“On additional measures for developing the drinking water and sewage systems in the Republic of Uzbekistan”

In recent years, considerable work has been carried out in the country to provide high-quality drinking water to the population, primarily those living in rural areas.

Projects for the construction and reconstruction of water supply and sewage networks are being consistently implemented, including through the programs “Obod qishloq” (Prosperous village) and “Obod makhalla” (Prosperous local community).

However, despite the measures taken, there are still a number of unresolved problems in the field of drinking water supply and sanitation, impeding the implementation of the planned activities.

In particular, one of the reasons for the wasteful use of water and the increase in unproductive costs is the lack of metering devices for drinking water consumption, as well as a unified system that provides for the input, storage, periodic updating and online monitoring of all necessary information on water supply and sewerage facilities.

Inefficient operation of water supply networks and facilities, as well as the lack of reliable funding for projects to modernize and upgrade fixed assets in the field have led to high wear and tear of equipment, especially in rural areas.

Due attention is not paid to the construction of sewage systems in settlements and the connection of apartment houses being constructed.

The weak introduction of modern forms and methods of management, low personnel potential does not allow for the effective management and operation of water supply and sewage facilities.

In order to further improve the quality of services in the field of water supply and sewage, the efficiency of enterprises in the industry, create reliable sources of financing, including attracting direct, primarily foreign investment, as well as developing public-private partnership:

1.            To determine the following as priority directions for further development of water supply and sewage systems:

Phased introduction of advanced foreign experience in the management and operation of water supply and sewerage enterprises, including on the terms of public-private partnerships;

Introduction of modern information and resource-saving technologies, providing accounting and monitoring in the field of water supply and sewage, equipping all consumers of the republic with modern drinking water metering devices;

Designing, construction and reconstruction of sewage facilities at the same time as drinking water supply facilities in order to ensure sanitary requirements during the construction of residential complexes, including the usage of local cleaning facilities;

Strengthening the financial sustainability of water supply and sewage enterprises by developing a new tariff policy that ensures full cost recovery for the production and sale of drinking water, which helps to attract the private sector to manage and operate water supply and sewage facilities;

Improving the system of training, retraining and advanced training of specialists in the field of water supply and sanitation based on advanced foreign experience.

 

2. The Ministry of Housing and Communal Services jointly with the Ministry of Economy, the Ministry of Finance and other departments, with the assistance of international consultants, by September 1, 2019, ensure that the draft Concept of development of the water supply and sewerage industry in the Republic of Uzbekistan in the Republic of Uzbekistan in the years of 2020-2024 is submitted to the Cabinet of Ministers of the Republic of Uzbekistan (hereinafter - the Concept), providing:

Comprehensive analysis of the current state and development trends of the water supply and sewage industry;

Targets for the provision of drinking water and sanitation services;

Involving the private sector into the management and operation of water supply and sewage facilities;

Measures to increase the investment attractiveness of the industry, attracting direct, especially foreign investments;

Introduction of advanced information and communication technologies and innovative solutions, as well as modern drinking water metering devices.

The State Committee for Investments and the Ministry of Finance of the Republic of Uzbekistan, within two months, should identify specific sources of financing for the development of the draft Concept at the expense of technical assistance from international financial institutions and foreign government financial organizations.

3. To approve:

Targeted program and network schedules for construction and reconstruction of water supply and sewage facilities, carried out in 2019 due to limits of centralized capital investments within the framework of the State Budget of the Republic of Uzbekistan, in accordance with Appendices No. 1.1-1.15;

Targeted program and network schedule of construction and reconstruction of water supply and sewage facilities, implemented in 2019 with the participation of international financial institutions and foreign government financial organizations, according to Appendices No. 2.1-2.2.

4. It should be taken into account that, according to the results of the World Bank mission held in February 2017, the World Bank confirmed the extension by June 30, 2019 of the closing date of credit No. 4869-UZ under the project “Improving water supply to regional centers and rural settlements of Bayaut, Khavas, Mirzaabad , Sardoba and Akaltyn districts of the Syrdarya region” with the participation of the International Development Association, approved by the Decree of the President of the Republic of Uzbekistan dated August 28, 2011, No.1610.

