”), which defines strategic objectives for water supply and wastewater. It aims to provide a 24-hour, high-quality drinking water supply for the population, and to ensure improvement and effective functioning of water supply and sewerage systems. To that end, the government aims to transition to the EU model of river basin management systems, embracing the importance of water supply, drainage and waste management.
The strategy notes the EU model allows policy makers to manage water resources more consistently because of its common management system for all water resources (rivers, lakes, underground reserves, etc.). The common system also ensures better distribution of resources among water users (for energy, irrigation, recreation and other purposes).
Although Georgia 2020 came into effect in 2014, a new water resource management system has still not been implemented. Thus, there has been a slow transition to an integrated water resource management (IWRM) system based on the sustainable management of water resources and river basin management principles. The government continues to improve water monitoring, evaluation and water usage systems.
Other key water policy documents are the Third National Environmental Action Programme (NEAP) and the National Environmental and Health Plan (NEHAP). In relation to water resources, NEAP (2017-21) aims to ensure the sufficient qualitative and quantitative status of surface, ground and coastal waters for human health and aquatic ecosystems. NEHAP’s (2018-22) primary strategic objective is to improve access to safe water and sanitation for every child; reaching this objective is also crucial for attaining the UN Sustainable Development Goal 6.
Other policy documents include the 2018-20 Regional Development Program of Georgia, the 2019-23 Strategy on the Development of High Mountainous Areas, and the 2020-22 Integrated Development Program of Pilot Regions of Georgia. These also identify the goals of improvement of citizens’ quality of life via the supply of uninterrupted, potable water. To achieve this, Georgia plans to modernise and develop water and sewerage networks through, for example, construction and rehabilitation of treatment plants throughout the country (excluding autonomous republic territories and Tbilisi city).
Broadly, the strategies define the need for improvements and alignment with EU directives. However, the overall strategic vision is not comprehensive. It lacks a results-oriented approach, and crucially, does not propose consistent actions for policy development.
2.1.2.2. Legal framework
The legal water management and protection framework consists of various legislative acts, including those related to environmental concerns. However, the legislative framework has ambiguities and shortcomings that can complicate water management efficiency. The principal piece of national water legislation is the Law of Georgia on Water (1997) (the Water Law), which regulates the Georgian water resource management system. The Water Law establishes the major objectives and principles of water resource management policy. However, it cannot be considered as a strong foundation to establish an efficient water resource management system. It is under review, although proposed changes have not yet been implemented. Table 2.5 identifies the shortcomings and strengths of the Water Law along with other major pieces of legislation.
The Georgian government has drafted a law to align water resource management with the major principles and approaches in relevant EU directives and to fulfil AA obligations. The draft law covers surface water bodies and underground fresh water and stipulates quantity and quality regulation (the Law on Subsoil still regulates the use of groundwater). Although yet to be adopted, the draft law can be considered robust and well aligned with EU objectives, overcoming the major legislative gaps. Broadly, it will establish a legal framework for water resource regulation and provide better understanding of the distribution of powers among responsible institutions. However, in some instances the law must be supplemented by updated regulation or subordinate legal acts.
The draft law fully complies with the WFD. It establishes an IWRM system, using the principles of river basin management. It designates responsible agencies and fulfils the requirements of relevant WFD provisions. It also provides specifications for preparation of RBMPs, ensures public participation in discussions and sets obligations for their publication. More precisely, the government will determine river basin boundaries via adoption of the relevant resolution.
To overcome legislative shortcomings, the draft law establishes a classification system for water bodies; sets objectives and standards for water quality; provides water pollution prevention measures; establishes a monitoring and enforcement system, including monitoring programmes; classifies river basin districts; and ensures public participation. In another key feature, it establishes a permission system for abstraction from and discharge into surface waters, together with fees for water usage.
