Sofia Water Utility to Cut Supplies to Debtors

Twenty years after the collapse of the communist regime Bulgaria's water sector remains one of the least reformed systems in the country.
Sofiyska Voda, the company operating water supply and treatment services for the Bulgarian capital Sofia and serves 1.3 million inhabitants, has threatened to suspend supplies to its debtors.

Outstanding payments currently amount to BGN 59 M, the concessioner announced, adding that the sum exceeds the investments of BGN 52 M it made in an upgrade of no more than 1% of the sewage system last year.

The deal for the sale of several European water supply and treatment businesses from United Utilities, including Bulgaria's Sofiyska Voda, to France's Veolia Environnement, was finalized at the beginning of November.

Veolia, the world's biggest listed water company, unveiled the deal, with an enterprise value of about EUR 199 M in June. United Utilities sale of non-regulated businesses included subsidiary United Utilities Australia and investments in the UK, the Philippines, Bulgaria and Poland.

The French utility will take a 77.1% stake in Sofiyska Voda, the company operating water supply and treatment services for the city of Sofia in Bulgaria. The acquired stake includes the share of the European Bank for Reconstruction and Development.

The company plans to invest BGN 240 M by 2013, BGN 50 M of which come from a loan from the European Bank for Reconstruction and Development.

More than twenty years after the fall of the communist regime, Bulgaria's water sector remains one of the least reformed systems in the country.

Except for Sofia municipal water supply, which has been granted on concession to a foreign investor, all other units in the sector are either owned by the state or the municipalities.

The company in Sofia however has been harshly criticized for shortage of investments in the upgrade and maintenance of the system.

An average 60% of water pumped in the pipes never reaches Sofia consumers, while in some regions losses account for up to 90 %.

Water Utility Sofiyska Voda Exposed for Overcharging

Water utility Sofiyska Voda has been overcharging bank offices by BGN 0.20 per cubic meter, the water treatment tariff for industrial enterprises, said Milena Milanova, member of the State Commission for Energy and Water Regulation (DKEVR) on Tuesday.

In her words, the violations were revealed during a random check and the utility company was issued a statement of offence worth BGN 200 000.

The DKEVR member cautioned that the inspection would continue and the utility could face further penalties.

She specified that Sofiyska Voda had been imposed the minimum penalty, while the maximum fine amounted to BGN 500 000.

Milanova advised consumers to take a closer look at the water treatment fees on their bills and to report irregularities and claim their money back.

While DKEVR can impose penalties, it cannot pay compensations to overcharged customers, representatives of the watchdog said.

According to DKEVR Chair Angel Semerdzhiev, violations were also detected in the company's accounting and investment reports.

The DKEVR Chair suggested that the utility would find it hard to justify its demand for a 10% increase in the cost of its services in 2012.