RETA 7918 Ulaanbaatar - Mongolia Water and … · June 2013 . RETA 7918 Final report Page 2 RETA...
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RETA 7918 Ulaanbaatar - Mongolia
Water and Wastewater
Operation Improvement Project
Final Report
June 2013
RETA 7918 Final report Page 2
RETA 7918
Ulaanbaatar Water
and Wastewater
Operation
Improvement
Project
Final Report
Version 1.0 Status Final
Sponsor Asian Development Bank Project
manager
G. Soppe
Date June 10, 2013
Authors
G. Soppe, S.T. Jarigsma, C. Rix, L.P. Mecksenaar,
F. Hollebekkers, D. Apon, B. Hulstein, A.Tsetsgee,
D.Odsuren, E. Oidov, T. Dalai, O. Norovjav,
Review A. Doppenberg
RETA 7918 Final report Page 3
ABBREVIATIONS
ADB –Asian Development Bank
BOD - Biochemical Oxygen Demand
CI - Cast Iron
COD - Chemical Oxygen Demand
CTP - Customer Transfer Point
CWWTP – Central Waste Water Treatment Plant (of Ulaanbaatar)
DI - Ductile (Cast) Iron
dia - Diameter (of a pipe)
DMA - District Metering Area
DMF - Design and Monitoring Framework
DMZ - District Metering Zone (larger than DMA)
DO - Dissolved Oxygen
FDPC - Flow Dependent Pressure Control
GoM - Government of Mongolia
GPRS - General Packet Radio Services
HDPE - High Density Poly Ethylene (plastic pipe material)
ICB - International Competitive Bidding
JICA – Japan International Cooperation Agency
l/c/d - Liter per Capita per Day
mio - million
MLSS - Mixed Liquid Suspended Solids (measure of bio-mass in aeration tanks)
MoF – Ministry of Finance
MRTCUD – Ministry of Roads, Transportation, Construction and Urban Development
MSL - Mean Sea Level
MUB – Municipality of Ulaanbaatar City
mwc - meters water column (a measure for hydraulic head and pressure)
NCB - National Competitive Bidding
NRW - Non-Revenue Water
OCC - Operational Control Centre
OSNAAG – Housing and Public Utilities Authority of Ulaanbaatar City
PPP - Public-Private Partnership
PPTA – Project Preparatory Technical Assistance
PS - Pumping Station
Q - Quarter
RETA – Regional Technical Assistance
SC - Steering Committee
SCADA – Supervisory Control and Data Acquisition
SVI - Sludge Volume Index
₮ - Tugrik, or Tögrög, or MNT, Mongolian currency (1 USD ~ ₮1380)
UB - Ulaanbaatar
UEIF - Urban Environment Infrastructure Fund
UFPF - Urban Financing Partnership Facility
USUG – Ulaanbaatar Water Supply and Sewerage Authority
VEI – Vitens Evides International
WSP - Water Safety Plan
WOP - Water Operators Partnership
YTD - Year To Date
RETA 7918 Final report Page 4
Table of contents
SUMMARY ........................................................................................................... 7
I. INTRODUCTION ........................................................................................ 20
A. BACKGROUND ................................................................................................ 20
B. THE PROJECT ................................................................................................. 21
C. RETA 7918.................................................................................................. 21
D. THIS REPORT ................................................................................................. 22
II. SCOPE OF THE TECHNICAL ASSISTANCE RETA ......................................... 23
A. PROJECT OBJECTIVES ....................................................................................... 23
B. TASKS AND DELIVERABLES OF THE TECHNICAL ASSISTANCE RETA .................................. 23
C. RELATION WITH THE INVESTMENT PROGRAM PPTA 7970-MON ..................................... 24
D. RELATION TO OTHER PROGRAMS ........................................................................... 24
III. SHORT DESCRIPTION OF ULAANBAATAR .................................................. 26
A. GENERAL ...................................................................................................... 26
E. SOCIAL AND NATURAL ENVIRONMENT .................................................................... 27
i. Social conditions ..................................................................................... 27
ii. Natural Environment ................................................................................ 27
IV. WATER SUPPLY – DESCRIPTION OF THE SYSTEM ..................................... 29
A. CURRENT MASTER PLAN ..................................................................................... 29
F. DESCRIPTION OF USUG’S WATER SUPPLY SYSTEM ...................................................... 29
G. WATER SAFETY PLAN ........................................................................................ 32
V. WATER SUPPLY – ENERGY SAVING........................................................... 34
A. ENERGY SAVING AT THE UPPER PUMPING STATION ..................................................... 35
B. ENERGY SAVING AT THE CENTRAL PS ..................................................................... 39
C. ENERGY SAVING AT PS INDUSTRIAL ...................................................................... 44
i. Introduction ............................................................................................ 44
ii. Energy saving through reduced pressure .................................................... 46
D. REDUCTION PUMP-PRESSURE AT MEAT PUMPING STATION ............................................. 47
i. Introduction ............................................................................................ 47
ii. Current pressures in the Meat distribution system ....................................... 48
iii. Proposed pressure reduction ..................................................................... 49
E. SUM OF ENERGY SAVING AT THE 4 MAIN DISTRIBUTION PS ............................................ 51
F. THE COMBINATION CENTRAL-UPPER CAN SAVE MORE ENERGY ......................................... 51
G. ENERGY SAVINGS AT THE DISTRIBUTION BOOSTER PUMPS IN UB ..................................... 53
H. ENERGY SAVINGS AT THE DEEP WELL PUMPS IN UB ..................................................... 53
I. IMPLEMENTATION OF ENERGY SAVINGS PROPOSALS ..................................................... 53
VI. WATER SUPPLY - OPERATIONAL IMPROVEMENTS .................................... 55
A. INTRODUCTION ............................................................................................... 55
B. ACTIVITY 1: EQUIPMENT FOR OPERATIONAL CONTROL ................................................. 56
C. ACTIVITY 2: OPERATIONAL CONTROL CENTRE .......................................................... 59
VII. WASTEWATER TREATMENT OPERATIONAL IMPROVEMENTS..................... 61
A. INTRODUCTION ............................................................................................... 61
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B. SEWERAGE .................................................................................................... 61
i. Short description of the sewerage ............................................................. 61
ii. Flows through the sewerage and pollution loads .......................................... 62
C. WASTEWATER TREATMENT FACILITIES IN ULAANBAATAR ............................................... 67
D. THE CENTRAL WASTEWATER TREATMENT PLANT (CWWTP) .......................................... 67
i. Introduction ............................................................................................ 67
ii. Performance of the CWWTP ...................................................................... 69
E. CWWTP –REVIEW OF OPERATIONS ...................................................................... 73
i. General .................................................................................................. 73
ii. Influent pumping stations ......................................................................... 74
iii. Mechanical pre-treatment: Screens & Primary Sedimentation ....................... 75
iv. The aeration tanks................................................................................... 75
v. Secondary clarifiers ................................................................................. 79
vi. Sludge return pumps ............................................................................... 79
vii. In-line BOD, COD & SS-measurements ...................................................... 79
viii. Output of the proposed improvements ....................................................... 80
ix. Sludge digestion and methane production .................................................. 80
x. Bio-ponds ............................................................................................... 80
xi. Overview of proposed improvements for the CWWTP ................................... 81
xii. The future of the CWWTP – Possibilities for investments ............................... 81
VIII. INDUSTRIAL WASTEWATER ..................................................................... 83
A. INTRODUCTION ............................................................................................... 83
B. INDUSTRIAL WATER CONSUMPTION ........................................................................ 83
C. INDUSTRIAL WASTEWATER PRODUCTION.................................................................. 84
D. POSSIBLE ACTIONS TO REDUCE INDUSTRIAL WASTEWATER ............................................ 86
E. INDUSTRIAL WASTEWATER CHARGES ...................................................................... 87
i. Current wastewater charges ..................................................................... 87
ii. Thoughts on a future system of wastewater charges .................................... 88
iii. Flow metering equipment for the (bi-) annual pollution surveys .................... 90
IX. REDUCTION OF NRW AND WATER CONSUMPTION ................................... 92
A. CURRENT SITUATION ........................................................................................ 92
i. Introduction ............................................................................................ 92
ii. NRW in USUG’s main network ................................................................... 93
iii. OSNAAG’s distribution systems and their NRW ............................................ 94
B. COMPONENTS OF USUG’S NRW .......................................................................... 95
i. NRW caused by metering inaccuracies ....................................................... 95
ii. Illegal connections ................................................................................... 96
iii. Real losses ............................................................................................. 96
C. NRW AT OSNAAG’S AND KANTORS’ DISTRIBUTION SYSTEMS ........................................ 98
D. PAST NRW-REDUCTION EFFORTS IN UB ................................................................. 98
E. OBJECTIVES FOR AN INTERVENTION PROGRAMME - GENERAL .......................................... 99
F. PROPOSALS TO REDUCE USUG’S NRW ................................................................ 101
i. Apparent losses ..................................................................................... 101
ii. Real losses ........................................................................................... 102
G. PROPOSED NRW-REDUCTION PILOT IN AN OSNAAG COMPOUND .................................. 104
H. WATER CONSUMPTION REDUCTION ...................................................................... 106
I. PUBLIC AWARENESS ....................................................................................... 108
J. INSTITUTIONAL ASPECTS.................................................................................. 114
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X. CAPACITY DEVELOPMENT/INSTITUTIONAL STRENGTHENING ............... 115
A. INTRODUCTION ............................................................................................. 115
B. INDIVIDUAL CAPACITY DEVELOPMENT .................................................................. 117
H. ORGANIZATIONAL CAPACITY DEVELOPMENT ........................................................... 117
I. INSTITUTIONAL CAPACITY DEVELOPMENT .............................................................. 119
J. SUMMARY AND BUDGET IMPLICATIONS .................................................................. 122
XI. PROPOSED INTERVENTIONS AND THEIR ESTIMATED COSTS ................. 124
XII. PACKAGING ............................................................................................ 125
XIII. FINANCIAL AND ECONOMIC ANALYSIS .................................................. 127
A. INTRODUCTION ............................................................................................. 127
B. FINANCIAL STATE OF USUG ............................................................................. 127
i. Financial Indicators ................................................................................ 127
ii. Operational Indicators ............................................................................ 132
iii. Balanced Score Card .............................................................................. 133
C. THE PROPOSED PROJECT .................................................................................. 134
D. RECOMMENDATIONS FOR FINANCIAL REFORMS ......................................................... 136
XIV. LONG-TERM INVESTMENTS..................................................................... 138
A. BACKGROUND .............................................................................................. 138
B. PRIORITY INVESTMENTS .................................................................................. 138
C. INVESTMENTS IN IMPROVED OPERATIONS (NEAR FUTURE) ........................................... 139
XV. DESIGN AND MONITORING FRAMEWORK ............................................... 140
A. BENEFITS ................................................................................................... 140
B. DESIGN AND MONITORING FRAMEWORK ................................................................ 141
APPENDIX 1 PROPOSED IMPROVEMENTS – WATER SUPPLY.......................... 142
A. PUMPING STATIONS ....................................................................................... 142
B. DISTRIBUTION NETWORK OF ULAANBAATAR ........................................................... 144
C. OPERATIONAL CONTROL CENTRE (OCC) AT USUG’S MAIN OFFICE ................................ 145
APPENDIX 2 PROPOSED IMPROVEMENTS - WASTEWATER ............................ 146
A. PROPOSED IMPROVEMENTS AT THE CWWTP .......................................................... 146
B. FOR MEASUREMENT OF INDUSTRIAL WASTEWATER FLOWS ............................................ 146
APPENDIX 3 LARGEST INDUSTRIAL WATER USERS ...................................... 147
APPENDIX 4 DESIGN AND MONITORING FRAMEWORK .................................. 153
APPENDIX 5 IRR TABLES ................................................................................ 155
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Summary
i. Background
1. The Municipality of Ulaanbaatar (MUB) supported by the Asian Development Bank
(ADB) is currently preparing an ambitious investment program for urban services and
development of the Ger areas (PPTA 7970-MON). In parallel, a Regional Technical
Assistance (RETA) funding was provided for a contract with Vitens Evides International
(VEI), Royal HaskoningDHV and individual national consultants to identify a “Water and
Wastewater Operation Improvement Project”. Implementation of the project will be
carried out through a grant from the Urban Environment Infrastructure Fund to the
amount of USD 3.7 million.
2. The project will deliver through three components. The components were
validated during an inception workshop on August 6th, 2012. This report shows the three
components as follows:
(i) Component 1: Energy saving and operational control improvement in chapters:
IV Water supply – Description of the system
V Water supply – Energy Saving
VI Water Supply - Operational improvements
VII Wastewater Treatment Operational improvement
(ii) Component 2: Non-revenue water and consumption reduction in chapter IX; and
(iii) Component 3: Capacity development and institutional strengthening: chapter X.
3. RETA 7918 started on July 16, 2012. It has operated in close coordination with
the PPTA consultants. It is the intention that this Final Report will be incorporated in the
outputs of the PPTA Consultants. The final report was completed April 30th 2013.
ii. Water supply – Energy saving
4. UB depends entirely on groundwater that is mainly pumped from the four well
fields Central, Upper, Industrial and Meat. Current abstractions, at less than 6,300 m3/h,
are well below the capacity of ~10,000 m3/h of these four well fields. From the wells,
water is pumped into reservoirs, chlorinated and then pumped into the distribution
system. An exception is the Upper Source, located 40 km upstream of Ulaanbaatar,
where the water from the source is first pumped towards X-reservoir, from where it is
supplied towards the city by gravity.
5. Energy consumption per m3 of water distributed varies considerable from one
location to another. It is higher at the Upper and Central distribution pumps as a result
of throttled valves at the pumps. Energy saving can be achieved by making changes to
the pumps at these two locations. At the Industrial and Meat pumping stations, some
energy can be saved by reducing the outgoing pressure set points at the distribution
pumps. This can be done at any time against no investment. Energy saving for the four
PS is estimated at USD 290,000 per year, as summarized in the table below.
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Table S1 Energy saving in distribution pumping at the four main PS
Station Current Possible Save
kWh/day ₮ mio/yr USD/yr kWh/day ₮ mio/yr USD/yr %
Upper PS 24,300 780.5 565,598
20,868 670.3 485,711 14.1%
Central 19,462 625.1 452,980
11,449 367.7 266,477 41.2%
Industrial 4,594 147.6 106,937
4,118 132.3 95,844 10.4%
Meat PS 2,270 72.9 52,832
1,607 51.6 37,398 29.2%
Total 50,626 1,626.1 1,178,348 38,042 1,221.9 885,430 24.9%
Possible saving 12,585 404.2 292,918 24.9%
6. A higher saving can be achieved by reducing output from the high energy Upper
Source (with limited scope for energy saving) and increasing supply from Central, where
large energy saving is possible. This will require some adjustments to the distribution
operations, but will increase the annual energy saving by an additional USD 80,000 to
USD 370,000 per year (see the table below).
Table S2 Energy saving with supply zone adjustments for Central & Upper
Station Current Possible Saving
kWh/day ₮ mio/yr USD/yr kWh/day ₮ mio/yr USD/yr %
Central 43,762 1,406 1,018,578
28,863 927.1 671,791 34.0%
Upper Industrial 4,594 147.6 106,937
4,118 132.3 95,844 10.4%
Meat PS 2,270 72.9 52,832
1,607 51.6 37,398 29.2%
Total 50,626 1,626.1 1,178,348 34,587 1,110.9 805,033 31.7%
Possible saving 16,039 515.2 373,315 31.7%
USUG agrees with the proposed changes at Meat and Industrial station and has also
agreed with the installation of a new impeller in one of the pumps at Upper. However,
USUG would not agree with the installation of new pumps at Central and has instead
opted for the more expensive option of providing the 3 large pumps with frequency
converters, using money from a loan or from its annual budget. USUG will apply for a
loan or will allocate funds for frequency converters at Central as soon as its budget
allows. Thus, energy saving shown in Table S1 can be achieved. However, the option
outlined in Table S2 was not palatable to USUG.
iii. Water supply – Operational improvements
7. Operational improvement of the water supply systems in UB involves installation
of Equipment for Operational Control and enhancements at the OCC (Operational Control
Centre). Priority was given to the most important assets, in terms of functionality.
Table S3 Proposed improvements per location
Location Proposed Improvements
Upper PS Two way communication with OCC;
Industrial PS Operational control system and telemetry, frequency controlled pumps,
16 submersible pumps, communication means, measurement
equipment (flow, pressure, reservoir level), automated chlorine dosing,
connection with OCC;
RETA 7918 Final report Page 9
Location Proposed Improvements
Meat PS Telemetry and communication means between pumping station and
OCC, communication between extraction wells and pumping station,
connection with OCC;
Bayangol PS Connection with OCC;
Nisekh PS PLC, SCADA and telemetry system, measurement/monitoring devices
Tolgoit booster station PLC and telemetry system to connect to OCC;
Sharkhad reservoir and
booster station
Measurement equipment, PLC and telemetry system to connect to
OCC;
North-east reservoir Connection with OCC;
Chingeltei booster
station
Connection with OCC;
Distribution Network 20 control valves (pressure and flow control), 10 flow/pressure
measuring points, reconstruction of 10 existing measuring points;
At OCC Operational control equipment: telemetry, servers, computers,
software
8. Technical Assistance/Capacity Building was provided to USUG as part of RETA
7918. In 2010, VEI assisted USUG in the establishment of the OCC and provided training
to its staff. In October 2012, VEI organised a workshop with all staff of the OCC and
engineering department employees present. During this workshop presentations were
given and many aspects of the OCC tasks were discussed. Future possibilities for the
network were discussed and from sample scenarios further improvement of the network
and pumping station set points were discussed. During the entire period of this
feasibility study, VEI has provided technical assistance and training to USUG, including
coaching of USUG´s staff at technical and project management level, assisting with
implementation, on-the-job training with PLC-programming, SCADA software, etc., and
providing project support and assistance.
iv. Operations improvements at the CWWTP
9. The CWWTP (central wastewater
treatment plant) is located at the far western
end of the city. The main units are shown in the
simplified schematic of the CWWTP. The CWWTP
does not have a very good reputation and is
generally described as an underperforming and
very smelly plant. Surprisingly, in the period
October-December 2012, it was working quite
well and there was virtually no smell.
10. Earlier during 2012, there had been
serious problems at the CWWTP. In the period
May-July, the incoming COD-load at the CWWTP
doubled from the usual 100-115,000 kg/day for
this period to an average of 200,000 kg/day in
early July, with many days of much higher loads
arriving. The biological treatment section
collapsed and COD-removal ratios took a dive
(from 80-90% to less than 60%). It is not clear how the COD-load could double in such
RETA 7918 Final report Page 10
a short period. The industries are widely blamed but, considering that industries
contribute less than 20% to overall COD-loads, there may be another reason. The plant
management decided to allow only part of pre-settled water to continue to the biological
section and diverted the remainder to the effluent channel. The biological section
(aeration and clarifiers) improved again and COD-removal efficiencies recovered. BOD-
removal efficiency in the plant even reached a respectable average of 94%, in August
and September 2012.
11. The CWWTP is already old and close to being obsolete. An entirely new
wastewater treatment plant could well be constructed within the next ten years. Any
improvements proposed for the current plant should not cost too much money,
therefore. This warrants the replacement of mechanical and electrical/electronic
equipment, usually with a lifetime of 10-15 years, but not any serious investments in
civil works.
12. The main obstacle to a sturdy treatment process at the CWWTP is the insufficient
hydraulic capacity of the 5 secondary clarifiers. When incoming flows increase, water
velocities in the clarifiers are becoming (too) high and bio-mass, instead of settling to
the bottom of the clarifiers (for return to the aeration tanks), disappears together with
the effluent. Adding 2 or 3 clarifiers would hugely improve the sedimentation process.
USUG has made available a budget for a construction of 2 additional clarifiers in 2013.
13. Also the biological processes in the aeration tanks are not optimal and sludge
easily bulks1, making it difficult to settle it in the secondary clarifiers. Many of the
improvements proposed below address this problem.
14. Improvement measures proposed are:
i. Improvement of existing SCADA system, including new PCs. The SCADA
system will be designed as a local system (no connection to OCC);
ii. Construction of selectors in each of the aeration tanks;
iii. Procurement of 10,000 new air diffusers for the aeration tanks2;
iv. Procurement of new Dissolved Oxygen sensors in the aeration tanks;
v. Supply and installation of ultrasonic sludge level sensors in the sedimentation
tanks.
15. Existing bio-ponds once helped in polishing effluent. They are less suitable as
facultative lagoons to treat raw or pre-settled sewage.
v. Industrial wastewater
16. Judging from available data, industrial wastewater plays a less prominent role
than generally believed. Industries used only 6% of USUG’s water in 2011 and it is
estimated that, of the COD-loads arriving at the CWWTP only just over 17% has an
industrial origin. It is possible that there are large industrial polluters that have escaped
USUG’s attention. A JICA study team believes that industrial pollution plays a larger role
than can be based on the available data.