The draft law also provides new institutional arrangements for water resource management. It clearly and systematically defines the responsibilities and obligations of governmental agencies and municipalities in water resource regulation processes. For example, it will establish river basin management consultancy councils as advisory bodies to the Ministry of Environmental Protection and Agriculture of Georgia (MEPA). These councils will also examine RBMPs before government approval.
While the draft law is largely compatible with the sector-related directives prescribed in the AA, some elements are missing. The law includes state obligations to adopt specific sector-related legislation to fill the remaining gaps. For example, the draft law incorporates the main principles determined by EU directives on urban wastewater and drinking water that must be reflected in national legislation. However, other governmental resolutions will regulate rules to identify and determine boundaries for water bodies, water resource monitoring systems, surface water quality standards and other issues.
Further, the draft laws lack specific regulations for nitrate pollution. Consequently, several nitrate-related acts will be passed after adoption of the draft law, within the timeframe prescribed. By the end of 2021, for example, MEPA is to identify nitrate-contaminated areas and surface waters at risk of contamination, and areas vulnerable to nitrates. It will conduct the same process for groundwater by the end of 2022. Furthermore, by the end of 2022, MEPA also aims to identify sensitive areas and agglomerations at risk of exposure to urban wastewater. With such considerations, the river basin management system is regarded as the most appropriate mechanism to ensure sustainable development and maintain the appropriate quality of water resources.
Broadly, the draft law complies with the WFD and provides the foundation for robust water management. However, Parliament needs to approve the law, and the subordinate acts and regulations must be adopted to align Georgian water management with that of the European Union.
Gaps in legislation hinder establishment of a modern water resource management system. Georgia lacks a unified water framework that would regulate all forms of water bodies, including groundwater. This means water management is siloed and fragmented. The absence of a framework also leads to gaps in legislation, including the need for rules to improve water quality.
Building a more systematic legal basis for water management could help establish an IWRM system. Legislative gaps in licensing of surface water abstraction and water discharging lead to difficulties in both monitoring and controlling water use. Strengthened legislation in these areas could help protect and manage water resources more effectively.
2.1.2.3. Regulatory framework
The following table considers the major regulatory acts that govern water sector management.
Developing regulation would strengthen water resource management. Issues with regulation include the lack of a common vision and approach by both the state and regulatory bodies, a lack of tariffs for surface water abstraction, and weak and underdeveloped water monitoring and control systems for planning and implementing water management activities. Regarding monitoring, the regulatory framework must provide specific criteria to evaluate water quality and quantity. Controlling, monitoring and creating integrated databases would further support robust water management.
2.1.2.4. Institutional framework
Institutional responsibilities for water resource management are split between the national and local levels. However, due to limitations at local levels, the system is largely centralised. Co-operation between agencies is difficult and their functions are not oriented towards solving the system’s obstacles. Further, decentralisation of powers between central and local governments is often unfeasible due to resource limitations and issues with timely co-ordination and co-operation among agencies.
The functions of each institution are prescribed in relevant laws and subordinate legal acts, but the regulatory system still lacks a unified governing strategy to co-ordinate their work efficiently. Regulation is limited at the local level due to the weak institutional, professional and financial capacities of municipalities. These weaknesses mean they often cannot exercise their prescribed responsibilities. Some municipalities build appropriate water supply infrastructure. However, due to limited resources, they generally transfer operation and maintenance to the United Water Supply Company of Georgia (UWSCG). This further centralises operations.
Institutional issues that hinder robust water management include the following:
Lack of co-ordination between institutions: the institutional framework lacks a mechanism for co-ordinating roles and responsibilities, including their interactions with other stakeholders.
Limited ability to decentralise powers between central and local governments: local governments are hindered by resource limitations and issues with timely co-ordination and co-operation among agencies.
Weaknesses in municipalities’ capabilities due to resource and financing limitations.
Lack of public awareness on the rational and sustainable use of water resources.
Lack of information, skills and knowledge on modern water resource management.
Lack of public participation in the development of strong institutions and sustainable use of water resources.
Overcoming these institutional limitations could improve the functioning of the water sector and increase efficiencies in water management.