Agree with the proposal of the Ministry of Housing and Communal Services, the Ministry of Finance, the State Committee of the Republic of Uzbekistan For investments to extend the project implementation period by June 30, 2019.

5. To release legal entities - non-residents of the Republic of Uzbekistan from payment of income tax of legal entities, received from the performance of works and services within the framework of the projects:

“Modernization of the interregional Damhoji water pipeline with the connection to it of the regional centers of Navoi and Bukhara regions. Reconstruction of the sewage system of Termez”, approved by the Decree of the President of the Republic of Uzbekistan dated April 16, 2010 No.1324;

“Reconstruction of water supply and sewage systems in the cities of Kokand and Andijan and water supply systems in the cities of Ferghana, Marghilan and the Rishtan district centers”, approved by Decree of the President of the Republic of Uzbekistan dated July 30, 2010 No.1378.

6. To determine that the amount of funds released as a result of the provision of tax benefits is the contribution of the Republic of Uzbekistan to the implementation of the projects referred to in paragraph 5 of this resolution.

7. To transform the "Clean Drinking Water" Foundation under the Ministry of Finance of the Republic of Uzbekistan into the Foundation for the Development of Water Supply and Sewerage Systems under the Ministry of Finance of the Republic of Uzbekistan (hereinafter referred to as the Foundation), entrusting it with additional tasks of financing programs and projects for the construction and reconstruction of sewage facilities.

To form the initial capital of the Fund in the amount of $ 248.1 million from the following sources:

Centralized capital investments in the framework of the State Budget of the Republic of Uzbekistan for 2019, directed to the construction and modernization of water supply and sewage networks - in the equivalent of 131.8 million US dollars;

Concessional loans from the international financial institutions and foreign government financial organizations – in the amount of 95.6 million US dollars;

Free balances of the budget of the Republic of Karakalpakstan, the budgets of the regions, the budget of the city of Tashkent, determined at the beginning of 2019, equivalent to $ 20.7 million.

The State Committee of the Republic of Uzbekistan for investments, by April 1, 2019, should take measures to attract loans from international financial institutions to finance the construction and reconstruction of water supply and sewerage facilities.

8. To the Ministry of Finance of the Republic of Uzbekistan:

Approve, within a month, the regulation on the procedure for the formation and use of the Fund’s resources, providing for an integrated approach to financing the construction and reconstruction of water supply and sewage facilities;

To allow financing of projects for the construction and reconstruction of water supply and sewage facilities through treasury personal accounts of the Foundation opened in the information system of the Ministry of Finance of the Republic of Uzbekistan.

9. The Ministry of Housing and Communal Services jointly with the State Committee for Investments, the Agency for the Development of Public-Private Partnerships under the Ministry of Finance of the Republic of Uzbekistan, regional and city administrations:

Within two months, take measures to implement the project on the terms of a public-private partnership for the modernization and management of the water supply and sewage system of the city of Tashkent with the involvement of foreign consultants;

Based on the implemented pilot projects in Andijan, Namangan, Syrdarya and Fergana regions with the participation of grants from the Government of the Swiss Confederation, by April 1, 2019, submit proposals to the Cabinet of Ministers of the Republic of Uzbekistan to distribute this proven form of management and operation of water supply and sewage facilities in other rural areas;

By July 1, 2019, prepare the necessary documentation and hold a tender for the transfer of water supply and sewage systems to the cities of Samarkand, Bukhara, Namangan and Karshi under public-private partnership.

 

10. The Ministry of Housing and Communal Services, jointly with the State Committee on Ecology and Environmental Protection, on the basis of studying international experience, within three months, should submit to the Cabinet of Ministers of the Republic of Uzbekistan proposals on the effective use of residual sludge formed in sewage treatment plants, under public-private partnership conditions.

11. To release legal entities that have concluded agreements on public-private partnership in the field of water supply and sewage for a period of 3 years from the date of signing of the relevant agreement from payment:

All types of taxes and obligatory payments, with the exception of a single social payment;

Customs payments (with the exception of customs clearance fees) for the import of equipment, components, spare parts and materials not produced in the republic according to the lists formed in the prescribed manner.