17. Many industries produce only small amounts of domestic-type wastewater.
Exceptions are breweries, distilleries and manufacturers of soft drinks, which use
extraordinarily large amounts of water. Tanneries and intestine cleaning companies
produce highly concentrated wastewater. As the treatment process at the CWWTP is
1 Bulking: the sludge becomes lighter, less dense, and no longer settles well. 2 Changing to 6,000 larger diffusers, instead of 10,000 diffusers of the current type is being investigated.
RETA 7918 Final report Page 11
sensitive to high COD loads, it is worthwhile clamping down on the relatively few
severely polluting industries.
18. Tanneries discharge more wastewater during the period mid-November to mid-
March than in the other months. Almost all discharge their wastewater to the Khargia
pre-treatment plant. This plant is not working well, but seems to improve. Cooperation
with Khargia is recommended, first of all to ensure that Khargia’s plant is operated
properly and discharges an acceptable effluent, but also to convince the company that
batch-wise discharges should take place during the night, when wastewater flows by
others are low and which would spread the arriving COD-loads at the CWWTP more
evenly.
19. Current wastewater charges are based on the water supplied, not on the amount
of wastewater discharged. The charges are a good start, but it could be argued that they
are far too low for some types of industry, like distilleries, breweries, tanneries and
intestine cleaning. The present system of fees does not provide an incentive to reduce
pollution. The most important argument to change the fee system would not be to
collect more money, but to reduce overall industrial pollution loads, for the protection of
the treatment processes at the CWWTP.
20. With the new polluter pays law, adopted in 2011, fees should gradually switch
from being water consumption based to pollution based. For small industries, fees could
be based on standard pollution factors, as is the case in many countries. The larger
polluters, say the top-50 (but not the tanneries that discharge to Khargia), should be
monitored and their wastewater fees based on actual pollution. For this purpose,
wastewater flow measuring equipment is included in the project. Tanneries should no
longer be charged a fee. All fees (which should be much higher than the ones applied at
present) should be made payable by the Khargia Company. The fees should be based on
size (and timing) of pollution discharged by Khargia and should include a fee component
for Chromium. Khargia should distribute this fee proportionally over its tannery
customers.
vi. NRW-reduction
21. With only 4,147 customers and all of them metered, USUG’s NRW was low, at
22% in 2011, and 19.2% in 2012, equal to around 10 Mm3/year. In monetary terms
this NRW represents a value of approximately ₮582 million per year (~USD
416,000/year), a relatively low value representing only lowered energy costs as most of
USUG’s other costs would remain unchanged. NRW of the distribution pipes within
OSNAAG’s housing estates could not be determined accurately as a large number of
customers are still unmetered (52,3 % in August 2012). However OSNAAG charges a
fixed rate (equivalent to a consumption of 285 l/c/d), which is higher than the actual
consumption. Thus, theoretically, NRW for OSNAAG is actually negative.
22. With a low monetary value and with many NRW-reduction activities in UB being
costly, return on such activities is relatively low. For this reason, focus in UB should be
on cheap and easy measures that yield quick results. Such measures would be
increasing checks and balances in the area of apparent losses and reducing pressures in
the network. This last measure will not only reduce NRW, but also energy costs per m3
of water pumped. More costly NRW-reduction efforts should be made only after having
precisely pinpointed the source and location of such NRW.
23. A USD 564,000 NRW-reduction programme is outlined in this report. It is
expected to have an internal rate of return of almost 9%, lower than usual for NRW-
RETA 7918 Final report Page 12
reduction projects, but acceptable. The programme will include separation of the
network into District Metering Zones and some smaller District Metering Areas. It will
also include an NRW-reduction pilot at one of OSNAAG’s housing estates with high
suspected NRW.
24. Metering of apartment buildings is an important measure to create “water
awareness” amongst customers. After starting to meter household consumption, with
now almost 50% of customers metered, water use has come down to an average202
l/c/d. At fully metered apartment buildings consumption has become less than 130 l/c/d.
How to meter the remaining 41,000 households was the subject of a stakeholder
meeting in October 2012 agreed that OSNAAG should install meters in all of its
apartments, which it is required to do by law, and that customers should pay a fixed
meter fee on top of the costs for water consumption.
vii. Capacity Building/Institutional strengthening
25. Technical assistance and capacity building that builds further on the foundations
laid by the WOP will enable USUG to absorb and anchor the envisaged institutional
changes and to further increase its (financial) autonomy, resulting in improved service
delivery and operational performance. An Institutional Strengthening Program is
recommended that can cater to the organizational and institutional changes and can
supply sufficient technical knowhow. The following aspects need to be taken into
consideration:
- Provide input and assist MUB, USUG and other stakeholders in the sector to
develop suitable options for institutional reform, and to decide the most preferred
and adequate option (e.g. by revision of laws and contracts, PPP models etc.);
- Organizational development with an emphasis on midterm enterprise planning
processes to establish improved financial planning and tariff development
- Training of higher and middle management in regards to utility management and
HR management based on performance indicators and output. For this a 2 year
Management Development program should be designed and executed.
26. In order to transform USUG into a performance oriented and financial healthy
water utility it needs a concerted action of all key players. This will create a perspective
for USUG to develop itself into a more(financial) autonomous utility thereby reducing
their demand for financial government support, while improving their high quality water
services to the public and the economy at large. Training on performance management
is therefore preferably to take place in mixed composition of WSRC, MCUD and USUG
staff. To cater for instrumental human capacity a budget of € 196,000 would suffice.
27. For the long run a more structural remediation program is needed for the
departments already referred to in the ADB Report TA 7591.
viii. Proposed interventions, costs & packaging
28. Costs of all of the above proposals are estimated at approximately USD
4.7 million, higher than the available grant of USD 3.7 million. To facilitate selecting the
most productive interventions, they are listed below, ranked in order of decreasing
priority. All prices were adjusted to a 2014 level, the expected year of implementation.
RETA 7918 Final report Page 13
Table S4 Cost estimate in US Dollars of items proposed
Intervention items 2012 2014
Base costs Rounded
1 Industrial Pumping station 686,300 800,000
2 Measuring in distribution 170,000 196,000
3 CWWTP 750,510 858,000
4 Meat Pumping station 188,500 223,000
5 Four Booster stations 52,000 63,000
6 Sharkhad Booster station 59,550 70,000
7 Tolgoit Booster station 35,500 42,000
8 OCC and communications 235,500 279,000
9 Nisekh Pumping station 134,350 156,000
10 Upper source Pumping station 50,000 56,000
11 Capacity Building 196,000 216,000
12 Sewer flow meters 130,000 136,000
13 Add distrib. measuring 520,000 604,000
14 NRW-related items 609,000 714,000
15 Central Pumping station 1,104,369 1,238,000
16 Spare parts 100,000 105,000
Total USD 5,021,579 5,756,000
29. Considering the character and locations of the components, four bid packages are
proposed, with a total value below USD 3.7 million. Bid documents have been elaborated
for each of these packages. In addition, a capacity building component is included in the
grant financing. Details of the packages and their costs are shown in the table below.
Regarding the character of the works, it was deemed best if Package B would be an ICB-
contract, while all others should best be NCB. However, with Package A (SCADA)
exceeding the USD 1 million limit, it will probably have to become ICB. The other
packages are below the limit and could be executed as NCB contracts.
Table S5 Cost estimate of packages proposed
Type Package USD (rounded)
Cost level 2014
GRANT Package A: SCADA 1,169,000
Package B: Mechanical and electrical works 717,000
Package C: Distribution improvement and NRW 604,000
Package D: CWWTP 858,000
Capacity building 216,000
Sub-total 3,564,000
Contingencies 136,000
Grant total 3,700,000
LOAN Package B: Mechanical and electrical works Central 1,238,000
Package C: Distribution improvement and NRW 714,000
Package E: Equipment 240,000
Sub-total 2,192,000
Contingencies 219,000
Loan total 2,411,000
Overall total 6,111,000
RETA 7918 Final report Page 14
ix. Possible future investments for USUG using ADB-loans
Table S6 Envisaged future investments in water and wastewater
Description Details ~2020 ~2025 ~2030 Water Source
Development Surface dam development 188 188
Underground dam development
24 25
Water supply Rehab distribution 35
Strengthen w/s facilities 75 49 30
Wastewater CWWTP 145 57 384
Nisekh WWTP 49 10 42
Industrial area/transfer to Emeelt 39
Reuse of effluent / sludge
58
TA Capacity building CWWTP 4
Sewer rehab 12 12 55
Sewer improvement 27 4
Sewer extensions 28 28 76
TA Industrial wastewater 4
Ger improvement Pipe connection to kiosks 2 10 16
Discharge pipes from sub-centers 11 8 9
Water supply & sewerage dev. 190 190 190
Totals Water Supply 110 261 243
Wastewater 308 111 615
Ger areas 203 208 215
621 580 1,073
Grand Total 2,273
30. The total investments required are well over USD 2 billion over a period of about
20 years, of which almost half is earmarked for wastewater collection and treatment.
The largest single investment identified is for the Central Wastewater Treatment Plant
CWWTP, with a capital requirement of almost USD 600 million. Much of the capital
investment earmarked for the CWWTP is for a large-scale renewal around the year
2030-240. It is felt that the current CWWTP is rather old and should be replaced with a
new treatment plant in the coming 5-10 years, requiring large funding much earlier.
31. Some smaller investments, mainly for operational improvements, are
summarized in the table below. They are all related to USUG’s water supply operations.
Table 1 Possible investments in operational improvements (next 10 years)
Location Description USDm
Industrial PS Renewal electrical installations 1.0
Upper Frequency converters 1.3
Booster stations Pumps and frequency converters 1.5
Distribution system Measuring equipment 2.0
Pressure and flow control 1.0
Smart metering at large customers 1.5
RETA 7918 Final report Page 15
Location Description USDm
Asset management and spare parts 0.5
Operation Control Centre Real time control software 0.3
Pressure control/reservoir operation 0.5
Expansion of SCADA 0.5
Total operational improvement next 10 years 10.1
x. Finance
32. The balance sheet shows that USUG is strongly dependent on long term loans for
its operations and that its operations are now less sustainable than several years ago.
This trend is troublesome for future development of USUG as a sustainable organization
which should be fit for the future.
Table S6 USUG’s Balance Sheet 2010-12 (thousands of USD)
31-Dec-10 31-Dec-11 30-Sep-12
ASSETS Current Assets Cash 5,547 7,355 7,998
Accounts debts (Net sums) 2,739 3,045 3,252
Inventory 2,100 3,040 3,084
Prepaid costs 188 142 280
Total Current Assets 10,574 13,581 14,614
Noncurrent Assets Assets (Net) 34,339 48,190 55,172
Intangible Assets (Net) 50 55 245
Construction in process 2,191 210 348
Total Noncurrent Assets 36,579 48,455 55,765
TOTAL ASSETS 47,153 62,036 70,379
LIABILITIES Short term liabilities Accounts payable 103 129 1,926
Tax payable 1 87 3
Other payable 150 194 98
Prepaid income 118 116 106
Total Short term liabilities 372 526 2,133
Long term debts
Long term loan 27,641 45,130 52,052
Other long term loan 8,280 10,436 10,436
Total long term loan 35,922 55,566 62,488
Total Liabilities 36,294 56,091 64,622
Equity
State Equity 634 634 634
Revaluation funds 21,106 21,080 21,080
Other Equity 11,536 11,820 14,703
Accumulated revenue (loss) -22,416 -27,589 -30,660
Total Equity 10,859 5,945 5,758
TOTAL LIABILITIES 47,153 62,036 70,379
RETA 7918 Final report Page 16
33. It is USUG’s intention to turn long term debt into equity. Three loans are
currently registered as long term liability on the Balance sheet of USUG (USIP I, Spanish
Loan and USIP II). Until now USUG has neither paid interest nor amortization on these
loans pending a decision by the UB Municipality on a World Bank suggestion to turn the
loans and accumulated interest into equity.
34. However, USUG should also invest time and effort in sound financial management
in order to ensure that sub sequential losses will become a thing of the past and that
total cost recovery can be achieved. The charts below shows that sales are, in fact,
increasing every year. While this is a good sign, more needs to be achieved.
Figure S1 USUG’s sales (equivalent in million USD/year)
35. Despite the increase in tariffs and sales, earnings have been poor in the past
years, except for the year 2010. It should be noted that the chart below shows earnings
before interest and tax.
Figure S2 USUG’s earnings (before interest and tax)
7.0
9.110.4
11.212.4
13.415.0
17.4
0
2
4
6
8
10
12
14
16
18
20
2004 2005 2006 2007 2008 2009 2010 2011
USDm/yr Sales from Operations (USDm/yr)
-3.75
-7.13
4.55
-4.93
-8
-6
-4
-2
0
2
4
6
2008 2009 2010 2011
USD mio Earning (before Interest & Tax)
RETA 7918 Final report Page 17
36. In order to monitor USUGs progress, VEI made an effort to introduce a balanced
score card in 2010. Although the score card itself has fallen out of favor due to changes
in personnel and is no longer in use, USUG keeps track of many indicators and reports
them diligently to the management on a monthly basis. The table below shows a
number of key performance indicators (kpi) and their values in the past years.
Table S7 Key Performance Indicators monitored by USUG
USUG KEY PERFORMANCE INDICATORS
Unit 2008 2009 2010 2011 Q1-3 2012
Financial Performance Indicators
F1 Net result ( before tax) 000 MNT -5,174,610 -9,835,328 6,278,815 -6,796,773 -5,376,592
F2 Net cash flow 000 MNT -748,457 2,132,968 1,674,084 2,494,326 2,303,960
F3 Operating ratio
1.09 1.02 1.05 1.04 1.27
F4 Av. billed tariff dr. water MNT/m3 243 274 308 346 351
F5 Av. billed tariff w.water MNT/m3 135 157 176 197 200
Commercial Performance Indicators
C1 Collection ratio % 95% 96% 92% 98% 98%
C2 Average debt per client Months 2.4 2.3 2.2 2.0 1.9
C3 Av. consumption dr. water ( I /c/d) 268.2 261.2 236.2 209.5 202
C4 Av. billed tariff dr. water MNT 151 144
143 150 149
C5 Av. billed tariff w.water MNT 311 543 337 842 727
Operational Performance Indicators
O1 NRW water supply % 20.3% 20.4% 19.7% 21.8% 18.7%
O2 NRW wastewater % 21.6% 23.7% 23.8% 24.7% 22.8%
O3 Energy consumption kWh 58.38 67.70 68.01 66.92 68.70
O4 Readiness of equipment % 97.3% 97.8% 98.0% 99.1% 95.5%
O5 Breakdowns per month No. 193 88 157 89 84
Human Resource and Operational Indicators
D1 Drinking water quality
0.5 8.9 0.6 0.2 0.2
D2 Treatm. Eff. CWWTP % 87% 87% 75% 77% 76%
D3 Number of employees # 1348.6 1381.8 1421.4 1456.6 1483.3
D4 Sales per employee 000 MNT 1056.7 1142.5 1214.9 1375.8 1394.9
D5 Petrol consumption Liters 938,395 1,110,993
1,090,061 995,928 962,630
37. The proposed investments as recommended by VEI for the pumping stations
which include PS Upper and Central will have a significant reduction on energy costs for
USUG. It can lower the energy costs for pumping with 25% and, if PS Central would take
over part of a supply area from the inefficient Upper PS, the energy saving could even
reach 32%. USUG has agreed with the energy savings options, but could not appreciate
the last option which would require a significant restructuring of USUG’s operations. And
instead of changing one pump at Central, USUG has opted for the more costly
installation of frequency converters at Central PS. The investment will need to be
financed from a loan or from USUG’s annual budget.
38. Despite the higher investments through a loan, the internal rates of return are
high, regardless of the option selected. Three scenarios were investigated:
1. Only investing in energy saving measures at the Industrial PS and the Meat PS ;
RETA 7918 Final report Page 18
2. Investing in energy saving measures at all four main PS at Central, Upper,
Industrial and Meat;
3. The same scenario as 2, not agreed upon by USUG, with an increased flow from
Central and a reduced flow by Upper PS.
Table S8 Overview of IRR of each scenario
Scenario Option Ch. V Description IRR
1 A+B Industrial & Meat only 8.7%
2 E Upper, Central, Industrial, Meat 16.5%
3 F As 2, but Upper less water, Central more 19.6%
39. The IRR of each scenario is satisfactory, even for scenario 1 with only minimal
energy saving at the main Pumping Stations. For some serious energy saving, as per
scenarios 2 and 3, the IRR is very high, despite the fact that for the adjusted pumping at
Central USUG has opted for the expensive option with frequency controllers, rather than
the cheaper option of changing one pump that was contemplated before and despite the
fact that for this more expensive option a loan will be required. This calculation makes
clear that it is of added value for USUG to invest in Upper and Central regarding
distribution pumping and in an extra NRW program even when the additional investment
is financed by a commercial loan.
40. It is essential that the tariffs within USUG cover all costs. It is to be expected that
the proposed tariff adjustment which is now pending approval of the Municipality Tariff
Committee will be executed during 2013. It remains important to monitor if the tariffs
are high enough to pay not only for the operational costs but also the interest and non-
operational costs. Household income has sharply increased in the past few years and it
is expected that the envisaged increase of the water tariff is affordable for households.
Furthermore, the outstanding repayments and interest of the loans of USUG need either
to be paid, or to be transferred by the MUB into investment funding.
RETA 7918 Final report Page 20
I. Introduction
A. Background
41. The Municipality of Ulaanbaatar (MUB) supported by the Asian Development Bank
(ADB) is currently preparing an ambitious investment program (the investment
program), the Ulaanbaatar Urban Services and Ger Areas Development Investment
Program (PPTA 7970-MON), aiming at integrated and all inclusive improvement of
Ulaanbaatar’s Ger areas3. One of the key elements of this investment program relates to
the extension of municipal services provision, specifically water, wastewater and heating
to so-called ‘sub-centers’4. The MUB has adopted the sub-center approach and is
currently integrating the concept in its Urban Master plan for Ulaanbaatar City5.
42. Parallel to this extension of services into the Ger areas, the MUB, the Ulaanbaatar
Water Supply and Sewerage Authority (USUG) and the Housing and Public Utilities
Authority of Ulaanbaatar City (OSNAAG) have identified the need for modernizing and
upgrading current operations in the city’s core area allowing water and wastewater
operations to be better monitored, controlled, optimized and eventually expanded.
43. Only 40% of the entire population of UB live in the central city core area and has
access to improved water and sanitary services through household connections for water
and sewerage. Drinking water in UB is of fairly good quality. Consumption levels are
high, i.e. 202 l/c/d on average in 2011 but are decreasing because of increased
metering of apartment buildings. As described in chapter V of this report, operations of
the central drinking water distribution scheme in the hilly terrain of UB are rather
complex and inefficient, resulting in pressure fluctuations and high levels of energy
consumption.
44. By contrast, 60 % of UB’s population live in Ger areas and are inadequately
served for water and / or sanitation6. Although water supply in Ger areas has
tremendously improved over the years through construction and connection of water
kiosks, services are still poor, especially in truck supplied areas. Services from truck
supplied kiosks are infrequent and water contamination of tankers occurs and water
supplied from the trucks rarely complies with minimum WHO standards. Kiosk
operations pose a heavy financial burden on USUG, with operational costs of pipe-
connected kiosks three times higher than the revenues and those of truck supplied
kiosks four times higher than the revenues. The average water consumption in Ger
areas is low: 6.5 l/c/d for the truck supplied kiosk and 8.6 l/c/d for connected kiosks.
45. Operational improvements are feasible especially in the fields of energy
efficiency, non-revenue water and water conservation. Improvements in those fields will
allow the MUB, USUG and OSNAAG to conserve resources and reduce operational costs
while increasing the capacities for meeting Ulaanbaatar’s future demand for improved
water and wastewater services.
3Named after ‘ger‘ tents, the term ‘ger-area’ refers to peri-urban settlements around Ulaanbaatar’s formal
area. 4Subcentres are clusters of businesses and public facilities (in ger-areas) that are associated with a transportation hub providing basic living and social services, jobs and economic opportunities. 5Municipality of Ulaanbaatar, Ulaanbaatar City’s Development Tendency Till 2030, International Investment Forum Ulaanbaatar, March 23, 2012. 6 From “Outline for a Mid-term Development Strategy for Water Supply and Sanitation Services in Ulaanbaatar”.
RETA 7918 Final report Page 21
B. The Project
46. Within this context, the Ulaanbaatar Water and Wastewater Operation
Improvement Project (the project) aims to upgrade and modernize the existing assets
that are operated by USUG and to increase its operational and energy efficiency. The
project will finance some key activities that are included in the first tranche of the
above-mentioned investment program PPTA 7970-MON. The project itself is grant
financed by the Urban Environment Infrastructure Fund (UEIF) under the Urban
Financing Partnership Facility (UFPF) that is managed by the ADB; the grant amounts to
USD 3.7 million.
47. As Ulaanbaatar is in rapid transition the need for improved services is high and
the UFPF project can only be the start of a much larger improvement program of the
water and wastewater facilities. Several other projects are in their initial phase, or at
feasibility level, to either increase the supply of water or to improve wastewater
treatment. The project will increase the control and data gathering of USUG on the
production location, distribution of water in the network and treatment of wastewater. It
will increase awareness on water and energy saving possibilities which can also be
applied in future development of the infrastructure.