2.2.1. Scenarios
The two reform scenarios are similar to NEAP and the AA Roadmap for most key activities but differ in their projected timeframes. The full-reform scenario assumes all tasks planned for 2021 will be completed by 2022. It relies on strategic documents and expert assessment for the remaining activities. The alternative full-reform scenario adjusts the activity timeframe by considering the various challenges in reform implementation. A third option, the alternative full-reform sub-scenario, further considers not implementing some construction due to unsecured funding (discussed in the funding section).
The scenarios assume complementary acts or legislation exist to support the main pieces of legislation (for example, the draft Law on Water Resources Management). Table 2.6summarises the timeline for activities within the full-reform and alternative full-reform scenarios, as well as the initial timeframes set by NEAP and the AA Roadmap. Meanwhile, Table 2.7 summarises each of the scenarios, their outcomes, and the associated risks and challenges.
2.2.1.1. Full-reform scenario
In the full-reform scenario, the draft Law on Water Resources Management would be adopted by the end of 2021. However, it would still require complementary normative acts or other pieces of legislation to address all obligations within EU mandates. This scenario aims to improve water resources management and ensure sustainable water use, reduce water resource pollution, and improve water quality and quantity monitoring. Required actions do not fall within the NEAP timeframe. Thus, it is unlikely that the full-reform scenario will be met.
2.2.1.2. Alternative full-reform scenario
The alternative full-reform scenario also assumes adoption of the draft law by the end of 2021 and considers the same key activities as the full-reform scenario. The alternative scenario differs by recasting governmental strategic ambition and setting more realistic timeframes (see Table 2.8). The alternative sub-scenario also considers the probability that some infrastructural projects will not occur and adjusts costs accordingly.
Differences in the reform scenarios stem from concerns regarding the delayed adoption of the draft law and consequent activities, setbacks in wastewater treatment plant construction due to local resistance, COVID-19 restrictions and prolonged tender procedures. However, consistent effort over the next ten years should allow enough time to regulate the legal framework and implement the planned actions. This implies the alternative full-reform scenario is more realistic.
Further, efforts will require significant human and financial resources from the state. The private sector will need to prepare for changes as the economy improves. This, in turn, will influence the success of water resource management policies. All of this is more realistic over a gradual timeframe.
2.2.2. Financing each scenario
The following section offers an overview of the major costs2 associated with the scenarios and presents the respective additional costs.3 The baseline scenario costs are not calculated considering there are no changes to the policy framework and the financial requirements remain the same; in 2018, the public budget expenditure was GEL185.3 million.
Differences in the reform scenarios by recasting certain activities into the future do not yield huge differences in the financial needs of the scenarios. Table 2.6 summarises the total discounted additional costs for each scenario. The timeframe for other financial requirements, including expenses for additional personnel, equipment and maintenance, continues until 2030. Further analysis is presented in Table 2.10, which compares the economic, social and environmental impacts, and financial requirements, within the different scenarios to the baseline.
The greatest share of costs in both scenarios (98.8%) is associated with wastewater treatment plant and water supply and sanitation (WSS) projects. This means that costs may be a limiting factor to progress if funding requirements are unmet or difficult to obtain. Funding risks, arising from the large amount of funding sourced from donors, may also limit progress. In the alternative full-reform scenario, 82.2% of projects are donor-funded with the rest government-funded. However, donor funding risks are low because 91.8% of total funded projects are already in donor pipelines and 8.2% are ongoing. Of government-funded projects (GEL 138.5 mil), 34.2% are allocated to ongoing projects and 65.8% to planned projects. This represents a moderate risk for scenario progress; unforeseen circumstances may alter government funding priorities and make water management less urgent.
The present value for the “other” financial requirements represents only 1.2% of total financial requirements in the alternative full-reform scenario. From these total costs, 9.9% will be funded by donors and 90.1% by the government. The alternative full-reform sub-scenario costs considerably less (GEL 697.2 mil) as it excludes the part of infrastructure projects for which donor funding is not yet secured. This reduces the risk of slow progress, although it means reforms are less thorough. In this scenario, the cost of government-funded projects (ongoing and planned) remains the same. This means that funding risks are the same as in the other scenarios.