12. The Ministry of Finance, Ministry of Economy, Ministry of Housing and Communal Services, jointly with other related departments, by April 1, 2019, submit to the Cabinet of Ministers of the Republic of Uzbekistan a draft Regulation on the procedure for forming, declaring (approving) and setting regulated prices (tariffs) for services of water supply and sewerage, stipulating the order in which tariffs for consumers must cover the full cost of providing the service, as well as take into account development costs and modernize water supply and sewerage enterprises.

13. In formulating the State Development Program of the Republic of Uzbekistan for the coming years, the State Committee for Investments, the Ministry of Finance, the Ministry of Housing and Communal Services should provide budget funds for the development of feasibility studies for water supply and sewage projects implemented with the participation of international financial institutions and foreign government financial organizations.

14. The Ministry of Water Management of the Republic of Uzbekistan, the Council of Ministers of the Republic of Karakalpakstan, administrations of regions and the city of Tashkent supply water resources from natural and artificial reservoirs to water supply and sewerage enterprises as a matter of priority, provided there is a guaranteed debit of water reserves.

15. The State Committee of the Republic of Uzbekistan on Geology and Mineral Resources shall ensure the implementation of:

Hydrogeological works in terms of identifying water supplies for water supply of cities, district centers and rural settlements included in targeted programs for 2019, approved by the current resolution;

Hydrogeological works under the program of construction and reconstruction of drinking water supply and sewage systems for 2020 in accordance with Appendix No. 3.

16. To prohibit the construction of water supply facilities without hydrogeological works and obtaining the relevant conclusions of the State Committee of the Republic of Uzbekistan on Geology and Mineral Resources on the availability of drinking groundwater.

17. Agree with the proposal of the Ministry of Housing and Communal Services and the Ministry of Finance of the Republic of Uzbekistan on:

the establishment of a special surcharge on tariffs for sewage services, the amount of which is approved by the Council of Ministers of the Republic of Karakalpakstan, regional and city administrations of Tashkent city in coordination with territorial financial bodies;

creating territorial departments of the State Unitary Enterprise “Engineering Company for the Construction of Water Supply and Sewerage Facilities” in all regions of the country (with the exception of Tashkent city) on the basis of four interregional branches to ensure coordination and implementation of targeted programs for the construction and reconstruction of water supply and sewage facilities for 2019 and subsequent years at the expenses of the Fund.

Determine that:

a) The amount of special allowance for tariffs for sewage services is:

Earmarked income and is not included in the taxable base when calculating all types of taxes and other obligatory payments, and is not subject to reflection in the statement of financial results of water supply and sanitation enterprises;

An additional source of formation of funds of the Housing and Communal industry development Fund of the Ministry of Housing and Communal services of the Republic of Uzbekistan;

b) Starting from January 1, 2019, compensation payments for environmental pollution and waste disposal on the territory of the Republic of Uzbekistan in relation to sewage discharge are charged by the Ministry of Housing and Communal services of the Republic of Uzbekistan and are distributed as follows:

74 percent to the Housing and Communal Services Development Fund of the Ministry of Housing and Communal Services of the Republic of Uzbekistan;

26 percent - to the republican budget of the Republic of Uzbekistan.

18. The Chamber of Accounts, jointly with the State Committee on Ecology and Environmental Protection and the General Prosecutor’s Office of the Republic of Uzbekistan, within two months conduct a critical analysis of the accounting system, the full coverage of taxpayers, as well as the established amounts of charges for excessive discharge of wastewater, and make proposals for improving legislation and law enforcement system practice in this area.