C. RETA 7918
48. The consortium of Vitens Evides International, Royal HaskoningDHV and seven
individual national consultants was awarded a contract to prepare the project (RETA).
The official starting date of the RETA, on July 16, 2012, was followed by a one-month
inception phase. Upon the approval of the inception report, international and national
consultants prepared an interim report, which was submitted before November 1st.
Another round of consultations and investigations was conducted in November-
December 2012, which resulted in a draft final report. After receiving comments, in
February 2013, this Final Report was completed.
49. Several consultation meetings were held at the MUB, OSNAAG, USUG, Ministries
and other relevant agencies and institutions during the different phases. In the period
between the inception phase and the interim stage the management of USUG changed,
which required additional efforts in order to achieve concurrence regarding the scope of
the project. Several presentations were given, to USUG’s management and staff, on the
contents and choices provided in the Interim report. Additional workshops were provided
on to clarify and enhance operations at the OCC (Operational Control Centre) during
various phases of the project.
50. Possibilities for large energy savings were described in the interim and draft final
reports, but hesitations to implement proposed energy saving measures soon became
clear. The most promising proposals, those with the largest reductions in energy use,
required drastic changes to the two large pumping stations at Upper and Central. After
extensive discussions it became clear that these pumping stations, built with Japanese
aid, were not allowed to be modified. All energy saving proposals are described in this
report, also those at these two large pumping stations, but costs for converting the two
stations Upper and Central are no longer included in the financing proposals.
RETA 7918 Final report Page 22
D. This Report
51. The project recognizes three main components. The components were validated
during the inception workshop on August 6th. After introductory chapters I, II and III,
this report describes the three components as follows:
(i) Component 1: Energy saving and operational control improvement in chapters:
IV Water supply – Description of the system
V Water supply – Energy saving
VI Water Supply - Operational improvements
VII Wastewater Treatment Operational improvement
(ii) Component 2: Non-revenue water and consumption reduction in chapter IX; and
(iii) Component 3: Capacity development and institutional strengthening in chapter X.
RETA 7918 Final report Page 23
II. SCOPE OF THE TECHNICAL ASSISTANCE RETA
A. Project Objectives
52. The Urban Environment Infrastructure Fund (UEIF) under the Urban Financing
Partnership Facility(UFPF) managed by the ADB will provide a $3,7 million grant
investment to finance (i) operations improvement of the central wastewater treatment
plant (CWWTP) and drinking water supply network; (ii) introduction of local control and
central operational control systems (SCADA7); (iii) implementation of a domestic and
industrial water metering program; and (iv) a program for Non-Revenue Water
(NRW)and water consumption reduction for apartment dwellers. This aims to (i) deplete
the need of primary energy resources for water and wastewater systems operations, (ii)
save water at both customer and supply level ensuring more sustainable use of available
water resources, (iii) decrease the wastewater pollution, and (iv) promote a more
reliable and more efficiently run utility.
B. Tasks and Deliverables of the Technical Assistance RETA
53. The RETA has developed proposals for improvement of operations and services
delivery of Ulaanbaatar’s water supply and wastewater management schemes. It
delivered a project feasibility study packaging for the three project components
mentioned above that is suitable for financing by the UFPF (with a total investment value
of US$3.7 million) and that is integrated into the investment program PPTA 7970-MON.
Implementation of the proposed improvement interventions and procurement,
installation and upgrade of equipment and infrastructure is not part of the RETA and will
be carried out under the investment program in 2013/2014.
54. The tasks executed included:
(i) Review and assessment of existing investment plans and designs for
rehabilitation and replacement of various assets/equipment aiming at
improvement of operational performance, energy efficiency, service delivery and
NRW reduction;
(ii) Development of a feasibility report assessing the technical, financial,
environmental, economic and social viability of the abovementioned three
components, assuring compliance with ADB’s requirements;
(iii) Compilation of the procurement list of items to be procured through the project,
including technical specifications, and cost estimations;
(iv) First outline of an institutional and capacity framework, highlighting a set of
recommendations and priority reforms needed for smooth implementation of the
three project components and the overall improvement of policies and
institutional arrangements, including identification of the training needs within
USUG and OSNAAG and conduction of workshops on project related topics.
55. Reports delivered by the RETA include (all reports were delivered by the RETA in
English and translated in Mongolian):
7Supervisory Control and Data Acquisition
RETA 7918 Final report Page 24
(i) Inception report: review of operations, documents and policies, collection of
baseline data, validation of the project components, stakeholder’s consultation
(submitted August 2012;
(ii) Interim Report: scenarios, options and feasibilities for the three indicated
components, preliminary designs for rehabilitation/modernization of infrastructure
and installation of various equipment, preliminary cost estimations and
provisional environmental, social and financial assessments (November 2012);
(iii) Draft-final Report: feasibility report with detailed technical designs, procurement
and financing plan, cost estimates, monitoring framework for impact assessment,
training needs assessment, implementation arrangements, environmental,
financial and social assessments (January 2013);
(iv) Final report: Final report (this report), including comments from stakeholders
(April 2013);
(v) Initial Environment Examination for the project components; and
(vi) Bidding documents for all identified works packages.
C. Relation with the Investment Program PPTA 7970-MON
56. The RETA has been conducted in parallel to the PPTA investment program: the
RETA designed and prepared the interventions and investments that are related to one
of the components of the investment program. Close coordination and cooperation with
the PPTA consultants’ team was therefore needed and was conducted through regular
consultations.
57. Coordination between the RETA and the PPTA has been done under the leadership
of the PPTA consultant. The RETA team reported directly to the PPTA consultant, who
included the RETA reports in the PPTA reports, and aggregated and consolidated all
related documentation, procurement lists and reports to produce one final Multitranch
Financing Facility (MFF) document, Report and Recommendation of the President (RRP)
and facility administration manual (FAM).
D. Relation to other programs
58. Within UB several other programs on water supply and wastewater are being
implemented. These are:
JICA
- Study on development of projects in the water and sewerage sector by NJS
Consultants and Tokyo Gesuido Service;
- Study strengthening the regulation of industrial wastewater;
- Planning for the reduction of NRW, improvement of the SCADA system and the
water distribution system (Bureau of Waterworks, Tokyo Metropolitan
Government).
Koica
- Master plan for water source development and to implement the survey upon the
potential of groundwater resources of UB city (Grant aid, completion year 2013);
RETA 7918 Final report Page 25
- Koica implementing a project in Yarmag district to develop 20,000 m3/day
groundwater and construction of a water supply facility (Grant aid, completion
2013).
WHO
- Water Safety Plan for USUG sponsored by the ADB (Grant aid, completion 2013).
KfW
- New Nisek Airport Treatment District. In this area water supply and wastewater
treatment will be built to provide for an estimated 170,600 residents in 2030.
World Bank
- Urban Services Rehabilitation Project (1990 – 1996);
- Ulaanbaatar Services Improvement Project in 3 phases.
RETA 7918 Final report Page 26
III. Short description of Ulaanbaatar8
A. General
59. Ulaanbaatar (literally "Red Hero") is the capital and by far the largest city
of Mongolia. An independent municipality, the city is not part of any province, and its
population as of 2008 is over one million and now estimated at 1.3 million (2012).
Located in north central Mongolia, the city lies in the Tuul River valley, at an elevation of
about 1,310 meters above mean sea level. It is the cultural, industrial, and financial
heart of the country. It is the center of Mongolia's road network, and is connected by rail
to both the Railway in Russia and the Chinese railway system. The city was founded in
1639 as a movable (nomadic) Buddhist monastic center. In 1778 it settled permanently
at its present location, the junction of the Tuul and Selbe rivers. Before that it changed
location twenty-eight times, with each location being chosen ceremonially. In the
twentieth century, Ulaanbaatar (UB) grew into a major manufacturing center. Many of
the industries are located in the Southern and South-western part of the city.
60. Owing to its high elevation, its relatively high latitude, its location hundreds of
kilometers from any coast, and the effects of the Siberian anticyclone, UB is the coldest
national capital in the world, with a monsoon-influenced, cold semi-arid climate that
closely borders a subarctic climate. The city features brief, warm summers and long,
bitterly cold and dry winters. Most of the annual precipitation of 216 millimeters falls
from June to September. It has an average annual temperature of −2.4 °C. The city lies
in the zone of discontinuous permafrost, which means that building is difficult in
sheltered aspects that preclude thawing in the summer, but easier on more exposed
ones where soils fully thaw. Suburban residents live in traditional Gers that do not
protrude into the soil.
61. UB is divided into nine districts: Baganuur, Bagakhangai, Bayangol, Bayanzurkh,
Chingeltei, Khan-Uul, Nalaikh, Songino Khairkan, and Sukhbaatar. Each district is
subdivided into Khoroos, of which there are 121. The “concrete” city consists of a central
district built in Soviet 1940s and 1950s-style architecture, surrounded by and mingled
with residential concrete tower blocks. In recent years, many of the tower block's
ground floors have been modified and upgraded to small shops, and many new buildings
have been erected. Many inhabitants of UB, especially those that migrated from the
rural areas, live in large so-called Ger quarters to the North of the central district.
Figure 1 Satellite image of Ulaanbaatar (Source: Google Earth).
8 Information to some extent from Wikipedia.
RETA 7918 Final report Page 27
62. Ulaanbaatar is stretching out over a length of approximately 27 km, from East to
West. Along the North-South axis, the “concrete” city is barely 4.5 km, but the Ger
areas extend an additional 6 km to the North, with some Gers to be found as far as 16
km north of the concrete city. Elevations in the East are slightly higher, at ~1,340 m,
than those in the West at 1,250 m. To the North and South elevations are rapidly
increasing, with some of the Ger areas built on the Northern hills at elevations of 1,600-
1,700 m. The airport is located in the South-western part of the city.
E. Social and Natural Environment9
i. Social conditions
63. The Mongolian economy has been in good condition (growth of 16.7 % year on
year in the first quarter of 2012). This economic growth however is also causing inflation
which touched 16% in April 2012, above the Bank of Mongolia’s inflation target of 10%.
Economic growth is being led by the expanding trade, growth of transport and
development of the Oyu Tolgoi mine. As for the fiscal balance, fiscal deficit reached
4.7% of GDP in March 2012, the highest level in the past 2 years. Mongolia has some of
the world’s largest untapped mineral deposits. However due to the international
economic slowdown capital investments in infrastructure are lacking and the riches are
not exploited yet.
64. Household income has increased rapidly, especially after 2005, from only 3.7
USD/household per month in 1992, to an average of 676,392 MNT or 490 USD per
month per household in 2011.
65. The population of UB has been increasing rapidly, mainly because of influx from
rural areas. Most of the migrants settle in the Ger areas. Whereas the central district
was established in accordance with the City Development Plan, the Ger areas develop
spontaneously, without much planning. The level and standard of services in the Ger
areas such as roads, water supply, sewerage, heating, etc., is significantly lower than
those in the central district.
ii. Natural Environment
66. UB is located in the Tuul river valley, with almost the entire city located on its
North bank. The Tuul River originates at the Henteyn Nuru mountain range, east of UB,
and has a total length of 819 km before it merges with the Orhon River, a tributary of
the Selenge River that feeds Lake Baikal. The Tuul River basin has an area of 49,774
km2. At UB the long term annual average discharge is about 26m3/s (1941 – 2010)10.
67. Downstream of UB the valley of the Tuul river widens, permanent tributaries are
scarce and the river starts losing water leading to an on average small reduction of
runoff in downstream direction. Approximately two thirds of the runoff occurs between
the start of June and the end of August of each year. The river is frozen during the
winter. Between December and March the river runoff is very low, less than one percent
of the annual total flow.
9 From JICA: Study on the strategic planning for water supply and sewerage sector in Ulaanbaatar City in Mongolia (interim report October 2012) 10 Integrated water management national assessment report (Ministry of Environment, 2012)
RETA 7918 Final report Page 28
68. The geomorphology of the Tuul river basin is included generally in a mountainous
area and formed from mountain range, its mountainside and foot, streams, river mount,
valley and narrow ravines. The mountains surrounding the river basin become a
recharge region of groundwater, the valley of UB is an accumulation, transference foot
region. The geological structure of the basin covers granite rock penetrated
sedimentary, magic rocks of Cambrian, Devon, Carbon periods frozen on depth at
Jurassic and Triassic periods that distributed. Tertiairy (Neogene, Paleogene) sediments
are averagely 80 m thick, mainly have clayish structure of not penetrated water. Modern
quaternary of Holocene aged alluvial, lake, and wind originated sediments distributed
along Tuul river valley contains comparatively high content of groundwater resources.
69. UB depends entirely on groundwater for its water supply and abstractions have
increased steadily in recent years. Studies by the Ministry of Environment (2012), the
Water Authority (2005 and 2010) and others estimate that a total installed capacity of
339,700 m3/d of groundwater is available, of which the installed capacity for USUG is
255,000 m3/d.
70. JICA carried out preliminary studies regarding the recharging of groundwater.
Assuming a 9% rate of recharge and an annual precipitation of 342 mm/year,
groundwater recharge is estimated at approximately 540,000 m3/day. This would show
that groundwater is not overused, at present, but that with increasing abstractions this
could soon be the case. The JICA study also conducted research on improving
groundwater resources, among others by creating an underground dam to store water.
In a recent more thorough study (2012) of the Ministry of Environment and Green
Development the renewable groundwater resources are calculated to be over 1 mio
m3/day which indicates that the urgency is not as high as calculated in the JICA study.
RETA 7918 Final report Page 29
IV. Water supply – Description of the system
A. Current Master plan
71. The existing Water and Wastewater Master Plan of Ulaanbaatar, developed in
2006 with assistance of AFD (l’Agence Francaise de Développement). It used the year
2020 as planning horizon. JICA is in the process of developing a new Master plan with a
2030 planning horizon.
72. Water demand is projected to double between now and 2030 as a result of
planned urban developments in the southern and western areas of the city. The existing
4 water abstraction areas will remain the major water sources, but two additional well
fields are identified as new water sources, at Yarmag (for the Airport area) and the 5th
Water Source (for Biokombinat and the New City Center).
73. The JICA master plan identifies three major adjustments that are required to
improve water distribution and transmission: the.
(i) Separation of distribution networks to ensure good pressure management. At the
moment water from different sources and reservoirs with various pump heads
and levels are mixed and distributed in a single network. This creates high
pressures in the low lying areas and low pressures in the areas with high
elevation. It is energy inefficient and it is proposed to separate the network in
such a way that water will flow to the areas that can be fed by using the natural
gravity. By doing so it is possible to decommission pumping stations at Tasgan
and Toirgiin and reduce electricity expenses;
(ii) Replacement of pipes (51 km) in Suvbaatar Plaza and the Meat and Industrial
supply areas to counter leakage and improve water quality;
(iii) Extension of the network in accordance with the new housing area development
planned in the “Ulaanbaatar Services Improvement Project 2” and the “40,000
households’ project”.
Only the extension of the network has been implemented, so far. The separation of the
network is still an important issue to be implemented, not only to improve energy
efficiency by managing pressures, but also to reduce leakage. Replacement of pipelines
is also still a priority as with age the amount of leakage of the network will increase and
resources will be wasted.
F. Description of USUG’s water supply system
74. The water supply network for the core of Ulaanbaatar consists of one integrated
system with pumping stations that supply groundwater from a number of well fields into
the distribution system.
75.
76.
77.
RETA 7918 Final report Page 30
78. Figure 2 provides a graphical overview of the locations of main assets in the
water supply scheme (pumping stations, reservoirs and booster stations, excluding
conduits and valves).
Figure 2 Overview of assets, pumping stations and reservoirs.
79. USUG’s water supply is entirely based on groundwater extracted from four well
fields located within the Tuul river valley at the southern side of the city (see Figure 1).
The names of the sources, starting from upstream side are: Upper Source, Central
Source, Industrial Source and Meat Source (also called Meat Complex). Central Source is
the most important as water distributed from this source accounts for approximately 42
% (63,600 m3/day) of the total distributed water in 2011. Nisekh and Bayangol stations
are two ‘stand-alone’ stations, supplying water locally, and are not inter-connected to
Ulaanbaatar’s main distribution network. Currently, the source water is of generally good
quality and sufficient quantity and is supplied to the distribution system without any
treatment, except that disinfection by chlorine is applied.
80. The main distribution network covers an area with approximately 1 million
inhabitants, with planned growth to over 1.6 million in the year 2030. The network of
predominantly looped configuration consists of approximately 547 km of pipes, laid in a
RETA 7918 Final report Page 31
hilly area with elevation differences of up to 160 m. Information on material, diameter,
age and length are presented in Table 2 and Table 3.
Table 2 Material, diameter and length of distribution pipes
Material Diameter (mm) Length (m) Remark
Cast iron 100 – 500 40,069
Steel 500 – 800 310,195
Polyethylene - 150 197,00 Ger area
Sum 547,264
Table 3 Age and length of distribution pipes
Age Length (m) Share (%)
1959 – 1972 (over 40 years) 75,493 13.8
1973 – 1982 (over 30 years) 149,832 27.4
1983 – 1992 (over 20 years) 82,618 15.1
1993 – 2007 (less than 20 years) 239,321 43.7
Total 547,264 100.0
81. A schematic layout of the main distribution pipelines is presented as Figure 3.
Figure 3 Schematic layout of UB distribution system.
82. The water pumped from deep wells at the sources is normally collected in the
storage reservoirs, where chlorination takes place. From there, it is pumped towards the
distribution area by the source pumping station. An exception is Upper Source, located
40 km upstream of Ulaanbaatar, where the water from the source is first pumped
RETA 7918 Final report Page 32
towards X-reservoir, from where it is supplied towards the city by gravity. The X-
reservoir functions as a break-pressure tank. Data on the capacity of the four sources
and the present level of abstractions are presented in the table below.
Table 4 Water production data (m3/h)
Location Capacity Average 2011 Currently
Central 4,750 2,634 2,653
Upper 3,75011 2,236 2,204
Industrial 1,500 895 924
Meat 625 480 485
Total 10,625 6,245 6,266
83. Due to the rather hilly configuration of Ulaanbaatar, a number of booster stations
and service reservoirs are located within the city area. The booster stations ensure
sufficient pressure in the network, especially in the northern areas located at higher
elevations. The actual existing reservoir capacity is 41,000 m3 and detention time is 5.7
hours. This is sufficient to be able to manage peak demand periods and there is no need
for additional reservoirs. There is no clear separation between transmission and
distribution pipelines and water flows in to the reservoirs during low demand periods
whereas it contributes to the supply in high demand periods of the day like early
morning and early afternoon. From the service reservoirs, water is supplied by gravity to
the customers. The main information about these components is given in Table 5, which
includes the above-mentioned X-reservoir.
Table 5 Reservoirs and booster pumping stations in Ulaanbaatar
Reservoir / Booster station Volume (m3) Pump capacity
(m3/h)
Hailast reservoir and booster station 1,500 m3 64 m3/h
Tolgoit booster station - 96 m3/h
Sharkhad reservoir and booster station 500 m3 10 m3/h
Taskhan reservoir and booster station 18,000 m3 630 m3/h
West reservoir and booster station 6,000 m3 950 m3/h
Toirgiin booster station - 520 m3/h
X-reservoir 6,000 m3 -
North-east reservoir 6,000 m3 -
Chingeltei 500 m3 110 m3/h
3rd – 4rd district reservoir 6,000 m3 -
84. Monitoring data about pressure, flow and energy consumption, which are needed
for daily adjustments in the operations of these assets, but also in case of emergencies,
are partly lacking for both the pumping stations, as well as in the water distribution
network, reservoirs and booster stations. Where data is available, it is often not
reviewed nor scrutinized for improvement purposes of the water supply scheme.
85. Due to the lack of standardized, automated operating systems and monitoring
routines, room exists for USUG to increase the efficiency of operations of assets in terms
of flow, pressure and energy consumption. By installation of monitoring devices,
11 The original Upper scheme was laid out for 4,000 m3/h. The current well capacity is slightly lower.
RETA 7918 Final report Page 33
operational control systems (SCADA) and flow control valves, USUG will be enabled to
better control the water supply scheme and prepare itself for the envisaged urban
developments.
G. Water Safety Plan12
86. Water Safety Plans (WSPs) are an increasingly recognized cost-effective,
management-oriented, preventive approach to drinking-water safety. Through the
development of a WSP, water supply systems are systematically assessed from source
to consumers, risks identified and control measures put in place to minimize the risks of
contamination. USUG, in cooperation with WHO and ADB, has worked on the
development of a WSP (2012-2013). The main findings are presented below.
87. USUG is committed to have a WSP for their water supply at UB. They have
established a WSP team within the organization and assigned a number of key personnel
to this group. The Central Laboratory has key responsibilities for the development of the
WSP for USUG. It is advisable that these responsibilities are more widely distributed to
include other members of the WSP team such as water supply engineers and operational
management at USUG.
88. The UB water supply provides water for 1.3 mio people from four sources, four
separate treatment plants and by way of three different delivery processes. The WSP will
eventually include all system components and processes under the control of USUG from
the catchment and source, through the treatment and storage processes, finishing at the
distribution end points where the consumers access the water. As the methodology of
risk assessment and WSP are new to staff of USUG, progress has been minimal, so far.