2.2.2.1. Financing the full-reform scenario
The full-reform scenario activities (see Table 2.11) consider various cost categories. These include the development of the remaining RBMPs; development of follow-up plans for each river basin; and additional staffing requirements, equipment and maintenance for MEPA and river basin organisations. “Other” financial requirements considered include the wastewater treatment plans and WSS capital costs (to be incurred by UWSCG).
The cost of developing the two remaining RBMPs (Mtkvari [Kura] and Rioni-Enguri) is included in the total scenario cost. However, it also includes financial support from donors. Follow-up plans (six years after adoption) for each river basin should be developed by 2027 for the Chorokhi, Alazani-Iori and Khrami-Debeda river basins, and by 2030 for the Mtkvari (Kura) and Rioni-Enguri river basins. Financial support from donors is also considered here, although uncertainty remains.
Calculation of the present value of total costs assumes adoption of the draft law by the end of 2021 and that all associated activities will be implemented from 2022 – within the timeline of the government’s strategic plans and the EU Roadmap. For WWTP and WSS projects, timeframes are based on information provided by UWSCG.
2.2.2.2. Financing the alternative full-reform scenario and the alternative sub-scenario
The cost categories of the alternative full-reform scenario are the same as the full-reform scenario. However, the longer timeframes in the alternative scenario mean costs are distributed over a more pragmatic schedule. Additional personnel, equipment and maintenance costs of Mtkvari (Kura) and Enguri-Rioni river basin management organisations (RBMOs) are incurred from 2025, in lieu of 2022, and of the remaining RBMOs from 2023, instead of 2022. The UWSCG rehabilitation and construction costs for wastewater treatment plants are allocated over a more realistic timeframe – from 2020 to 2025. Additionally, the alternative sub-scenario considers the probability that some of the WWTP projects might not be implemented due to funding uncertainties from donor institutions.4 For such projects, an implementation probability of 0.5 is assumed.
2.2.3. Progress monitoring indicators
Progress monitoring indicators aim to track improvements in water resource management and the sustainable use of water, reductions in water resource pollution, and improvements in water quality and quantity monitoring. Some indicators are easy to track, such as determining whether the law on water resources management is adopted. However, others will require more work to measure progress, such as the value of environmental services and how this informs penalties for environmental damage. In this sense, tracking indicators to determine progress against directives is another element that project implementation should consider. Table 2.12 presents the required activities with the relevant progress monitoring indicators.
References
[4] Balmer, P. and B. Mattsson (1994), “Wastewater Treatment Plan Operation Costs”, Pergamon, pp. 7-15.
[2] European Environment Agency (2020), Water availability, surface water quality and water use in Eastern Partnership countries: An indicator-based assessment, https://www.eea.europa.eu/publications/regional-water-report.
[1] European Union (2014), “Association agreement between the European Union and the European Atomic Energy Community and their Member S tates, of the one part, and Georgia, of the other part”, Official Journal of the European Union I. 261/4, https://eur-lex.europa.eu/legal-content/en/TXT/PDF/?uri=CELEX:22014A0830(02).
[3] GeoStat (2020), Natural resources of Georgia and Environmental Protection 2019, https://www.geostat.ge/media/35351/Natural_resources_of_Georgia_and_environmental_protection_2019.pdf.
Notes
← 1. Because the RBMP does not estimate the cost of some measures, the total cost of measures cannot be calculated.
← 2. A real interest rate of 7.2% is assumed in the calculation of the present value (PV) of total additional costs.
← 3. The nominal interest rate on eight- and ten-year government bonds (April 2020), corrected by the targeted inflation rate of 3%.
← 4. Based on consultation with UWSCG, donor funding for some projects is not yet secured and the process of negotiations is ongoing.