19. To the Ministry of Housing and Communal Services of the Republic of Uzbekistan:

a) Together with the Ministry of Finance of the Republic of Uzbekistan:

By June 1, 2019, identify sources of financing the purchase of modern drinking water meters and related equipment in the years of 2019-2021;

By July 1, 2019, to ensure the approval of installation schedules in 2019-2021 for modern drinking water metering equipment in the context of settlements and water supply facilities;

b) in cooperation with the Agency for the Development of Public-Private Partnerships under the Ministry of Finance of the Republic of Uzbekistan, the State Committee of the Republic of Uzbekistan for Investments, the Council of Ministers of the Republic of Karakalpakstan, administrations of regions and the city of Tashkent until July 1, 2019 to ensure:

preparation of proposals for the implementation of investment projects on the terms of a public-private partnership for the modernization, effective management and operation of water supply and sewerage facilities, including the arrangement of local treatment facilities;

negotiations and the formation of an open list of qualified private operator companies (private partners) with the aim of their further involvement on the terms of a public-private partnership in the management and maintenance of water supply and sewage facilities, including local treatment plants in rural areas.

c) in cooperation with the Ministry of Higher and Secondary Specialized Education, the Ministry of Labor and Employment, the Ministry of Construction of the Republic of Uzbekistan, the Council of Ministers of the Republic of Karakalpakstan, regional and city khokimiyats of Tashkent, within three months, submit proposals to the Cabinet of Ministers of the Republic of Uzbekistan to improve the system of training, retraining and advanced training personnel of water supply and sewage enterprises, including the opening of branches (joint faculties) of higher foreign education institutions specializing in training in the provision of water supply and sewage services;

d) jointly with the Agency for the Development of Public-Private Partnerships under the Ministry of Finance, the Ministry of Construction of the Republic of Uzbekistan, the Council of Ministers of the Republic of Karakalpakstan, administrations of regions and Tashkent city in the three-month period:

submit for approval to the Cabinet of Ministers of the Republic of Uzbekistan a draft regulation on the procedure for concluding public-private partnership agreements in the field of operation of water supply and sewage facilities, while providing for the formation of tariffs for water supply and sewage services not lower than the level defined by the relevant public-private partnership agreements;

develop and approve regulations and a selection mechanism for private operator companies (private partners) for servicing water supply and sewage systems, including in rural areas, model draft contracts and agreements, technical and financial indicators specified in public-private partnership agreements, and also parameters of efficiency of their activity;

e) in cooperation with the State Committee on Land Resources, Geodesy, Cartography and State Cadastre, the State Committee for Investments, the Ministry of Finance, the Ministry for the Development of Information Technologies and Communications of the Republic of Uzbekistan, in three month period to develop a "roadmap" for the implementation of a single geographic information system ensuring the input , storage, periodic updating and monitoring of all necessary information on water supply and sewerage facilities.

20. To impose personal responsibility on:

First Deputy Prime Minister of the Republic of Uzbekistan A.Ramatov - for the implementation of strict control over the provision of timely and full implementation of the measures provided by this resolution;

Deputy Prime Minister of the Republic of Uzbekistan S. Kholmuradov - for ensuring the timely development of attracted funds from international financial institutions and foreign government financial organizations, as well as searching for potential investors and attracting foreign direct investment in the drinking water supply and sanitation sector;

Deputy Prime Minister of the Republic of Uzbekistan J. Kuchkarov - for ensuring timely financing of the projects stipulated by this resolution, as well as the qualitative development of mechanisms for the implementation of projects in the field of drinking water supply and sanitation on the terms of a public-private partnership;

Minister of Housing and Communal Services of the Republic of Uzbekistan M. Saliev - for ensuring timely development, coordination and approval of project documentation, construction and commissioning of facilities provided for by this resolution.

21. The Ministry of Housing and Communal Services, jointly with other related departments, within two month period to submit to the Cabinet of Ministers of the Republic of Uzbekistan proposals for changes and amendments to the legislation arising from this resolution.

22. The control over the realization of the current resolution is entrusted to the Prime Minister of the Republic of Uzbekistan A.Aripov, the head of the Presidential Administration of the Republic of Uzbekistan Z.Nizomiddinov and deputy advisers to the President of the Republic of Uzbekistan B.Mavlonov and G.Saidovа.

SH.MIRZIYOEV, President of the Republic of Uzbekistan    Tashkent city, November 30, 2018.