Staff will have to understand the processes, risks involved and priorities first, to be able
to decide on appropriate actions.
89. The key features of the risk assessment are as follows;
i. The disinfection processes and procedures currently in existence provide
inadequate protection against micro-pathogenic contamination of the water
supplied to customers, among others because the creation of disinfection by-
products “forces” USUG to reduce the residual level of Free Available Chlorine
(FAC) to insufficient levels;
ii. There is a high potential for disease outbreaks as a result of the rather
unsatisfactory filling procedures and practices at all kiosks;
iii. Operational monitoring is poorly controlled with incorrect reporting, as
witnessed by the consultant during on-site investigations. In addition,
there is inadequate training of operational personnel in the calibration of
important (and expensive) automatic monitoring equipment;
iv. The production of disinfection by-products, coupled with the lack of a
regular flushing program and the lack of pre-storage particle removal
process suggests a high likelihood of bio-mass build-up in both the
reservoirs and throughout the distribution system;
v. To protect public health, the handling and storage of water throughout the
truck operations needs to improve, to ensure that contamination pathways
are either sufficiently reduced, or eliminated altogether;
vi. There are a number of improvements that will require the development of
new or improved operational procedures, as well as staff training to
support these.
12 From Water Safety Plan (WSP) Report (Draft Version 3), March 2013
RETA 7918 Final report Page 35
V. Water supply – Energy saving
90. At several pumping stations, valves downstream of pumps are throttled and at
some places in the distribution network pressures are found to be high, hinting at the
possibility to reduce USUG’s energy use in the water distribution. This section contains
proposals that aim at reducing the energy consumption of the UB water supply system.
Focus is on the high pressure distribution pumps at the four production sites Upper
Source, Central, Industrial and Meat.
91. The table below shows the energy consumption of the four main pumping
stations operated by USUG.
Table 6 Average energy consumption pumping stations
Pumping
station
Av. Energy consumption (kWh/m3)
Total Borehole Distribution
pumps pumps
Upper source 0.826 0.360 0.466
Central 0.582 0.250 0.332
Industrial 0.642 0.348 0.294
Meat 0.380 0.159 0.221
Average 0.661 0.296 0.365
The table shows that the distribution pumps at the Upper Source PS consume much
more energy per m3 of water distributed than the distribution pumps at the other
pumping stations. Initial energy saving efforts concentrated on the Upper PS, therefore.
92. Possible energy saving at each of the four Pumping Stations is presented below in
sections A, B, C and D. The sum of the energy savings is shown in Section E. As it was
found that, because of the layout of the transmission mains, energy saving at the Upper
PS would be minimal, at best, an additional option F was investigated whereby water
supply from Upper would be reduced and the supply by Central (where saving is
possible) increased. Thus, the options described in this section can be summarized as:
A. Energy saving at the Upper PS;
B. Energy saving at the Central PS;
C. Energy saving at the Industrial PS;
D. Energy saving at the Meat PS;
E. Sum of energy savings at the 4 stations Upper, Central, Industrial and Meat;
F. Sum of energy saving at the 4 stations Upper, Central, Industrial and Meat by
changing supply zones of Central and Upper PS.
93. It turns out that option F, the sum energy saving at all stations and changing
supply zones of Upper and Central, provides a much higher energy saving than option E
(sum of just the energy savings A, B, C and D). For reasons explained in Section V.I
USUG is not in favor of Option F. But as it values energy savings, it has agreed with
implementation of Option E, individual improvements at Upper, Central, Industrial and
Meat.
RETA 7918 Final report Page 36
94. This section concentrates on saving energy, among others by a reduction in the
pressures maintained in the distribution network. While this can provide a significant
reduction in energy consumption, it has another very favorable by-product, reduction of
water losses through leakage. Because pipes are buried at about 3.5 m (and often more)
below the surface level, leakage in the distribution network is hard to detect and costly
to repair. For this reason, the NRW-reduction program proposed in this feasibility report
concentrates on cheaper measures to reduce NRW, rather than through the difficult and
costly method of reducing physical leaks. But a pressure reduction helps to solve this
problem. Investigations in VEI-supported NRW-reduction projects have shown that the
reduction in leakage can be even more than proportional. For example, reducing the
pressure by 20% may reduce physical losses by more than 20%.
A. Energy saving at the Upper Pumping Station
95. A schematic of the Upper Source system is presented below. The energy
consumption at pumping station Upper Source is high mainly because the water has to
be pumped to the X-reservoir through a 28 km long transmission main that has to cross
several hills of which one of 1,510 m elevation.
Figure 4 Schematic layout of Upper Source and X-reservoir
96. Pumping station Upper Source pumps water to the X-reservoir water via two
28.65 km long parallel steel pipelines. A longitudinal profile of the transmission mains is
shown in Figure 5. From X-reservoir water is supplied to Ulaanbaatar city. The incoming
and outgoing main pipelines of the X-reservoirs are not connected, which means an
independent operation due to a ‘hydraulic cut’. Important technical details of the PS
Upper Source are:
i. The pumping station was built approx. in 1992;
ii. The level at Upper Source reservoir is 1,420 m+MSL;
iii. The level at X-reservoir is 1,426 m+MSL;
iv. The original design capacity was 4,000 m3/h;
v. The pumps were replaced with Kubota pumps in 2006;
vi. A total of five (5) pumps are now installed: 2 pumps of 2,100 m3/h and 3 pumps
of 1,200 m3/h, which all pump against a head of 140 mwc at their best efficiency
point;
vii. There are no frequency converters.
RETA 7918 Final report Page 37
Figure 5 Pipe profile between pumping station Upper Source and X-reservoir.
97. Pumps with high heads are required to conquer the high hill in the longitudinal
profile. The original (Russian) design capacity of the pumps of 4,000 m3/h was a
reasonable choice as it resulted in a hydraulic gradient without any unnecessary losses
(see Figure 6 below).
Figure 6 Hydraulic grade line with original design capacity of 4,000 m3/h.
1340
1360
1380
1400
1420
1440
1460
1480
1500
1520
1540
1560
Upper to X-reservoir: Pipeline
Ground level
Pipeline
Up
per
So
urc
e
X-r
eserv
oir
X-r
es
erv
oir High pump
pressure
Up
pe
r S
ou
rce
RETA 7918 Final report Page 38
98. During site visits in September and November 2012, it was observed that Upper
Source PS was pumping with much lower flows than the original design flow of 4,000
m3/h:
i. Generally, only one of the large pumps is in operation;
ii. Valves between the pumps and the transmission mains are throttled
(approximately only 20% open), to ensure that, with the lower flows, the pumps
operate within their preferred range; flows from the pump vary a little over the
day and from day to day, generally between 2,100 and 2,300m3/h and ~2,200
m3/h on average, to ensure that sufficiently high water levels are maintained at
the X-reservoir. Figure 7 shows the variations in flow in October 2012. Changes
in flow are achieved by adjusting the throttled valves a little;
iii. At the highest point, ~16 km from the pumping station, air enters the pipelines,
causing the water to flow in a free-fall over a length of ~4 km (see Figure 8
below;
iv. The control valves in the incoming lines at the X-reservoir are fully open
(information operator).
Figure 7 Flows from Upper PS to the X-reservoir (first half of October 2012).
99. Energy is lost in the current pumping process at Upper Source in two ways: 1)
valves are throttled (they have to be to avoid a very large flow) downstream of the
pumps; and 2) after the top of the hill, over 60 m of head is lost because the water in
the transmission pipes continues in free-fall (see Figure 8). The throttling of the valves
could be counteracted, and energy saved, through modifications to the pumps (for
example by changing impellers, or the entire pumps). However, the energy lost after the
top of the hill cannot be retrieved.
1800
1900
2000
2100
2200
2300
2400
2500
2600
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
m3/h Upper PS
Max
Av
Min
RETA 7918 Final report Page 39
Figure 8 Current hydraulic grade line transmission from Upper PS to X-
reservoir
100. The throttled valves cause an average pressure drop of ~19 mwc. Changing the
impeller could change the working point of the pump, whereby the pump would pump a
flow of 2,200 m3/h at 116 mwc, rather than the 135 mwc under which it now operates.
The energy saving will be approximately 3,432 kWh/day, as shown in the table below.
Table 7 Possible energy saving at PS Upper source
Upper Flows Currently Proposed Saving
Time m3/h H
(m) P (kW)
H (m) P (kW)
kWh
1 2230 132 1005
113 860
145
2 2230 132 1005
113 860
145
3 2203 135 1016
116 873
143
4 2200 135 1014
116 871
143
5 2203 135 1015
116 872
143
6 2203 135 1015
116 873
143
7 2206 135 1017
116 874
143
8 2177 136 1011
117 870
141
9 2160 137 1010
118 870
140
10 2153 137 1007
118 868
140
11 2149 137 1005
118 866
139
12 2158 137 1010
118 870
140
13 2191 136 1017
117 875
142
14 2188 136 1016
117 874
142
15 2198 135 1013
116 870
143
16 2188 136 1016
117 874
142
17 2218 134 1015
115 871
144
18 2236 132 1008
113 863
145
1340
1360
1380
1400
1420
1440
1460
1480
1500
1520
1540
1560
Upper to X-reservoir: Now 2200 m3/h
X-r
es
erv
oir
Energy loss
from free-fall
Energy loss from throttled valves
Up
pe
r S
ou
rce
RETA 7918 Final report Page 40
Upper Flows Currently Proposed Saving
Time m3/h H
(m) P (kW)
H (m) P (kW)
kWh
19 2228 132 1004
113 860
145
20 2234 132 1007
113 862
145
21 2239 132 1009
113 864
145
22 2250 131 1007
112 861
146
23 2241 135 1033
116 888
145
24 2222 135 1024
116 880
144
Totals 52,901 135 24,300 116 20,868 3,432
101. The current energy use as shown in the above table is 24,300 kWh for 52,901
m3/day of water pumped, or 0.459 kWh, slightly less than the actual energy use of
0.466 kWh/m3 recorded at Upper.
102. The possible energy reduction of 3,432 kWh/day, corresponding with a 14%
saving, translates to an annual saving of ₮110 million per year, equivalent to almost
USD 80,000 per year (see the table below). Changing the impeller of one of the pumps
would cost approximately 50,000 USD, so its cost would be recovered within one year.
Table 8 Energy saving at PS Upper Source
Upper PS kWh/day kWh/year ₮ mio/yr USD/yr
Currently 24,300 8,869,610 780.5 565,598
Possible 20,868 7,616,835 670.3 485,711
Saving 3,432 1,252,775 110.2 79,887
B. Energy saving at the Central PS
103. A schematic diagram of the Central PS is shown in Figure 9 below. Two pumping
groups can be distinguished in the Central PS. Pumping group 1 consists of four pumps
(1 to 4 in Figure 9), each with a capacity of 630 m3/h against a head of 90 mwc (at the
best efficiency point). These pumps are provided with a frequency converter. Pumping
group 2 consists of three large pumps (5-7 in Figure 9), each with capacity 2,000 m3/h
against a head of 100 mwc (at best efficiency point). Normally, only one large pump is
in operation. The large pumps are not provided with a frequency converter. The
discharge header of both pump groups is connected (through a throttled valve).
RETA 7918 Final report Page 41
Figure 9 PS Central with two pumping groups
104. From the Central PS three outgoing pipelines (see Figure 9) supply water to the
Central supply zone, a 400 mm pipeline, one of diameter 600 mm and one of diameter
800 mm. All three outgoing pipelines supply water to the Central supply zone with a
pressure of 51 mwc. This is achieved in a different way for the small pumps and the
large pumps. The small pumps at pump group 1 are provided with a frequency converter
for which set points of 51 mwc are used. For the large pump group, the pressure of 51
mwc is achieved by throttling the valves immediately downstream of the pumps.
105. It turns out that a pressure of 51 mwc in the outgoing mains of the Central PS is
exactly enough to maintain a minimum pressure of 20 mwc in the distribution system at
the CTPs. A pressure of 20 mwc is the minimum required by the contracts between
USUG and OSNAAG, the housing authority of UB. Pressure data of some CTPs in the
Central supply zone are shown in the charts below (see Figure 10). Judging from the
high pressures at night, there needs to be no fear that the 51 mwc pumping pressure
used at night is insufficient. Lowering the night set point to 46 mwc, or even lower,
would probably be acceptable. There is probably scope to increase set points during the
day with a few metres, especially if demands are increasing in the future.
Throttled valve
Throttled valves
RETA 7918 Final report Page 42
Figure 10 Pressures at CTPs in the Central supply zone (1st half October 2012)
106. Water demand varies over the day (see Figure 11 for flows supplied by Central
PS over the first 14 days of October 2012). During the night, from about 20h00 to
07h00, the flow varies between 2,200 and 2,600 m3/h, with an average of
approximately 2,400 m3/h. During the daytime demand increases to an average 3,000
m3/h (variations between 2,500 and 3,300 m3/h) from 08h00 to about 14h00. After
14h00, demand slows down gradually. The average flow supplied by Central PS was
2,653 m3/h, or just over 64,000 m3/d, during the first half of October 2012.
Figure 11 Flows delivered by PS Central during the first half of October 2012
107. During the night, from about 20h00 to 07h00, only one large pump is in
operation. A large pump can supply water with a flow between 2,200 and 2,600 m3/h.
Generally, during the daytime a small pump must be added. It happens occasionally that
the water demand is only just a little higher than what the large pump can supply on its
own. The operator then decides to add a small pump but, to avoid it would run too
slowly, at the same time increases the pressure set point from the usual 51 to 58 mwc.
15
20
25
30
35
40
45
50
55
60
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
mwc Pressures in Central PS supply zone
CTP1 CTP2 Apt 15
Apt 23 West side CTP 40
1800
2000
2200
2400
2600
2800
3000
3200
3400
3600
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
m3/h Central PS
Max
Av
Min
RETA 7918 Final report Page 43
The higher set point increases water demand from Central PS, as some supply to the
area that normally is derived from the X-reservoir will be taken over by the supply from
Central. With the increased set point and increasing water demand, the small pump
supplies more, making its operation sufficiently stable.
108. The small pumps are equipped with a frequency converter and operate as energy
efficiently as is possible. However, energy is wasted in the way the large pumps are
operated, whereby pressures are reduced by throttling valves. The energy currently
used is shown in the calculation table below. The flows shown are the average hourly
flows for each hour of the day during the first 2 weeks of October 2012.
Table 9 Energy use by the pumps at PS Central
Present Total Large pumps Small pumps Total
Time Flows Flows H (m) P (kW) Flow H (m) P (kW) kWh
1 2459 2459 89 748 748
2 2401 2401 91 747 747
3 2364 2364 93 752 752
4 2354 2354 93 749 749
5 2347 2347 93 746 746
6 2376 2376 93 756 756
7 2440 2440 90 751 751
8 2930 2500 90 769 430 51 91 860
9 2935 2500 90 769 435 51 92 861
10 3034 2500 90 769 534 51 113 882
11 3071 2500 90 769 571 51 120 890
12 3014 2500 90 769 514 51 108 878
13 2925 2500 90 769 425 51 90 859
14 2984 2500 90 769 484 51 102 872
15 2902 2500 90 769 402 51 85 854
16 2793 2500 90 769 293 58 85 855
17 2816 2500 90 769 316 51 67 836
18 2653 2500 90 769 153 58 45 814
19 2617 2500 90 769 117 58 34 804
20 2630 2500 90 769 130 58 38 807
21 2627 2500 90 769 127 58 37 806
22 2582 2500 90 769 82 58 24 794
23 2500 2500 90 769 770
24 2477 2477 91 771 771
Totals 64,229 59,217 90.5 18,332 5,011 55.4 1,130 19,462
109. Total energy used in one day, according to the above table is 19,642 kWh for a
total of 64,229 m3/day of water pumped. This amounts to 0.303 kWh/m3, slightly less
than the 0.332 kWh/m3 actually recorded.
110. Energy saving can be achieved by avoiding the throttling of the pressure mains
just after the large pumps. This would normally be achieved by installing frequency
converters at each of the pumps. However, for 6 kV pumps, frequency converters had
been tried at the CWWTP wastewater treatment plant, with disappointing results:
RETA 7918 Final report Page 44
Because of voltage fluctuations, the frequency converter operations became unstable
and the converters burned out within a few months and were never used again.
Therefore, energy saving efforts focused initially on replacing the pumps by new 6 kV
pumps that would pump an average 2,500 m3/h at 51 mwc. This would save energy
over the 24 hour period that the large pumps are running and would cover water
demand during most of the off-peak hours. The Q-H curve of the pumps should cover
operations up to a flow of 2,800 m3/h. For higher flows, one of the smaller pumps of
group 1 should pump at the same time, as well. Details of such an arrangement are
shown in the table below.
Table 10 Energy savings with a different large pump at Central
Proposed Total Large pumps Small pumps Total
Time Flows Flows H (m) P (kW) Flow
H
(m) P (kW) kWh
1 2459 2459 52 433 433
2 2401 2401 53 431 431
3 2364 2364 54 432 432
4 2354 2354 54 430 430
5 2347 2347 54 429 429
6 2376 2376 54 434 434
7 2440 2440 52 429 429
8 2930 2500 51 432 430 51 91 522
9 2935 2500 51 432 435 51 92 523
10 3034 2500 51 432 534 51 113 544
11 3071 2500 51 432 571 51 120 552
12 3014 2500 51 432 514 51 108 540
13 2925 2500 51 432 425 51 90 521
14 2984 2500 51 432 484 51 102 534
15 2902 2500 51 432 402 51 85 516
16 2793 2500 51 432 293 51 75 507
17 2816 2500 51 432 316 51 67 498
18 2653 2500 51 432 153 51 39 471
19 2617 2500 51 432 117 51 30 461
20 2630 2500 51 432 130 51 33 465
21 2627 2500 51 432 127 51 33 464
22 2582 2500 51 432 82 51 21 453
23 2500 2500 51 432 432
24 2477 2477 51 428 428
Totals 64,229 59,217 51.7 10,351 5,011 51 1,098 11,449
Saving 41.2% 8,013
111. The saving is quite high at 8,013 kWh per day, or 41% of energy used by the
distribution pumps. It reflects how much energy is wasted by throttling the valves just
downstream of the pumps. The table below shows what it means in financial terms.
RETA 7918 Final report Page 45
Table 11 Energy saving at PS Central
Central PS kWh/day kWh/year ₮ mio/yr USD/yr
Currently 19,462 7,103,593 625.1 452,983
Possible 11,449 4,178,881 367.7 266,479
Saving 8,013 2,924,712 257.4 186,503
112. For a number of reasons, USUG could not agree with changing the pumps at
Central. With USUG hesitant to change all pumps, as there would be no way back, it was
suggested to change one large pump first, as one large pump can handle the required
flow, with the remaining large pumps remaining standby. Supply and installation of such
a large pump is estimated to cost 180,000 USD (2012 cost level), which would be
recovered within one year.
113. After lengthy discussions, USUG declined to change one pump at Central, but
would agree to an option involving frequency converters. Providing the three large
existing 6 kV pumps with frequency converters would provide a much desired flexibility
and would keep all options open at the same time. VEI investigated this option in much
detail, fearing a repeat of what happened to the converters at the CWWTP. Fortunately,
pumping pressure management is much in vogue, not only for energy saving reasons
but also to reduce NRW, and frequency converters improve fast with prices coming
down.
114. The latest 6 kV models of ABB, but other firms will have similar models, are much
improved and can handle voltage fluctuations well, especially with slightly over-sized
models. They do not require a Cosine Phi adjuster and are able to cope with lower
voltages, a recurrent problem of the power supply in UB. For the new models, the high
summer temperatures of UB are no problem also. De-rating is only necessary for
temperatures above 40 0C. By the selection of the oversized model, this will be
accommodated, even at extreme temperatures.
115. The costs of frequency converters are higher than those for replacing the pumps:
- Changing one pump would cost UDSD 180,000 (2012 cost level);
- Changing 3 pumps would cost USD 540,000 (2012 cost level);
- Keeping existing pumps, but adding 3 6 kV frequency converters would cost
approximately USD 1.19 million (2013 cost level). The costs include
installation and the costs of shielding the power cables to the existing pumps.
The internal rate of return is less than before, but still a respectable 13.2% over a 15-
year period.
C. Energy saving at PS Industrial
i. Introduction
116. The PS Industrial supply area is only small (see Figure 12), but it should be noted
that the area shown is not hydraulically isolated from adjacent supply areas. There is a
hydraulic connection with water supply areas Upper Source and Central. The elevation of
the Industrial water supply area varies between 1,280 and 1,286 m+MSL.
RETA 7918 Final report Page 46
Figure 12 PS Industrial - distribution area
117. Four pumps are installed at pumping station Industrial. Generally, two pumps are
in operation (and two pumps are standby). The pumping station is equipped with two
frequency converters. In October 2012, flows varied between 600 and 1,100 m3/h, with
an average of 924 m3/h (see the chart below).
Figure 13 Industrial PS - Flow variation over the day (October 2012)
118. There are no CTP pressures recorders installed in the water supply area of
Industrial. Taking into account recorded outgoing pressures at PS Industrial, the
calculated pressure at the highest en farthest customer would be ~32 mwc during the
day, a little higher at night.
