Nov. 26, 2007
On July 10 the European Bank for Reconstruction and Development (EBRD) struck a loan agreement worth EUR 25 million with the Tbilisi Water Supply Improvement Project, but Georgian NGOs allege that the introduction of a public-private partnership (PPP) involving the Tbilisi water utility will lead to price rises that will have harmful effects on the Georgian capital's 1.5 million residents.
Concerned groups are demanding that the EBRD carry out a social assessment to identify mitigation measures to aid low-income households most adversely affected by price hikes, and are pressuring the government to guarantee enforcement of such measures. The groups also expect the EBRD to provide access to project documentation — including complete details of the project feasibility study — and to organise public hearings on how best to provide Tbilisi's citizens with safe drinking water and sanitation services.
The CEE Bankwatch Network wrote that there are also concerns about project efforts to introduce collective water block metering that would involve payment of fees per block based on the number of family members.
"Roughly 50 percent of Georgia's population lives below the poverty line," said Dato Chipashvili from Bankwatch. "And if, as we fear, water tariffs increase as a result of the project, then a proportion of the population might be without drinking water and sanitation due to disconnections."
Contacted by Green Horizon, Biljana Radonjic Ker-Lindsay of the EBRD Communications Department replied that the bank had responded to NGO concerns by writing a letter to Green Alternative on July 12 and by participating in several follow-up meetings in Tbilisi.
"Since project preparation, the EBRD has paid careful attention to addressing residential block metering and its potential social impact," the bank stated. "Metering the consumption of water is a preferred solution as the bills are directly linked to actual consumption [...], and is more transparent than the current practice. "In regard to social impact, the project ensures that associated tariff increases are well within international guidelines with respect to affordability which state that the average water bill should not exceed 4 percent of the average household income," the statement continued. "It also makes sure that the company has no existing or planned policy to limit or cut water supply to customers in individual flats who do not pay their bills. [...] Lastly, the support for the poorest segments of the population is foreseen through the existing procedures administered by the [Georgian] Ministry of Finance, based on information provided by the Ministry of Health. The Ministry of Health is responsible for registering persons below the poverty line and these are eligible for reduced public utility billing in accordance with national law."