400
600
800
1000
1200
1400
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
m3/h Industrial PS
Max
Av
Min
RETA 7918 Final report Page 47
ii. Energy saving through reduced pressure
119. The current pressure can be reduced to the OSNAAG contract of minimum 20
mwc. As margin for the energy saving-calculation a pressure of 25 mwc will be
assumed. To save energy, it is proposed to drop the minimum pressure in the supply
area by 7 mwc, from 32 to 25 mwc. Pressure set points for the pumps should be
lowered by 7 m also, during the day, to 51 mwc and a little lower at night,
conservatively estimated at 49 mwc. Calculation tables are presented below.
Table 12 Energy use at PS Industrial
Industrial Currently
Proposed
Time Flows H (m) P (kW)
H (m) P (kW)
1 789 52 151
49 142
2 678 52 130
49 122
3 641 52 123
49 116
4 614 52 117
49 111
5 615 52 118
49 111
6 637 52 122
49 115
7 707 52 135
49 128
8 944 58 202
51 177
9 1009 58 215
51 189
10 1065 58 227
51 200
11 1101 58 235
51 207
12 1076 58 230
51 202
13 1071 58 229
51 201
14 1057 58 226
51 199
15 1047 58 224
51 197
16 1049 58 224
51 197
17 1072 58 229
51 201
18 1065 58 227
51 200
19 1065 58 227
51 200
20 1061 58 227
51 199
21 1018 58 217
51 191
22 1025 58 219
51 192
23 925 52 177
49 167
24 852 52 163
49 154
Totals 22,181 55.8 4,594
50.3 4,118
120. Current energy use is calculated at 4,594 kWh for a pumped flow of 22,181 m3/d,
which equals an energy use of 0.207 kWh/m3. The actual energy use for the distribution
pumps, as measured in October 2012, was much higher at 0.294 kWh/m3. It should be
noted that all pumps at Industrial PS are old, which may well explain the higher than
expected energy use. All pumps at PS Industrial will be replaced under this project and
the new pumps should require less energy per m3 pumped.
121. The energy saving achieved by lowering the pump pressure set points is only just
over 10%. In practice, the pump pressure could probably be lowered more. Lower
RETA 7918 Final report Page 48
pressures not only reduce energy costs, but also lower water losses (less water leaks
from the same holes in the pipes) and some actual consumption (taps produce less
water at lower pressures). When demand is indeed less, flows decrease and, with them,
head losses. How much the set points at the PS can indeed be reduced is a matter of
careful operation, whereby the set points are lowered step by step, while checking the
effect of pressures in the network. This lowering of set points can be tested at any time.
122. The calculation of the energy saving in monetary terms is shown in the table
below.
Table 13 PS Industrial – Energy saving distribution pumps
Industrial PS kWh/day kWh/year ₮ mio/yr USD/yr
Currently 4,594 1,676,973 147.6 106,937
Possible 4,118 1,503,006 132.3 95,844
Saving 477 173,967 15.3 11,094
123. As there was quite a discrepancy between calculated and actual energy use at
Industrial, energy saving could be higher than what is shown in the table. In addition, it
may be found that, after the pumps have been replaced, as foreseen under the ADB-
grant, energy use could be reduced further.
124. To reach an optimized pump operation, it is recommended to control the pump
pressures using the principle of ‘Flow Depended Pressure Control (FDPC)’. The purpose
of FDPC is to maintain a constant (minimum required) pressure at the water consumers
independent of the flow. With FDPC, the outgoing flow will be measured. Based on the
measured flow, the system determines an ‘optimal’ outgoing pressure (set point) instead
of a fixed pressure. The resulting outgoing pressure is low at low water demands and
high at high water demand.
125. It should be noted that the above changes will indeed result in an energy saving
for USUG, but others, notably OSNAAG may require additional energy to pump the water
from the delivery points to the levels they require.
D. Reduction pump-pressure at Meat pumping station
i. Introduction
126. Energy per m3 of pumped water at PS Meat at 0.221 kWh/m3 is the lowest of any
USUG operated pumping station. Also the energy costs related to the pumping at the
boreholes is lower than at any other pumping station in UB. However, as pressures in
the Meat PS distribution area are high, there may be some scope for energy saving. This
section describes an energy saving proposal for the Meat PS through a pressure
reduction in the distribution system.
127. The Meat supply area is relatively small and amounts of water from the Meat PS,
at an average 485 m3/h (October 2012) against an average pumping pressure of 53
mwc, are also not very high. Flow variations over the day are shown in Figure 14 below.
Three pumps are installed at pumping station Meat. Generally, one pump is in operation,
with two pumps standby. The Meat PS is equipped with a frequency converter.
RETA 7918 Final report Page 49
Figure 14 Daily flow variations at PS Meat
128. The configuration of the Meat supply area is shown in Figure 15. The Meat water
supply area is supposedly separated from other supply areas. However, considering high
pressures found at some locations, there may be some influence in the Meat supply zone
from other pumping stations.
Figure 15 Overview of the Meat supply area
ii. Current pressures in the Meat distribution system
129. Elevations in the Meat supply area vary between 1,267 and 1,284 m+MSL.
Pressures in three locations, at CTPs, are shown in the charts below. Their locations
within the distribution area are shown in Figure 15 above.
0
100
200
300
400
500
600
700
800
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
m3/h Meat PS
Max
Av
Min
RETA 7918 Final report Page 50
Figure 16 Recorded pressures at resp. Ti-2, Ti-10 and Ti-21
130. Tolgoit ink-2 bair and Tolgoit ink-10 bair are CTPs located close to PS Meat. The
elevation of both is 1,270 m+MSL. Recorded pressures are resp. 60 mwc and 50-55
mwc. Tolgoit ink-21 horoolol is located in the northern section of the Meat distribution
area. Its elevation is 1,284m+MSL. The night pressure is well above 50 mwc; in the
morning a short pressure drop to 25 mwc was observed, but between 07h00 and
midnight, pressure consistently remains 40 mwc. It seems unlikely that these pressures
are caused by only the Meat PS. Influence from other PS and other booster stations
probably plays a role.
iii. Proposed pressure reduction
131. Minimum pressures in the system should be 25 mwc, 5 m higher than the
minimum pressure that USUG has to provide for supplies to OSNAAG. With present
minimum pressures at ~40 mwc, the pumping pressure at PS Meat could be lowered by
15 mwc, possibly somewhat more during the night. The pump curves below show that
this can be realized using the existing frequency converter.
Figure 17 Pump curves for PS Meat (current and proposed)
RETA 7918 Final report Page 51
132. It turns out that the pump efficiency will be a little bit better after reducing the
speed in combination with the same discharge. The current theoretical actual pump
efficiency is approximately 78%. The theoretical actual pump efficiency - after reducing
the speed - will be 80%. For the calculation of the energy saving, this small
improvement is ignored.
133. Consequences for the energy use at PS Meat are shown in the table below.
Table 14 Energy use PS Meat distribution pumps
Meat Current Proposed
Saving
Time Flows H (m) P (kW)
H (m) P (kW)
kWh
1 320 53 62
36 42
20
2 273 53 53
36 36
17
3 245 53 48
36 32
15
4 226 53 44
36 30
14
5 223 53 44
36 30
14
6 244 53 48
36 32
15
7 402 53 78
36 53
25
8 551 53 108
38 77
30
9 615 53 120
38 86
34
10 624 53 122
38 87
34
11 626 53 122
38 88
35
12 608 53 119
38 85
34
13 585 53 114
38 82
32
14 610 53 119
38 85
34
15 580 53 113
38 81
32
16 572 53 112
38 80
32
17 578 53 113
38 81
32
18 586 53 114
38 82
32
19 600 53 117
38 84
33
20 575 53 112
38 80
32
21 563 53 110
38 79
31
22 547 53 107
38 77
30
23 477 53 93
36 63
30
24 401 53 78
36 53
25
Totals 11,631 53.0 2,270 37.3 1,607
663
134. The calculated current energy use is 2,270 kWh for a pumped flow of 11,631
m3/d of water, equal to 0.195 kWh, slightly less than the 0.221 kWh actually measured
in October 2012. Lowering the pressure results in 663 kWh/day reduction, equal to
approximately 29% of the calculated current energy use. That is a high percentage, but
it is possible that after lowering the pressure in the way suggested, the influence of
other pumping stations with higher pressure increases. That would be counterproductive
as the energy costs related to water from all other sources are higher than those of
water supplied by the Meat PS. USUG can test the proposed measures for PS Meat and,
if flows decrease at Meat, while those of other stations increase at the same time,
reverse the process. In that case Meat supply zone can be separated from the system to
prevent this from happening.
RETA 7918 Final report Page 52
135. Table 15 below shows the energy that can be saved, based on a flow of 485
m3/h, in monetary terms.
Table 15 PS Meat – possible energy saving
Meat PS kWh/day kWh/year ₮ mio/yr USD/yr
Currently 2,270 828,508 72.9 52,832
Possible 1,607 586,467 51.6 37,398
Saving 663 242,041 21.3 15,434
136. It should be noted that the energy reduction shown above will indeed be a saving
for USUG, and can be tried instantly at no cost. But others, including OSNAAG may
require additional energy to pump the water from the delivery points to the levels they
require.
E. Sum of energy saving at the 4 main distribution PS
137. The sum of energy savings in distribution pumping at the four main production
locations described above in sections A, B, C and D is presented below.
Table 16 Energy saving in distribution pumping at the 4 main pumping stations
Station Current Possible Save
kWh/day ₮ mio/yr USD/yr kWh/day ₮ mio/yr USD/yr %
Upper PS 24,300 780.5 565,598
20,868 670.3 485,711 14.1%
Central 19,462 625.1 452,980
11,449 367.7 266,477 41.2%
Industrial 4,594 147.6 106,937
4,118 132.3 95,844 10.4%
Meat PS 2,270 72.9 52,832
1,607 51.6 37,398 29.2%
Total 50,626 1,626.1 1,178,348 38,042 1,221.9 885,430 24.9%
Possible saving 12,585 404.2 292,918 24.9%
F. The combination Central-Upper can save more energy
138. More energy saving can be achieved at Central and Upper combined by lowering
the supply for Upper PS, by reducing its supply area and, at the same time enlarging the
supply zone for the Central PS, where significant energy can be saved. An adjustment of
1,000 m3/h is proposed. This would reduce the Upper supply from an average 2,200
m3/h to an average of 1,200 m3/h (varying between 1,100-1,350 m3/h) and increase the
flows at Central from 3,200 to 4,200 m3/h. With a Central well capacity of 4,750 m3/h
such a supply should be no problem. How to handle the proposed new supply flows at
Upper and Central PS is described in the following paragraphs.
139. The current water supply areas of pumping stations Central (in yellow) and Upper
Source (in red) are shown in Figure 18, together with the proposed re-sized supply
areas. The dotted orange line marks the boundaries of high elevation areas.
RETA 7918 Final report Page 53
Figure 18 Areas supplied from Central PS and Upper Source
140. In the proposed situation, only the high located areas (red) will be supplied with
the reduced flow from Upper Source. The elevation of the X-reservoir is high enough and
provides sufficient pressure to supply these high elevation areas by gravity. The low
elevation area on the East, previously supplied from the X-reservoir, will now be
supplied by the Central PS. This will increase flow from the Central PS with the 1,000
m3/h mentioned above.
141. The current and proposed energy consumption for the combined Central-Upper
sources is presented in the table below. The calculation was made using flow data for
each of the 24 hours in the day but, in order to minimize the tables, only the summary
values are shown. It should be noted that, in order to pump the lower quantity from the
Upper PS, a switch would be made from the large pumps to the small pumps. Their
working point is 950 m3/h against a head of 140 m, but they can well pump the larger
quantities required.
Table 17 Energy saving at combined PS Central/PS Upper source
PS Large pumps Small pumps Total
m3/d H (m) P (kW)
m3/d H (m) P (kW)
m3/d kWh/d
Current: Central 59,217 90.5 18,332
5,011 55.4 1,130
64,228 19,462
Upper 52,901 135 24,300
0
0
52,901 24,300
Total 112,118 42,632
5,011 1,130
117,129 43,762
Proposed: Central 83,217 51.7 14,548
5,011 51.0 1,098
88,228 15,646
Upper 0
0
28,901 131 13,217
28,901 13,217
Total 83,217 14,548 33,912 14,315 117,129 28,863
Saving 14,899
Upper source
Central PS
Current Proposed
RETA 7918 Final report Page 54
142. The energy saving of 14,899 kWh/day is considerable and would be as much as
34% for the two pumping stations combined. The annual saving in energy costs for the
four distribution pumping stations would increase from the previous USD 292,918 (see
section V.E above) to USD 373,315 (see table below).
Table 18 Energy saving all four PS for a combi Central & Upper
Station Current Possible Saving
kWh/day ₮ mio/yr USD/yr kWh/day ₮ mio/yr USD/yr %
Central 43,762 1,406 1,018,578
28,863 927.1 671,791 34.0%
Upper Industrial 4,594 147.6 106,937
4,118 132.3 95,844 10.4%
Meat PS 2,270 72.9 52,832
1,607 51.6 37,398 29.2%
Total 50,626 1,626.1 1,178,348 34,587 1,110.9 805,033 31.7%
Possible saving 16,039 515.2 373,315 31.7%
G. Energy savings at the distribution booster pumps in UB
143. Energy savings in booster pumping stations will be much less than the savings
described above for the main distribution pumps at the four water production locations.
Once applied, fine-tuning of pumping pressure set points at booster stations may result
in some additional energy saving.
H. Energy savings at the deep well pumps in UB
144. Deep well pumps pump with an almost constant head with slight variations
depending on the draw-down in the wells. Energy savings, like those described above for
distribution pumps, are not possible, therefore. However, if the above proposals will be
applied, NRW is likely to become less as a result of lowered distribution network
pressures. That will provide lower flows, thus lower energy requirements at the deep
well pumps and at the distribution pumps.
I. Implementation of energy savings proposals
145. Depending on the options selected, large amounts of energy can be saved and
USUG is keen to implement some of the options. Lowering pressure set points at
Industrial and Meat (options C and D) is not controversial and will be implemented by
USUG in the near future.
146. Option A, changes at Upper Source, is a little more controversial: USUG has
indicated that Upper PS was renovated under a JICA grant a few years ago and changing
the pumps so soon would not be feasible. However, after several discussions on this
matter USUG agreed to change the impeller at one of the large pumps, as proposed in
this report. The measure is relatively safe: If more flow would be required, USUG could
at any time re-install the old impeller.
147. Option B, energy saving at Central is favored by USUG, but by adding frequency
controllers, not by changing the pumps as was proposed originally. Because of new
developments in the technology this would now be possible, while only a few years ago
USUG had a bad experience with similar frequency controllers at the CWWTP. The costs
RETA 7918 Final report Page 55
are a multiple of the estimated costs for the replacement of one pump and the current
proposal cannot be financed from the grant. However, USUG has agreed to finance
frequency converters for Central from a future ADB-loan or from its annual budget.
148. Thus, the summary option E (A+B+C+D) is acceptable to USUG and will be
implemented over time, in stages. However, energy saving option F, with highest energy
saving benefit, requires a re-structuring of the distribution network and lowering the
flows from Upper PS. The issues are very important to USUG and it has objected to this
option as:
• There is fear that, during the winter time, the reduced flow through the transmission
pipes from Upper Source to the X-reservoir would cause a freezing of the water in
the pipes and, thus, damage to the pipes. Such concerns should not be taken lightly.
It is understood that USUG would not mind testing this option during the summer
months, but that changing the pumping during the winter is out of the question;
• Increasing abstractions from the Central wells would be unacceptable and result in
larger drawdowns that would encourage replenishment of the well fields with more
polluted city water. USUG has indicated that not only does it want to maintain the
flows from Upper, but that new well fields will be developed in the future.
RETA 7918 Final report Page 56
VI. Water Supply - Operational improvements
A. Introduction
149. One of the goals of this project is to upgrade and improve the operational control
of the water distribution scheme, leading to a reduction of energy consumption and an
improved service delivery to USUG’s customers. Measures proposed to improve
operational control of the UB water supply are described in this section. The operational
improvement under this feasibility study involves two main activities, as follows:
Activity 1: Installation of Equipment for Operational Control
Activity 2: Operational Control Centre
Figure 19 Proposed asset control scheme by the Operational Control Centre (OCC)
150. The future, targeted situation is displayed in the above Figure 19: all assets are
monitored and controlled by USUG from the Operational Control Centre (OCC) that is
located in USUG’s headquarters. This OCC maintains an accurate and up-to-date
overview of the performance of the supply scheme, and is capable of adjusting the
operations as required (e.g. in case of an emergency). The main task of this OCC is to
control and optimize the water distribution processes (in terms of flow, pressure and
energy) and to ensure constant and reliable water services delivery to the customers.
Operational control and data acquisition systems (SCADA) for various assets will be
installed, including pumping stations, reservoirs, booster stations. Furthermore, control
valves and monitoring/measurement devices in the distribution network will be installed
to regulate the flow and pressure. Finally, communication means for data exchange
between the field and the Operational Control Centre will be established.
RETA 7918 Final report Page 57
B. Activity 1: Equipment for Operational Control
151. Equipment standards for operational control of USUG´s assets are lacking.
USUG’s six pumping stations (Meat station, Industrial station, Upper station and Central
station, Bayangol station and Nisekh station) are operated by utilizing various types of
equipment, often installed by a variety of donors-projects, with different functionalities
and specifications. The equipment is not always functioning satisfactory and often not
mutually compatible. Furthermore, monitoring data about pressure, flow and energy
consumption, which are needed for daily adjustments in the operations, are partly
lacking for both the pumping stations, as well as in the water distribution network,
reservoirs and booster stations. Where data is available, it is often not for improvement
purposes of the water supply scheme. Due to the lack of standardized, automated
operating systems and monitoring routines, room exists for USUG to increase the
efficiency of operations of assets in terms of flow, pressure and energy consumption.
152. One of the objectives of this project is improve the data storage for the pumping
stations and other assets in the OCC database giving staff of the OCC access to this data
for analyzing. By upgrading the SCADA system on the pumping stations and introducing
better telemetry system between the pumping stations and other assets and the OCC
data will automatically be stored in the database system of the OCC. Also the technical
conditions of the ICT equipment is in need of improvement, this is also in het scope of
this project.
153. USUG and VEI have made an inventory of the needs and requirements for each
of the locations and assets to be upgraded. The activities to be implemented and the
equipment that needs to be changed at each location is outlined in Table 19 and Table
20 below; the tables provide an overview of the current status of each of the assets, as
well as the proposed activities to improve the operational control of each asset. A more
extensive overview of equipment per location is included in Appendix 1 Proposed
Improvements – water supply.
RETA 7918 Final report Page 58
Figure 20 Overview of USUG’s assets
It has to be noted that priority is given to the most important assets, in terms of
functionality. Several assets are functioning more or less satisfactory (the green
coloured assets in Figure 20); what remains at these well-functioning assets is the
establishment of a connection with the Operational Control Centre.
Table 19 Proposed activities per location (Pumping stations).
Pumping
station
Current Situation Proposed Activity
Upper Source Well-functioning station;
Connection with Operational Control
Centre not available.
Establish two way communication between
Upper source and Operational control
centre by means of a satellite connection.
Central Source SCADA/telemetry available
(Installation of operational control
system and all communication
means was covered by World Bank
funded UBSIP project);
No SCADA action required.
Energy saving possibilities!
Industrial
station
Operational control system SCADA
and telemetry not available, PLC not
functioning;
No connection with Central Control
Installation of operational control system
and telemetry;
Installation of frequency controlled pumps;
RETA 7918 Final report Page 59
Pumping
station
Current Situation Proposed Activity
Centre;
Old pumps without pressure control;
Submersible pumps not functioning
well;
No measurement/monitoring
equipment;
Chlorine dosing system not safe and
out of order.
Installation of 16 submersible pumps;
Communication means;
Installation of measurement equipment
(flow, pressure, reservoir level);
Installation of automated chlorine dosing;
Connection with Operational Control
Centre.
Meat Complex
Station
Operational control system
functioning locally and satisfactory;
No connection with Central Control
Centre;
Communication between extraction
wells and pumping station is
missing.
Installation of telemetry and
communication means between pumping
station and Operational Control Centre;
Installation of communication between
extraction wells and pumping station;
Connection with Operational Control
Centre.
Bayangol
Station
Operational control system
functioning locally and satisfactory;
No connection with Central Control
Centre.
No action required, except for connection
with Operational Control Centre.
Nisekh station Operational control system not
available;
No connection with Central Control
Centre.
Installation of PLC, SCADA and telemetry
system;
Installation of measurement/ monitoring
devices for flow, pressure and reservoir
level.
Table 20 Proposed activities per location (Reservoirs/booster stations). Reservoir/
Booster Current Situation Proposed Activity
Tolgoit booster
station
Operational control system not
available;
No connection with Operational
Control Centre.
Installation of PLC and telemetry system
to connect to the Operational Control
Centre.
Sharkhad reservoir
and booster station
Operational control system not
available;
No connection with Operational
Control Centre.
Installation of measurement equipment for
flow, pressure and reservoir level;
Installation of PLC and telemetry system
to connect to the OCC.
Taskhan reservoir
and booster station
Working satisfactory;
Connection with Operational
Control Centre is available.
No further action required.
West reservoir and
booster station
Working satisfactory;
Connection with Operational
Control Centre is available.
No further action required.
RETA 7918 Final report Page 60
Reservoir/
Booster Current Situation Proposed Activity
Toirgiin booster
station
Working satisfactory;
No connection with Operational
Control Centre.
No further action required.
X-reservoir Working satisfactory;
Connection with Operational
Control Centre is available.
No further action required.
North-east reservoir Working satisfactory;
Connection with Operational
Control Centre is available.
Reconstruction of two communication with
OCC will be carried out.
Chingeltei booster
station
Working satisfactory;
No connection with Operational
Control Centre.
No further action required, except for
connection with Operational Control
Centre.
3rd – 4rd district
reservoir
Working satisfactory;
Connection with Operational
Control Centre is available.
No further action required.
Table 21 Proposed activities per location (Distribution and USUG’s head office)
Location Current Situation Proposed Activity
Distribution Network
Ulaanbaatar –
various locations
Flow and pressure control
valves missing to regulate flow;
Not enough monitoring points
(pressure, flow) available.
Installation of 20 control valves in the
network for pressure and flow control;
Construction of 10 measuring points in the
network;
Reconstruction of 10 existing measuring
points in the network.
USUG’s
Headquarters and
OCC
Operational Control Centre is
not yet fully functional and
equipped.
Installation of operational control
equipment: telemetry, servers, computers,
software.
C. Activity 2: Operational Control Centre
154. VEI assisted USUG in the establishment of an Operational Control Centre (OCC)
and coaching of this center’s staff. The OCC, a new department in USUG established in
2010, is made responsible for overall management and control of USUG’s integrated
water supply network. The main tasks of the OCC are:
i. Daily monitoring and evaluation of water supply and distribution in
Ulaanbaatar;
ii. Adjustments of operations as required (e.g. emergencies);
iii. Data collection, database validation and database management;
iv. Management reporting on performance indicators;
v. Analysis of water balances and non-revenue water (NRW);
vi. Preparation of demand-forecasts and future production/distribution plans;
RETA 7918 Final report Page 61
vii. Designing further improvement/optimization measures for the operational
control of assets;
viii. Calculation of set points for pumping stations and flow regulating valves;
ix. Development of contingency plans for failing pumping stations and
transportation mains;
x. Epanet modeling and scenario development for network extensions.
155. VEI identified the need to establish such a center when it became apparent that
USUG was not operating its assets efficiently, that monitoring data were missing and
that there was no department that could be held accountable for the overall
management and control of USUG’s supply schemes.
156. During the past Water Operation Partnership, VEI has advised USUG regarding
the establishment of this center. Now the network and pumping stations are being
upgraded Training and coaching of USUG´s staff can be provided by experienced
operators from Vitens and Evides introducing the skills required for adequate and
sustainable operations.
157. In October 2012, VEI organized a workshop with all staff of the OCC and
engineering department employees present. During this workshop the aspects of the
tasks were discussed, a presentation was given. Also the future possibilities for the
network were discussed and from sample scenarios further improvement of the network
and pumping station set points were discussed. Also a strategy for further optimization
of USUG’s water supply scheme was discussed and optimization cycles were introduced
(see Figure 21). The OCC will take USUG through these optimization cycles.
Figure 21 Strategy for further optimization of USUG’s
water supply scheme.
RETA 7918 Final report Page 62
VII. Wastewater Treatment Operational improvements
A. Introduction
158. This section describes the operational improvements proposed for the Central
Wastewater Treatment Plant (CWWTP) of Ulaanbaatar. For a better understanding, short
descriptions are presented on the existing situation with regard to the sewerage and
other wastewater treatment plants facilities in Ulaanbaatar.
B. Sewerage
i. Short description of the sewerage
159. The sewerage of Ulaanbaatar consists of the central core system, with a total
length of approximately 136 km, and four smaller local systems of sewers with a total
length of ~10.4 km. The core system is a separate system, which conveys domestic and
industrial wastewater to the wastewater treatment plant, but not storm water. Small
amounts of groundwater tend to infiltrate the sewers, adding a little to the flows.
160. All wastewater in the core system reaches the Central Wastewater Treatment
Plant (CWWTP), located 17 km to the west of the city center, by gravity and there are
no wastewater pumping stations in the city. The core system consists of two primary
sewers, the “Central” and “Southern” sewers, which run in an East-West direction
towards the CWWTP. Just before they reach the CWWTP these two primary sewers are
interconnected, which helps to balance the capacities of the sewers and of the two
influent pumping stations at the CWWTP. Basic data of the core system are presented in
the table below.
Table 22 Lengths of sewers in the Core System of Ulaanbaatar
Type Diameter Central Southern
(mm) Length (km) Length (km)
Primary sewers 500-1400 20 21
Secondary sewers 150-500 71 24
Total 91 45
161. The largest conduits (> 800 mm diameter) are made of reinforced concrete.
Small sewer pipes are made of vitrified clay, asbestos cement and cast iron. The Central
system was constructed in 1963 and renovated in 1970. The Southern system was
completed in 1980. Although the sewers are generally assessed to be of good quality,
groundwater infiltrates the sewers, especially those running along the Tuul and the
Selbe rivers. USUG carries out regular cleaning of the sewers, especially to remove solid
waste that enters through manholes with their covers missing. Since 2004, USUG also
carries out CCTV inspections of the sewers.
RETA 7918 Final report Page 63
ii. Flows through the sewerage and pollution loads
162. Incoming flows are measured in real time with electromagnetic flow meters at the
influent pumping stations of the CWWTP. These flows are well recorded and the CWWTP
has used them to show trends in wastewater flow development. COD-concentrations are
measured on a daily basis through grab samples. The concentrations determined on the
basis of these grab samples are used to calculate the daily pollution loads arriving at the
CWWTP. Occasionally, also BOD-concentrations are determined. As the sample volumes
taken are not proportional to the incoming flows, and as flows vary considerably over
the day, the COD/BOD-loads reported, may not always be representative for the
pollution loads that arrive in reality. They provide a good indication, however.
163. At the CWWTP, wastewater quantities are routinely compared with the amount of
drinking water that USUG abstracts from its well fields. Generally, wastewater flows are
below the amount of water abstracted from the wells during the first half of each year.
But in the second half of the year, wastewater flows exceed the abstractions of water by
USUG (see chart below for a 12-year average). There is, of course, a relationship
between water supplied and wastewater generated. The chart below does give some
indication, but is not so accurate: not all water from the wells reaches USUG’s customers
(NRW is over 18%, much of it presumably leakage) and a portion of the water actually
used does not end up in sewers because there may be none nearby, because of
evaporation and some is used for car washing or watering plants. On the other hand,
many industries, and presumably some individuals, abstract water from their private
wells adding to the wastewater flows. Furthermore, flows could increase from accidental
connections to the sewers of storm water fixtures and from infiltration of groundwater.
Figure 22 Water abstractions by USUG and wastewater flows at CWWTP.
164. While there are many unknowns, this report has made an attempt to quantify
wastewater flows from the other end, based on water sales by USUG and estimates of
private wells abstractions. Similarly, an estimate was made of COD-loads, based among
RETA 7918 Final report Page 64
others on COD emissions by the top-140 industrial polluters (see also xii.C of this
report) and others. The results are summarized in the table below. It should be noted
that these are very much estimates and that some of them may be somewhat
“speculative”.
Table 23 Relation between water supply and wastewater produced
(Data of 2011, volumes in M m3/yr)
Description Total Domestic Industries
Mm3/yr
& non-industrial
total top-140 small
USUG water supply 42.99 40.37 2.62 0.84 1.79
From private wells 14.40 13.73 0.68 0.22 0.46
Total water supply 57.39 54.09 3.30 1.05 2.25
Percentage to wastewater 90% 90% 86% 77% 90%
Volumes of wastewater 51.51 48.68 2.83 0.80 2.02
COD mg/l 800 700 2,530 6,882 800
ton/yr 41,234 34,079 7,155 5,536 1,619
% 100.0% 82.6% 17.4% 13.4% 3.9%
165. The table shows that water supply to industries, including supplies from private
wells, makes up only 3.30 out of an estimated 57.39 Mm3/yr, or less than 6% of the
total. But because of the kind of wastewater discharged by industries, their pollution
(measured as COD) accounts for 17.4% of the total pollution load transported through
the sewers to the Central Wastewater Treatment Plant (CWWTP). Taking into account
other pollutants, like Chromium from Tanneries, would increase the percentage further.
166. Based on the table above, the flow to the treatment plant could thus be
summarized as 51.51 Mm3/yr in 2011, with a COD-load of just over 41,000 tonnes/year.
This translates to an average flow of ~142,000 m3/d, with a COD of approximately 800
mg/l, or 113,000 kg/day. Actual wastewater inflows vary per month and per day. A
variation of the flows in 2011 is shown in the chart below. The lowest (blue) line is the
wastewater flow estimated using USUG’s water supply pumping data and making
assumptions on water use through private boreholes as shown in the table above. The
higher (red) line shows the actual inflow to the treatment plant. The difference can be
explained by the fact that during the warmer months of the year, the underground frost
is diminishing, allowing some groundwater to trickle into the sewers through imperfect
joints. This adds ~25,000 m3/d, or ~17.5%, to the incoming wastewater flow at the
treatment plant during the second half of each year. The maximum flow to the CWWTP
thus reached ~165,000 m3/d in October 2011. These peak flows create problems at the
CWWTP, as they cause an overloading of the secondary clarifiers.
RETA 7918 Final report Page 65
Figure 23 Inflows to the Central Wastewater Treatment Plant (CWWTP)
167. COD measurements of the influents at the CWWTP confirm the COD of the
wastewater with generally an average of approximately 800 mg/l (see Figure 24 below).
However, occasionally, wastewater flows have a much higher COD, up to 3,600 mg/l.
High COD values occurred during January and part of February, in early April and two
extreme COD peaks occurred in June 2011. Industrial discharges are blamed for the
sudden peaks in COD.
Figure 24 COD concentrations of inflows to the CWWTP
168. Combining the COD-concentrations from grab samples and the measured flows of
incoming water at the CWWTP, COD-loads were calculated to verify if they were
comparable with the estimated average value of 113,000 kg/day shown above. It turns
out that average incoming COD-loads in 2011 were 10% higher than estimated above,
at ~125,000 kg/day. The chart below shows COD-load fluctuations over the year 2011.
It should be noted that the COD-loads are based on grab samples taken once a day only
and that the values thus found may not be representative for the actual COD-loads
arriving daily at the CWWTP. Average COD-loads vary between 120,000 and 150,000
kg/d, with the higher values occurring during the winter months. It is striking that on
100,000
110,000
120,000
130,000
140,000
150,000
160,000
170,000
Jan
Feb
Mar
Ap
r
May Jun
Jul
Au
g
Sep
Oct
No
v
De
c
Infl
ow
in m
3/d
(m
on
thly
ave
rage
)Influent (m3/d) to CWWTP in 2011
Total, incl infiltration
Wastewater
500
1000
1500
2000
1-Jan 31-Jan 2-Mar 2-Apr 2-May 2-Jun 2-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 31-Dec
mg/l CWWTP - influent COD-data 2011
RETA 7918 Final report Page 66
some days extreme COD-loads arrive at the CWWTP, up to 450,000 kg/d, or 3.6 x the
normal daily load. Although any treatment plant has some buffering capacity, such loads
are hard to handle at the CWWTP. It seems to be unknown which industries cause the
extreme pollution. It is, in fact, hard to imagine that even a very large industry, like a
distillery or brewery, could have such an impact on the incoming COD-loads, considering
that all industries combined account for less than 17.5% of total COD-loads13.
Figure 25 COD loads of inflows to the CWWTP, 2011
169. COD-loads increase during the winter months, from an average 125,000 to
~150,000 kg of COD per day. This may have something to do with the tannery high
season, which runs from mid-November to approximately mid-March of each year when
more hides are available than during the remainder of the year. Tannery waste should
be pre-treated at the Khargia treatment plant, a private treatment plant especially
established for that purpose. It is understood that this plant does not always function
very well. During a visit in October 2012, the plant was not in a very good state, but
appeared to be operational. The plant collects wastewater in a storage tank and starts
treating operations once the tank is full. As a result of this batch type operation, high
pollution loads are discharged to the sewers during a relatively short time. It would be
worth discussing operation methods with the Khargia management and verify if a more
regular discharge, or a batch discharge at night when other wastewater flows are less,
would be feasible. Also other large industries may discharge their wastewater in batches.
170. BOD is a better measure for the pollution loads arriving at the treatment plant,
but determining BOD is more complicated and takes more time. For these reasons, BOD
tests are conducted less frequently at the CWWTP. The data over 2011 show a different
picture, with peaks in pollution loads much less pronounced (see chart below).
Generally, BOD is in a “reasonable” range, between 300 and 380 mg/l, but with peaks
up to ~530 mg/l. The COD/BOD-ratio is approximately 800/320 = 2.5, not an
unreasonable figure. On an average day a BOD-load of about 53,000 kg can be expected
(see second chart below), only in December, the trend is upward. Incoming BOD-loads
vary between 35,000 and 80,000 kg of BOD per day.
13It would be well worth checking the sampling methods and testing equipment to exclude the possibilities that reported values were not representative, or plainly wrong.
50,000100,000150,000200,000250,000300,000350,000400,000450,000
1-Jan 31-Jan 2-Mar 2-Apr 2-May 2-Jun 2-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 31-Dec
kg/d CWWTP - influent COD-loads in 2011
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Figure 26 BOD concentrations of inflows to the CWWTP
Figure 27 BOD loads of inflows to the CWWTP
171. A large JICA-supported team studies USUG’s water supply and wastewater
operations in the framework of a water supply/wastewater master plan preparation.
Without much of a base, the team has assumed that the portion of industrial wastewater
in the flows arriving at the CWWTP is much higher than estimated above.
Table 24 CWWTP - Estimated flows and pollution loads
Type of Converted from table above Estimates by JICA-team
wastew. Flow (m3/d)
COD (kg/d
Flow (m3/d)
COD (kg/d
Domestic 133,370 95%
93,367 83%
116,250 84%
33,701 22%
Industrial 7,753 5%
19,603 17%
22,250 16%
120,963 78%
Total 141,123 100% 112,970 100% 138,500 100% 154,664 100%
172. While flows are not so different, the JICA-study has attributed much more of the
wastewater flows to industries and have assumed much higher industrial COD-
concentrations than were shown in Table 24 above. While we have not found evidence of
such high industrial flows and pollution loads, and the data available at USUG point in a
different direction, the JICA estimate would explain the large fluctuations in COD-load
arriving at the treatment plant. Extreme fluctuations are unusual for domestic
wastewater, but could well occur as a result of irregular industrial wastewater
discharges. The truth will probably be somewhere in between the two estimates.
200
300
400
500
1-Jan 31-Jan 2-Mar 2-Apr 2-May 2-Jun 2-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 31-Dec
mg/l CWWTP - influent: BOD-data 2011
0
20,000
40,000
60,000
80,000
1-Jan 31-Jan 2-Mar 2-Apr 2-May 2-Jun 2-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 31-Dec
kg/d CWWTP - influent: BOD-loads 2011
RETA 7918 Final report Page 68
C. Wastewater treatment facilities in Ulaanbaatar
173. Besides the large CWWTP, USUG owns and operates other, smaller, treatment
plants. This report deals only with operational improvements of the CWWTP. In addition,
the privately owned Khargia plant was designed to pre-treat wastewaters from the
tanneries in Ulaanbaatar before discharging them to the USUG sewer. More information
on the Khargia plant will be provided in paragraph 230 of this report.
Table 25 Treatment plants and their hydraulic capacities
Name of WWTP Hydraulic capacity
(m3/d)
Central WWTP 160,000
Airport/Nisekh 2,600
Bahaghangai 250
Bayangol/Nairamdal 450
Dambadarjaar 90
Biokombinat 400
Khargia (pre-treatment) 13,000
D. The Central Wastewater Treatment Plant (CWWTP)
i. Introduction
174. The central wastewater plant was built in several stages. The first stage was
completed in 1964, and consisted of a mechanical pre-treatment followed by ground
infiltration. In 1968, a lifting station and mechanical treatment for the Central Sewer
was added and a primary treatment stage was built. Biological treatment was
implemented in two stages: in 1978, a Russian company designed and built the first
stage (three basins); the second one (two basins) was built in 1987 by a Mongolian
company, on the basis of the same design as the first ones. Some parts of the plant
have been built or partially built but were never put into service, for lack of funds, at the
end of the 80’s: sludge anaerobic digesters, stabilization ponds. Recently, part of the
equipment was renewed through a Spanish loan, but several pumps have become
obsolete already and the SCADA system has broken down.
175. The process on this wastewater treatment plant is a very conventional one, using
simple straightforward technologies. The plant comprises of coarse screening, raw water
pumping, fine screening, grit chamber, primary settling (4), aeration tanks (5),
secondary clarifiers (5), sludge drying beds. The effluent is bacteriologically improved
through UV-treatment. There are large bio-ponds on the treatment grounds but they are
not used at the moment. The main units of the plant are presented in the satellite photo
below.
RETA 7918 Final report Page 69
Figure 28 Layout of the Central Wastewater Treatment Plant (CWWTP)
176. A simplified schematic of the CWWTP is
shown in the diagram. Also shown are locations
where samples are taken for testing on COD,
BOD and Suspended Solids.
Figure 29 CWWTP-schematic
RETA 7918 Final report Page 70
177. Figure 23 showed that in 2011 the inflow in the second half of the year was about
20,000 m3/d higher than in the first half. This trend can be observed every year, as
shown in a chart of average monthly flows over the years 2000-2012.
Figure 30 CWWTP: Inflow over the year (12-year average)
178. The inflow at the plant does not only vary each month, but also during the day,
as shown in the chart below. With an average flow shown as 6,100 m3/h, inflows are
considerably lower in the night (after 01h00) and the morning. By around 10h00 each
day inflows start increasing until ~7,000 m3/h and remain like that for the rest of the
day.
Figure 31 CWWTP: Inflow over the day (12-year average)
ii. Performance of the CWWTP
179. Opinions regarding the overall treatment performance of the CWWTP vary. Most
descriptions by experts were rather negative and bad smell was reported during almost
RETA 7918 Final report Page 71
every previous visit by VEI experts. However, somewhat to our surprise, the
performance of the CWWTP was not bad at all, during our visits in September/October
2012. Apart from the building that houses the fine screens, smell at all units of the plant
was acceptable and some performance data showed good treatment efficiency. It is
suspected (and calculations tend to confirm this) that the good performance is
connected with the practice of limiting the flow towards the biological section of the
treatment plant. With the limited flow, the biological part of the plant performs rather
well, certainly considering the age of the plant and the imperfections under which it has
to operate. The excess water not treated biologically only receives a mechanical
treatment is then discharged into the CWWTP’s effluent pipelines, through a bypass pipe
shown in Figure 29 above.
180. With the quality of the incoming water varying so much, it may be expected that
treatment results are not so stable, as well. The chart below shows the influent COD of
2011, together with the COD of the effluent measured just after the secondary clarifiers.
Figure 32 CWWTP: COD of influent and effluent, 2011
Generally, the COD of the effluent is in the 150 mg/l range, but on many occasions,
something goes wrong and the COD-concentration shoots up, sometimes to as high as
500 mg/l. This reflects in the COD-removal efficiencies of the plant, which shows large
variations. Ignoring the extremes shows that overall, the plant is not doing too badly,
with COD-removal rates hovering in the 80% range (see chart below).
Figure 33 CWWTP: COD-removal efficiencies in 2011
0
500
1000
1500
2000
1-Jan 31-Jan 2-Mar 2-Apr 2-May 2-Jun 2-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 31-Dec
mg/lCWWTP - COD-data 2011
Influent
Effluent
0%
20%
40%
60%
80%
100%
1-Jan 31-Jan 2-Mar 2-Apr 2-May 2-Jun 2-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec 31-Dec
CWWTP - COD-removal efficiency 2011
RETA 7918 Final report Page 72
181. Patterns of influent strength and COD-removal became quite different in the first
9 months of 2012. COD-concentrations were reasonably low during the first months of
2012 but started going up gradually in March and reached values over 1,000 mg/l in
May (see chart below). In April, the CWWTP started experiencing difficulties. Effluent
quality had been good until then, but started quickly going up in April when values of
500 mg/l were reached. Sampling of effluent then stopped for 2 months, but it is
understood that during this time, effluent quality was bad. On 12th July, it was decided
to limit flows to the aeration tanks, to protect the biological process, as well as the
sedimentation in the clarifiers. Hence part of the influent was redirected and was not
treated. This quickly yielded results in the biological parts of the CWWTP and the effluent
standard improved by the day, until reaching values of less than 150 mg/l in September.
Figure 34 CWWTP: COD-concentrations of influent and effluent in 2012
182. In the period May-July, the incoming COD-load at the CWWTP doubled from the
usual 100-115,000 kg/d for this period to an average of 200,000 kg/d in early July, with
many days of much higher loads arriving (see chart below). It is not clear how the
COD-load could double in such a short period. The industries are widely blamed but, as
mentioned before, most of the wastewater loads arriving at the treatment are still
domestic. If only the industry were to blame for the doubling in COD-load, COD-
concentrations of industrial discharges should have become an unlikely 6.5 x as high as
usual (flows hardly changed between May and July). One would almost suspect that a
new and heavy polluting industry, not recorded by USUG and unknown to many others,
had started discharging very concentrated wastewater to the sewers. Another mystery is
the extreme variation in pollution load that started already in mid-March.
0
500
1000
1500
1-Jan 31-Jan 2-Mar 1-Apr 2-May 1-Jun 2-Jul 1-Aug 1-Sep 1-Oct
mg/l COD at CWWTP -2012
Influent
Effluent
RETA 7918 Final report Page 73
Figure 35 CWWTP: COD-loads of incoming wastewater in 2012
183. The COD-removal efficiency has fluctuated between extremes, in 2012 (see the
chart below). At times, removal of COD was 90% or more, but during the summer
months, when the high CO-loads started arriving, efficiencies all but collapsed, only to
recover when part of the wastewater was getting bypassed.
Figure 36 CWWTP: COD-removal efficiency in 2012
184. BOD-data were determined less frequently and only scarce data are available.
But in August and September, when the biological part of the treatment functioned well,
BOD-removal efficiency in the plant reached an average of 94%.
Incoming COD-loads at CWWTP -2012
0
50,000
100,000
150,000
200,000
250,000
300,000
1-Jan 31-Jan 2-Mar 1-Apr 2-May 1-Jun 2-Jul 1-Aug 1-Sep 1-Oct 1-Nov
kg/d
40%
50%
60%
70%
80%
90%
100%
1-Jan 31-Jan 1-Mar 1-Apr 1-May 1-Jun 1-Jul 31-Jul 31-Aug 30-Sep
COD-removal efficiency of CWWTP - 2012
RETA 7918 Final report Page 74
Table 26 BOD-removal at the CWWTP, 2012
Date Influent14 Primary Effluent Efficiency
1-Aug 338 312 10 97%
2-Aug 322 231 6 98%
6-Aug 293 270 16 94%
7-Aug 306 284 24 92%
8-Aug 671 554 18 97%
9-Aug 346 271 39 89%
15-Aug 316 255 28 91%
16-Aug 529 170 24 95%
3-Sep 208 220 18 91%
4-Sep 639 323 6 99%
Average 397 289 19 94%
Although the secondary section of the plant was running satisfactorily, once again,
overall effluent quality suffered as now fully treated water was mixed with bypassed
wastewater that had only undergone mechanical treatment (coarse and fine mess
screens and primary sedimentation).
E. CWWTP –Review of operations
i. General
185. The CWWTP is already old and close to being obsolete. An entirely new
wastewater treatment plant could/should well be constructed within the next ten years.
Any improvements proposed should improve operations but should not cost too much
money, therefore. Basic improvements that help to overcome some of the deficiencies
during a period of (probably less than) 10 years would be preferred. This warrants the
replacement of mechanical and electrical/electronic equipment, usually with a lifetime of
10-15 years, but not any serious investments in civil works, usually with a lifetime of
30-40 years. Some simple civil improvements may be made, or measures implemented,
as long as investments are relatively small.
186. A quick scan of the CWWTP units shows that the main obstacle to a sturdy
treatment process is the insufficient hydraulic capacity of the 5 secondary clarifiers.
Especially when incoming flows increase, water velocities in the clarifiers are becoming
(too) high and bio-mass, instead of settling to the bottom of the clarifiers, disappears
together with the effluent. When this occurs, not enough bio-mass can be pumped back
and concentrations in the aeration tanks become unacceptably low, hampering the
biological process in these tanks. Adding 2 or 3 clarifiers would hugely improve the
sedimentation process. Additional clarifiers are indeed planned and budget is apparently
available (to the tune of ₮ 1 billion, or ~USD 700,000) for construction of two additional
clarifiers in 2013. Building additional clarifiers would be recommended only if there were
no plans for an entirely new treatment plant.
187. The virtual collapse of the treatment process in mid-2012 (see Figure 36) could
not be blamed on an increased flow, but had to be attributed to increased pollution
concentrations of the incoming wastewater. This indicates that the biological processes
14 Shown are combined values for the two influent stations
RETA 7918 Final report Page 75
in the aeration tanks are not optimal. Under sub-optimal conditions, the sludge starts
bulking, becoming more difficult to settle it in the secondary clarifiers because of its high
sludge volume index (SVI). A number of improvement measures can be taken that
improve the biological processes in the aeration tanks that will help to make the sludge
more “settleable”, thus improving the efficiency of the clarifiers. This will help improving
the overall treatment efficiency and extend the life of the current installation. In fact, all
improvement measures proposed in the sections below aim at making the treatment
process deliver a better sludge quality that causes fewer problems in/with the clarifiers.
In the sections below, only the main treatment units will be identified, notably those that
would affect the operations of the clarifier.
ii. Influent pumping stations
188. Two pumping stations at the CWWTP pump up influent to a higher level, the
domestic pumping station (that pumps ~30% of the total incoming flow, mainly
domestic wastewater but not only) and the industrial station (that pumps the remaining
70%, a mixture of industrial and domestic wastewater). The industrial pumping station
handles approximately 70% of the total incoming flow. The pumping stations are in a
poor state. New pumps installed under a Spanish loan programme less than 5 years ago
burned out soon after their installation and have been removed. The remaining pumps
have sufficient capacity but are very old. It was considered to include 2 new pumps for
the industrial station in the ADB-grant scope. As procedures may take too long and
pumps may give up any time soon, USUG decided that the pump replacement at the
influent station will be made using USUG’s regular maintenance budget.
189. Installing frequency converters for the influent pumps was considered, as well.
Considering the sensitivity of the secondary clarifiers with regard to overload, stabilizing
the flow through the system would have been welcome. In fact, a frequency converter
was installed not long ago, but it failed after only 2 months of operation, for which
unstable 4 kV power supply is blamed making any frequency converter ineffective.
Another reason why a frequency converter is less useful is that total head loss over the
inlet pipes is rather constant. With a higher influent flow in the incoming sewer, the
water level in the inlet sump rises a little. The effect on the pumped flow is minimal,
hardly justifying the expense of a frequency converter.
190. From the industrial pumping station, two pumping mains transport the influent to
the unit that houses the fine screens. In the mornings, when incoming flows are low, the
station operates with one small and one large pump. During afternoons, after ~11h00, 2
large pumps are used. The two pumping mains are interconnected, but a number of
valves keep the pumping separated. It was investigated if opening the valves, resulting
in a joint operation of both pumping mains, would result in a higher flow and/or reduced
energy consumption for the times that a small and a large pump are used. It was
assumed that opening the valves would lead the water to find the most efficient way
towards its destination. A calculation was hampered by the lack of pump data and fictive
Q-H curves were used. The results are shown in the diagram below.
RETA 7918 Final report Page 76
Figure 37 Effect of closed/ open valves - Industrial pumping station
191. The effect of opening the valve (for the pump curves we used) is that total flow
through the two pumping mains would increase from 4,200 to 4,300 m3/h (about 2.5%),
but the pump efficiency of the largest pump would be reduced by some 3%. Considering
the flows, there is some benefit, but energy-wise opening the valve would not help
much.
iii. Mechanical pre-treatment: Screens & Primary Sedimentation
192. The mechanical treatment is functioning well and the screens as well as the four
primary sedimentation tanks could well handle higher flows. It is understood that the
mechanical treatment was laid out for a flow of 230,000 m3/d. Calculations show that
such a flow could well be handled. No operational improvements are foreseen under the
ADB-grant.
iv. The aeration tanks
193. Five parallel aeration tanks, with a total volume of 87,000 m3, receive pre-settled
wastewater from the primary sedimentation tanks. Each tank has 4 legs (see the
schematic drawing below). Air diffusers, which transform air supply to the tanks into fine
bubbles, are installed at the bottom of each tank. Return sludge enters the sludge
regeneration zone in leg 1. Fresh wastewater from the primary settlers enters the
aeration tank in the 2nd leg. The combined flow then continues in the 2nd, 3rd and 4th leg
as a prop flow and leaves for the clarifiers at the end of the 4th leg. It is possible to let
the return sludge regenerate over 2 full legs. If so desired, fresh wastewater flows
through a bypass channel to the back of the aeration tank and enters the tank in the 3rd
leg (as shown by the dotted line). A first calculation shows that the tanks are large
enough to handle the amount of wastewater, also with high COD or BOD concentrations.
However, there have been problems with bulking sludge and a number of improvement
measures are proposed that will help to deal with this phenomenon.
Valve
open
Closed
valve
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Figure 38 Schematic layout of one (out of 5) aeration tanks
194. Aeration takes place in all four legs of the tank. Air blowers produce air under
sufficient pressure which enters the tank through a system of pipes and, critically, air
diffuser units. The air diffusers play an important role and ensure that the air enters as
very small bubbles, to enhance the transfer of oxygen to the active sludge in the tanks.
The existing air diffusers have been in operation for 9 years and are nearing the end of
their life expectancy. Many are expected not to function properly, any longer.
195. For a number of reasons, the aeration tanks do not function as well as tanks in
more modern installations and sludge discharged from the aeration tanks has a very
high sludge volume index (SVI). The higher the SVI, the more difficult the sludge settles
in the clarifiers downstream of the aeration tank. The higher the SVI, the lower the loads
on the clarifiers should be to guarantee that sludge settles to the bottom of the
clarifiers. On occasion, the SVI in the CWWTP is more than double of what is common in
other treatment plants. Sludge with such extreme SVI is called bulking sludge.
196. In a new treatment plant, the same principle would surely not be applied again,
as there are now better ways of biological treatment of wastewater that result in a
better sludge quality and that also include the removal of nitrogen. Nevertheless, some
simple improvements are proposed under the ADB-grant that can improve the aeration
process. An improved process would result in a better sludge that would allow the flows
over the clarifiers to increase without immediately causing an overflow of bulking sludge
from the clarifiers to the effluent drain. The improvements proposed are (i) the
construction of a selector in each of the aeration tanks; (ii) replacement of all air
diffusers in the tanks; (iii) installation of new Dissolved Oxygen meters (DO-meters);
and (iv) repair and improvement of the SCADA-system. Each of these improvements will
be explained in more detail below.
197. (i)Selector: Many treatment plants are now equipped with a so-called selector, a
small basin where new incoming wastewater from the primary sedimentation tanks is
mixed with return sludge from the secondary clarifiers before it enters the aeration tank.
During the 10 minutes of contact time, fresh wastewater and return sludge are
thoroughly mixed. As there is little space available at the CWWTP, it is proposed to use
small part of each of the five aeration tanks and transfer it into a selector, as shown in
Figure 39 below. Building a selector implies that sludge regeneration will no longer be
applied. Return sludge will be fully mixed immediately with fresh wastewater and will
then enter the aeration tanks.
RETA 7918 Final report Page 78
Figure 39 Location of the selector inside an aeration tank
198. The selectors will be built at the South side of the aeration tanks, near the
secondary clarifiers; at the location where currently return sludge enters the tanks (see
Figure 39). Fresh wastewater now enters the tanks on the other side, near the primary
settlers, but it can be taken to the other side through an existing bypass channel. To
enhance mixing, each of the 5 selectors will be divided into 4 compartments in which the
mixture of sludge and fresh pre-settled wastewater zigzag from overflow weir to
overflow weir, before entering the aeration tank (see Figure 40). The selector will reduce
the volume of the aeration tank by ~2%.
Figure 40 Schematic layout of selector in an aeration tank
199. A 90 degree bend will need to be welded on the return sludge pipe of 500 mm
diameter, to bring the sludge to one side of the first selector compartment. Also a new
opening, provided with penstock (gate valve) needs to be made in the headwall of the
tank, to allow for entry of the fresh wastewater into the selector. Velocities in the
selector will be higher than in the aeration tanks. But especially during periods of low
flow, sludge could settle in the selector. For this reason, aeration pipes and diffusers in
RETA 7918 Final report Page 79
this part of the tank will remain. They may be old diffusers, as the size of the air bubble
is unimportant at this location.
200. The separation walls in the tanks will be made using U-profiles bolted to the
walls, into which prefab concrete slabs will be placed. At the bottom slabs, openings
need to be made to allow for the passing of air pipes. These openings will also ensure
that water levels on both sides of the partitions will always be the same, also when
tanks are emptied, to avoid too high a pressure on the concrete slabs.
201. (ii) Air diffusers: The air diffusers that are currently installed are 9 years old
and have been mistreated on occasion with too high air volumes, necessary for the
increasing COD/BOD-loads. As a result, the openings of the diffusers are too large,
causing air bubbles of becoming too large for efficient oxygen transfer.
202. For the oxidation of wastewater, a maximum of 71,000 Nm3/h is currently sent to
the 5 aeration tanks. This implies an air flow of about 14 Nm3/h for each of the 5040 air
diffusers currently installed. Two years ago, some 2,000 small diffusers were added to
spread the air flow over more diffusers, but they have a much smaller capacity. Design
flow of the currently installed air diffusers is 5-9 Nm3/h (allowing higher peak flows of up
to 13 Nm3/h on occasion), so the diffusers have, indeed, been overloaded recently. As
part of the project, all 5,040 existing air diffusers will be removed and replaced by
10,000 new air diffusers. In the bid documents, an alternative option for 6,000 larger air
diffusers will be requested from bidders, as these would be easier, and faster, to install.
This option may also be slightly cheaper. Some extra air piping will be required, as well,
especially near the selectors where oxygen demand is highest and most air will be
needed. A pressure relief valve will be built in each of the air access pipelines to protect
the diffusers from too high pressure.
203. In order to build the selector and install new air diffusers the aeration tanks have
to be taken out of operation. Because there are 5 parallel tanks, one tank can be
emptied at a time, while the remaining tanks will have to absorb a 25% extra flow
during that time. As resuming normal operations is crucial, the time that each tank
should be non-operational should be limited to one week. Installing the selector is fast
and so is the process of replacing the diffusers. Most time consuming is likely to be
making a new opening in the front wall of the tank and installing a penstock. Altogether,
the biological processes will be overloaded during a period of in total 5 weeks, probably
causing bulking sludge. However, with each next tank the situation will improve as more
and more tanks will have a selector in place and new diffusers installed. As the works do
not affect the clarifiers, the sedimentation capacity of the plant, the most critical
process, will not be impaired. If the biological process turns out to suffer badly from an
overload, it could be considered, once again, for some wastewater to bypass the
biological section of the CWWTP and bring the pre-settled wastewater directly to the
effluent line. Providing some form of treatment in the now obsolete bio-ponds could be
considered during that period. The CWWTP-management is not in favour of such a
solution and it has a number of disadvantages. A further discussion on the use of bio-
ponds is presented in section x below.
204. (iii) DO-meters: Twenty DO-meters are currently installed in the aeration tanks.
Unfortunately, the existing meters are not suitable for the application in wastewater and
they have become completely unreliable. As the DO-meters control the amount of air
sent to the air diffusers, their accurate measurement is important. Under the ADB-grant,
20 new DO-meters suitable for use in wastewater and self-cleaning, will be procured.
RETA 7918 Final report Page 80
205. (iv) SCADA: Repairing the existing SCADA is important, especially where it
concerns the control of the processes in the aeration tank. DO in the tanks should be
kept at 2 mg/l, while the SCADA must also ensure that not too much air is directed
towards the diffusers, as this could blow them up and cause a premature enlargement of
the openings of the diffusers. Much of the SCADA is in place already, but it is not
functioning any more, at the moment. New parts will be needed and some new functions
will need to be hooked up to the SCADA. The improved SCADA will also control other
processes at the CWWTP, including proposed sludge level sensors at the secondary
clarifiers.
v. Secondary clarifiers
206. As described before, the 5 secondary clarifiers are struggling to cope with the
sludge that the treatment plant produces. There are plans to add 2 clarifiers in 2013. It
is expected that, with the proposed improvements in the aeration tanks, the quality of
the sludge discharged into the clarifiers will improve, which would allow the velocity
through the tanks to increase. Thus, more wastewater can be treated properly. The
tanks themselves are in good condition and do not require any improvement. However,
as their operation is sensitive and depends on the quality of sludge, it is proposed to
install sludge level sensors in the tanks. Through the improved SCADA, the operators
would be notified timely if sludge levels would become too high.
vi. Sludge return pumps
207. For some time, the procurement of 2 new sludge return pumps was included in
USUG’s wish list for procurement through the ADB-grant. Because of the failure of the
old pumps, USUG had to take immediate action and installed two new (Chinese) pumps.
As these pumps function to the full satisfaction of the plant management, no further
action will be required.
vii. In-line BOD, COD & SS-measurements
208. USUG requested to include equipment in the ADB-grant proposal that could carry
out inline automatic measurements of BOD, COD and SS. Preferred was to install this
equipment at three locations to be able to permanently check the wastewater quality of
the influent, after mechanical treatment and of the effluent. After ample consideration, it
was decided not to include this equipment in the grant project. First of all, the
equipment is expensive and it would have cost ~USD 500,000 to pay for the equipment
at the 3 locations. Moreover, the equipment is complicated and needs intensive
maintenance, using chemicals and spare parts at high frequency. Taking into account
the sensitivity of the operations of the clarifiers, it was considered to install one unit, for
online BOD-measuring, in the effluent line of the clarifiers. However, a heated building
where the unit could be placed was not available, except at the UV-station.
Unfortunately, at this location, the effluent of the clarifiers is mixed with any bypassed
wastewater and a BOD- measurement would not help with the proper operation of the
clarifiers. In the end it was agreed, therefore, to delete inline automatic measurement
altogether.
RETA 7918 Final report Page 81
viii. Output of the proposed improvements
209. Much less than with the proposed improvements for water supply, the output of
the improvements recommended for the CWWTP are less measurable. Biological
processes like those described for the wastewater aeration tanks are much harder to
control and predict than the physical processes that apply to water supply. Main aim of
the improvements is (i) to prevent an early and unexpected breakdown of the CWWTP;
and also (ii) to improve the quality of the biomass/sludge in the aeration tanks in the
expectation that the sludge volume index will improve, making the sludge easier to
settle in the secondary clarifiers which, in turn, would increase their capacity. We would
like to predict as output that, after implementation of the improvements, all wastewater
arriving at the CWWTP could be fully treated and that bypassing a certain portion would
no longer be necessary. However, as there are many factors that influence the biological
processes, including the characteristics of the influent which is well above what is
common, there is no certainty that this will indeed occur.
ix. Sludge digestion and methane production
210. Regarding the pilot on sludge digestion and methane production, Japanese,
Korean and German experts are currently undertaking several studies and analyses. The
Japanese NJS consultants’ team has recently taken a sample for assessment of sludge
digestibility (no results have been received yet). Since other experts’ teams are also
investigating the feasibility of sludge digestion in Mongolia, the RETA will (for this
moment) not primarily look into this matter. However, cooperation and coordination with
the Japanese consultants’ team will need to be maintained.
x. Bio-ponds
211. Early on in its history, the CWWTP was equipped with four parallel lines of bio-
ponds, each consisting of 5 lagoons in series (see picture below).
Figure 41 Bio-ponds at the CWWTP
The total area is huge, almost 600 x 1,000 m2, or 60 ha. The bio-ponds were used in the
past, but they have been idle for a long time now and overflow structures to and from
RETA 7918 Final report Page 82
the lagoons are in serious need of repair. In some of the lagoons sludge was dumped,
but the lagoons could be made operational again with relatively minimal effort.
212. It was investigated if the bio-ponds could be instrumental in reducing the
pollution loads in case some wastewater would be bypassed again, for example during
the rehabilitation of the aeration tanks. Despite the large surface area, the ponds are,
unfortunately, too small to function as facultative lagoons. Because of the low prevailing
water temperatures, biological processes in the pond are not very effective and
discharging serious quantities of pre-settled wastewater with a BOD of ~360 mg/l would
create anaerobic conditions and accompanying smell problems.
213. It is understood that also the CWWTP management is not in favor of using the
ponds in the present conditions. They quote problems with smell and, possibly, flooding
of nearby basements. Plans exist to line the ponds in the (far?) future and install floating
aerators powered by solar panels. Costs are estimated at some USD 5 million. Being out
of the scope of this ADB-grant, this option was not investigated any further.
xi. Overview of proposed improvements for the CWWTP
214. Summarizing the interventions at the CWWTP shows the following operational
improvements:
i. Construction of 5 selectors, one in each of the aeration tanks of the CWWTP;
ii. Procurement of 10,000 new air diffusers, complete with clamps, and additional
air supply piping;
iii. Replacement of 20 existing Dissolved oxygen sensors in the aeration tanks;
iv. Supply and installation of 5 ultrasonic sludge level sensors in secondary settlers.
These new to be installed sensors need to be integrated in the existing SCADA
software
v. The existing SCADA system needs to be repaired and reprogrammed. Some
equipment has to be replaced and the software needs to be checked and
repaired, where necessary;
vi. Supply and installation of a new PC for the SCADA system to be installed in the
CWWTP control room and a second PC with SCADA connection in the head
engineer’s office in the CWWPT. The SCADA system at the CWWTP will be
designed as a local system and will not be connected to the central Operational
Control Centre (OCC).
xii. The future of the CWWTP – Possibilities for investments
215. USUG currently has no clear view on the future of the CWWTP. General opinion
appears to be that the CWWTP can still function for many years to come and also the
JICA-team in charge of strategic planning for water supply and sewerage assume in their
Interim Report 15 (October 2012) that the plant will only need to be replaced by the
year 2040. By that time, the oldest parts of the plant will be 75 years old and the most
essential units, the aeration tanks and the clarifiers, will not be much younger.
216. Taking into account that the current treatment technology used at the plant is
obsolete and creates operational problems time and again, despite several renovations
that took place in the past, it is felt that an entirely new wastewater treatment plant
15 JICA-sponsored “Study on the Strategic Planning for Water supply and Sewerage Sector in Ulaanbaatar City in Mongolia”, Interim Report, October 2012.
RETA 7918 Final report Page 83
should be designed and built in the coming 5-10 years. A preliminary design for such a
plant is outside the scope of this study. It is felt that the treatment system proposed in
the JICA-study, a large number of small oxidation ditches (see Figure 42 below),
although an improvement on the present situation, is not the state of the art technology
that is available nowadays. Recent process technological innovations have resulted in
better and cheaper treatment systems that should be taken full advantage off.
Figure 42 CWWTP - Proposed expansions (source JICA-study team)
217. A new treatment plant should probably have a hydraulic capacity of 200-250,000
m3/day. The amount involved would be in the range USD 200-250 million16. It could
possibly be built with ADB-loan funding, with the plant built in some stages using
subsequent tranches of a loan facility. Of course, additional investments will also be
required for the UB sewerage. It is understood that many of the sewer projects identified
in the 2006 master plan have not yet started while, with the present rapid
developments, additional investments will surely be needed. While sewerage is outside
the scope of this study, reference is made to the strategic plan for water supply and
sewerage that is being prepared by a JICA study team.
16 Source: JICA study team – Interim Report, October 2012.
RETA 7918 Final report Page 84
VIII. Industrial wastewater
A. Introduction
218. Although somewhat outside the scope of this study, RETA has been involved to a
certain extent with quantities and qualities of industrial wastewater. The trigger for this
involvement was USUG’s plan to procure a number of wastewater flow meters, to
measure wastewater quantities at some of UB’s largest polluting industries. While
reviewing current practices at some of the leading industrial polluters and considering
the impact of high pollution concentrations (COD, BOD, etc.) on the treatment efficiency
of the CWWWTP, as well as after the discussions on wastewater fees at USUG, it was
decided to expand this section to include ideas on future wastewater charges.
219. As described in section 0.B.ii of this report, the CWWTP has to cope with an
influent that exceeds the design standards, for which the effluents of industrial activities
in Ulaanbaatar are blamed. Although USUG charges industries for their effluents
discharged, they do not help to reduce waste, as charges are applied to the water the
industries consume, not on the amounts and concentrations of the wastewater
discharged. Thus, industries are not awarded for any efforts to reduce the amount and
strength of their wastewater. The Government has understood this and has adopted a
new Polluter Pay Principle law, in 2011. On the basis of the new law, industries will be
charged for the pollution they cause. Details are being elaborated at the Ministry of
Environment. This section of the report deals with the volumes of industrial wastewater,
the quality (BOD, COD, etc.) of these wastewaters, their effects on the CWWTP’s
influent, proposals for future industrial wastewater fees and, in anticipation of the
application of the new law to introduce genuine pollution charges, a proposal for the
measurement of wastewater flows from the most polluting industries.
B. Industrial water consumption
220. In 2011, USUG supplied 43.0 million m3 (Mm3) to its domestic and industrial
customers. Most of this water (74%) is used for domestic purposes, while the remaining
volumes are used by public companies (schools, hospitals, etc.), by companies
(businesses) and industries. Industries used only a small portion of the water supplied
by USUG, 2.62 Mm3 in 2011, only ~6% of the total supply by USUG. All industries are
metered with individual water meters of which 138 are connected to the central
registration system at the customer department.
221. Besides water supplied by USUG, many companies have private wells from which
they abstract groundwater. Of 140 large polluting companies, USUG monitors not only
the water it supplies, but also their private groundwater abstractions. Judging from
these large industries, groundwater abstractions are not widespread, they add only
~27% to the water consumed. Applying this same percentage to all industrial use would
bring the total industrial water consumption to ~3.33 Mm3 in 2011.
222. The 140 largest polluting industries monitored by USUG used ~1.0 Mm3 of water,
about 30% of total industrial water use, in 2011. The table below shows details on their
2011 water consumption divided over the amounts they procured from USUG and those
they abstracted from their own wells.
RETA 7918 Final report Page 85
Table 27 Top-140 industrial polluters - Water use per type of industry (2011)
Type of industry No. of Water use ('000 m3/year)
factories USUG Wells Total %
Tanneries 27 84.8 8.5 93.4 9.3%
Wool/cashmere 29 44.7 147.3 191.9 19.2%
Intestines cleaning 16 14.8 14.0 28.8 2.9%
Car wash 45 61.2 9.4 70.6 7.1%
Vodka/Beer/Soft drinks 23 589.2 26.1 615.3 61.5%
Total 140 795 205 1,000 100%
The largest water consuming companies in each category were visited during the
project. Details on these companies, their water use and, if possible, an estimate of their
wastewater production, are presented in Appendix 3.
223. By far the largest water users are the breweries, distilleries and manufacturers of
soft drinks, just 23 companies use over 60% of the water consumed by the top-140
polluters.
224. Most companies top-140 only use small amounts of groundwater in comparison
to the water they procure from USUG. The main exceptions are the 29 wool/cashmere
factories, which obtain over 75% of their water from their own wells, and the 16
intestine cleaning companies which abstract almost 50% of their supply from their wells.
225. Most of the industrial top-140 water demand is concentrated in two districts; the
Sorgino Khairkan District and especially the industrial Khan-Uul district in the Southern
part of UB (see the table below).
Table 28 Top-140 industrial polluters – Distribution over the districts (2011)
District District No. of Top 140 water use ('000 m3/year)
name factories USUG Wells Total %
1 Bayanzurkh 22 35.1 7.5 42.6 4.3%
2 Sorgino Khairkan 25 116.8 107.9 224.6 22.5%
3 Bayangol 29 48.0 32.2 80.2 8.0%
4 Sukhbaatar 8 46.1 46.1 4.6%
5 Chingeltei 4 7.1 0.7 7.8 0.8%
6 Khan-Uul 52 541.7 57.0 598.7 59.9%
Total 140 795 205 1,000 100%
C. Industrial wastewater production
226. Of the water used in the production process, generally approximately 80% is
discharged as wastewater. The remainder is used in products, evaporates or is wasted
otherwise. The 80% is a rule of thumb, but there are large variations, depending on the
type of industry, the processes used by the individual factories and the attention paid by
the management to control water use and pollution. This is the main reason why USUG
likes to measure wastewater flows at the factory premises. During the factory visits,
some indication of wastewater discharges by the top-140 industries was obtained. At the
same time, it was verified if continuous effluent measurements (as desired by USUG)
would be feasible at the largest polluters.
RETA 7918 Final report Page 86
227. In this section an attempt is made to estimate industrial wastewater discharges in
volumes and COD-concentrations. However, without detailed pollution scans that take
much more time than available under this project, it is not possible to provide accurate
estimates of the wastewater generated by these industries. The attempt below to
estimate annual wastewater volumes by the top-140 should be treated with reservation,
therefore, and should be used as an indication only.
The COD-concentrations and annual COD-loads presented in the table below are based
on weighted averages per industry branch of COD-concentration samples taken in the
past. It should again be stressed that the industrial COD concentrations and loads are
very tentative.
Table 29 Top-140 polluters – Estimated Wastewater volumes and COD-loads
Type of industry Water use Wastewater COD17
'000 m3/yr '000 m3/yr mg/l kg/yr %
Tanneries 93.4 84.0 13,300 1,117,772 34%
Wool/cashmere 191.9 172.7 2,640 456,044 14%
Intestines cleaning 28.8 25.9 11,600 300,226 9%
Car wash 70.6 63.5 1,000 63,534 2%
Vodka/Beer/Soft drinks 615.3 400.0 3,260 1,303,861 40%
Total 1,000 746 3,241,436 100%
228. The table indicates that 40% of industrial pollution of the top-140, in the form of
COD-loads, would be caused by the distilleries/breweries and soft drink manufacturers.
The companies deny this and state that much of the water they use leaves the premises
as steam and in their product. This is only partly correct: depending on the product,
alcohol distillery, beer or soft drink manufacturing, generally some 60-85% of their
water consumption leaves the factory as wastewater.
229. Tanneries are a close second, but it is good to realize that most of the tannery
wastewater is produced during only a few months per year, during the winter, when
there is an abundance of hides. During those months, from mid-November to mid-
March, the pollution caused by tanneries dominates Ulaanbaatar’s wastewater.
Moreover, tanneries also discharge chromium, with an average concentration of 28 mg/l,
which adds considerably to the pollution they cause. In the remaining months of each
year, production is much less and so is wastewater production.
230. Almost all tanneries do not discharge their wastewater directly to the sewer, but
lead it towards the Khargia pre-treatment plant. Most observers state that the Khargia
plant is not operating properly, or does any good at all for that matter. Samples taken
by USUG confirm the poor performance, with Khargia’s effluent not showing any
improvement on the influent it receives from the individual tanneries. However, a visit
was paid to Khargia in October 2012. A new manager was appointed and the physical-
chemical pre-treatment facilities seemed to be in operational condition. The company
has certainly difficulties, not least of them financial, it also faces losing (or has already
lost) its permit to dump dried sludge at the city landfill.
17 Values are preliminary estimates and should be used with reservation.
RETA 7918 Final report Page 87
It is worthwhile for USUG to intervene and ensure that the company is operating
properly (again). The pre-treatment process is relatively simple, the facilities are in
place and should be used, as such a pre-treatment can cheaply hold back serious
amounts of extreme tannery waste that would otherwise enter the sewer and create
problems at the CWWTP. Any negotiations should also address the batch-type operations
and agree that batch-wise discharges must take place every night before say 04h00, so
that shock loads arrive at the CWWTP during the mornings, when inflows are low, and
can be accommodated more easily.
D. Possible actions to reduce industrial wastewater
231. As the efforts of the CWWTP to treat the incoming influent properly are affected
rather much by the volumes and strengths of industrial wastewater, it is worthwhile for
USUG to try and eliminate at least part of the industrial wastewater flows. Although the
current wastewater charges do not encourage industries to reduce their wastewater
effluents, USUG will soon have the tools, through the new Polluter Pay Principle law, that
will make it easier to convince industries to reduce their wastewater volumes and/or
concentrations.
232. A start should be made with Khargia. This pre-treatment plant for the Tannery
sector of Ulaanbaatar has the potential to seriously reduce tannery waste. With proper
pollution fees, a better performance of Khargia would be of interest to Khargia itself, to
all of the connected tanneries and, of course, for the CWWTP. As stated before, in
discussions with Khargia, not only attention should be paid to a reduction of pollution
loads but also to the time that the batch-operated plant discharges these loads to the
sewer. Discharge at night should require a normal wastewater charge, but for discharges
during the day a sharply increased fee should be charged.
233. As soon as possible, USUG should start making detailed inventories of the largest
industrial polluters, notably those of the vodka/ beer sector, the wool/cashmere sector
and those involved in intestine cleaning. A start was made during this project, but time
spent at each industry was, necessarily, limited. USUG already has data on water use
and groundwater abstractions of each large polluting industry. Together with the
industries, a water balance should be made that shows how exactly water is used in a
company, how much ends up in the product and how much is discharged as wastewater.
Possibilities to reduce water consumption, to recycle water and to reduce COD-BOD
concentrations should be discussed and their effects on (future) wastewater charges
calculated. Such a process will take time, much more than was spent during this project,
and requires full cooperation from the industries concerned (a cooperation that we did
not always experience during our factory visits). Wastewater flows should be measured
and set against the total water consumption of the company during the same period, so
that the percentages can be used to determine wastewater quantities from total water
use. The equipment that will be procured under the ADB-grant (see paragraph 249) will
be helpful for this purpose. Wastewater samples must be taken over a period of time, so
they can be considered as representative for the quality of the wastewater leaving the
factories. Water volumes used x wastewater percentage determined x representative
concentration then constitutes the pollution load leaving the factory and entering the
sewers.
RETA 7918 Final report Page 88
E. Industrial wastewater charges
i. Current wastewater charges
234. USUG charges all its customers not only for the water supply, but also adds a
wastewater charge. Wastewater charges are based on the water supply, not on the
amount of wastewater discharged. Currently, they are ₮147/m3 for domestic customers,
₮300/m3 for industrial customers, while tanneries pay ₮600/m3.
235. The charges are a good start, but it could be argued that they are too low for
many industries. Distilleries and breweries discharge wastewater that is 5 times as
polluting as domestic wastewater. Even though their final products contain water that is
not discharged by the factories, they ought to pay close to 4 times the domestic
wastewater charge, say ₮600/m3 of water used, instead of the ₮300/m3 they pay now.
Tanneries discharge wastewater that is more than 20 times as polluting as domestic
wastewater, not even yet considering the chromium discharged, so they ought to pay at
least ₮3,000/m3 instead of the ₮600/m3 they pay now. A similar fee should be paid by
the intestine cleaning companies.
236. A disadvantage of the present system of fees is that it is entirely based on the
water the companies consume. Thus, there is an incentive for companies to reduce their
water intake, but no incentive to reduce pollution. Moreover, USUG has to deal with
complaints from companies, like the breweries, which argue that considerable volumes
of their water consumption leave the factories as beer and are not discharged by the
companies as wastewater. The most important reason to change the fee system would
not be to collect more money, but to reduce overall industrial pollution loads for the
protection of the treatment processes at the CWWTP. UB is likely to industrialize faster
in the future and a new approach to wastewater fees should aim at stabilizing, or better
decreasing, industrial pollution loads.
237. It is hard to understand how tanneries could complain about the comparatively
low wastewater fees they have to pay, but apparently they do. Argument is that they
discharge their wastewater to the Khargia pre-treatment plant and have to pay fees to
the company that runs the pre-treatment plant. The tanneries feel disadvantaged by this
double charge. Despite being under-charged for the pollution the tanneries cause, they
have a point. The tanneries themselves, with 1 or 2 exceptions, do not discharge any
wastewater to the sewers, but to the Khargia plant for which privilege they pay a fee. In
a fee system based on wastewater discharges, charges should be paid by Khargia, the
organization that actually discharges its effluent to the sewer. A preliminary proposal for
such a charge is elaborated in section E.ii below.
238. A new law, that recognizes the polluter pays principle, was adopted in 2011. With
UNDP sponsorship, a consultant is currently preparing proposals for wastewater charges
for the Ministry of the Environment. Interesting is that, in a draft document, a distinction
is made between a “water pollution fee” for wastewater that complies with the standards
and a “compensation for water pollution” in case the wastewater exceeds the standards.
A differentiation is also proposed for whether wastewater is discharged into the sewer,
or into the environment (a double fee). The fees in the draft document seem low,
certainly in comparison with the charges we suggested in paragraph 235. Moreover, the
draft document shows a long list of institutions that are eligible for large discounts,
between 50-95% of the wastewater fees. The document we received was very much an
unauthorized draft and much may still change. For the time being, the wastewater fees
charged by USUG will continue. However, considering the large differences in pollution
RETA 7918 Final report Page 89
loads by the largest industrial water consumers, it is proposed that, gradually, USUG will
move towards a different fee system for the large polluting industries, based on actual
wastes discharged. At the request of USUG, our initial thoughts on such wastewater
discharge fees are presented in the next section.
ii. Thoughts on a future system of wastewater charges
239. With the new polluter pays law, future wastewater fees should be based on
wastewater discharges, no longer on the water consumption of industrial companies.
However, suddenly switching to such a system would create difficulties for USUG as it
cannot immediately decide on the volumes of wastewater and the pollution loads of each
company in UB. A transition period is recommended, therefore, whereby USUG is legally
permitted to charge wastewater fees to companies on the basis of their water
consumption, as is the case now, and, for defined large polluting industries, on the basis
of pollution loads. To do so would require separate mechanisms for the following groups
of industries:
1. Small industries that discharge mainly domestic type wastewater, in fact most of
the industries of UB, including the many car wash industries that belong to the
top-140 largest industrial water users;
2. Large water users in the top-140 that also belong to the most polluting ones:
distilleries, breweries, soft drink manufacturers, intestine cleaning companies,
wool/cashmere companies and the few tanneries that are not connected to the
Khargia pre-treatment plant;
3. The group of tanneries, and a few nearby industries, that discharge their
wastewater to the Khargia pre-treatment plant.
@1 – small industries with domestic type wastewater
240. For most of the smaller industries, the present system of fees, based on the
combined water consumption of the USUG supply and private wells, could be continued.
In the more distant future, a system based on the estimated quantity and quality of
wastewater, using standard pollution factors could be applied. In addition, companies
that have made efforts to reduce their wastewater discharges could be assessed
separately and have their fees adjusted accordingly. Alternatively, USUG could assess
industries if an above average pollution was suspected.
@2 – large polluters
241. The larger polluters, those in say the top-50 out of USUG’s list of top-140 (but
excluding the tanneries that discharge to Khargia), should be charged in accordance
with the actual wastewater volumes and pollution loads they discharge to the sewer, in
line with the inventories described in paragraph 233 above. Considering the large
differences in COD-concentrations of the wastewaters of industries, even within the
same type of industries, the system should be based on actual discharge volumes and
the concentration of a number of key pollutants. Some insight in the differences in the
COD concentrations for three types of industries is provided by the numbers presented
in the table below.
RETA 7918 Final report Page 90
Table 30 Top industrial polluters – COD-concentrations Type of industry COD (mg/l)
Min Max Average
Wool/cashmere 480 8,400 2,600
Intestines cleaning 1,830 30,800 11,500
Vodka/Beer/Soft drinks 23 29,000 2,360
242. Ideally, wastewater flow meters would be installed in the outgoing sewer
pipelines of these factories and charges based on these flows. This requires wastewater
flows to be measured and sampled to determine the pollution loads. During the
industrial wastewater survey carried out under this project (see Appendix 3), a check
was made if permanent wastewater flow meters could be placed. This turned out to be
rarely the case. For a flanged electro-magnetic flow meter, wastewater pipes have to be
full with water and this is almost never the case. In addition, there are usually several
wastewater streams that have to be monitored, that only come together in one sewer
outside the factory premises. And most wastewater is actually discharged through a
partially filled concrete sewer. Flow measurement in partially filled sewers require special
equipment (“sewer rats”) that should not be left unattended for longer times, as solids
in wastewater may block the sewer at the measuring location and cause readings to be
inaccurate.
243. As placing permanent wastewater flow meters is not feasible in our view, it is
recommended to base wastewater fees on detailed surveys of the top-50 or so
companies that last one or two weeks and that will be carried out once a year, or twice a
year for the really large polluters. During the annual survey, in close cooperation with
the company’s management, all wastewater flows must be identified and compared with
the water consumption of the company, until a satisfactory water balance is agreed
upon. This is important as, during our industrial survey, it was found that not all
companies are equally helpful in pointing out where the sewers for different process
flows are located. Under new detailed regulations, USUG should have the tools to
penalize uncooperative companies, therefore.
Based on annual production data, comparing them with the production data during the
week of the survey, an annual wastewater pattern should be agreed upon. By taking
samples of each wastewater stream and of all wastewaters together, an annual pollution
load must be established for the company, with wastewater fees based on this annual
pollution load
244. In Europe and the USA wastewater charges are normally based on the combined
pollution of BOD or COD and Kjeldahl-Nitrogen. Industrial pollution by a company is then
compared with the COD + Kjeldahl-N of one person to arrive at the number of
population equivalents for which a company will be charged. Although BOD is a better
measure of the influence of a wastewater discharge on a treatment plant like the
CWWTP and on the environment, measuring COD is easier and has a long history in UB
and it is recommended to base the charges initially only on the basis of COD (except for
tannery waste: see below).
245. In all its communication with large industries, USUG should let it be known that it
encourages reduction of wastewater volumes and of pollution loads, as this improve the
performance of the CWWTP and, ultimately, the condition of the Tuul River. This implies
RETA 7918 Final report Page 91
that, after a company has improved its processes and reduced its discharges, a review
of the pollution charges must be made.
@3 – Tanneries (and others) discharging to Khargia
246. Tanneries in the Khan-Uul district that discharge all of their wastewater to the
Khargia pre-treatment plant should no longer be charged a wastewater fee. All charges
(which should be much higher than the ones applied at present) should be made to the
Khargia Company. The charges should be based on actual quantity and quality of the
effluent discharged by the Khargia treatment plant and should be determined by a
similar detailed survey as described above for the top-50 polluters. It will be the duty of
the Khargia company to sub-divide their overall charges to the over 20 tanneries (plus
some others) that discharge their wastewater to the Khargia plant. To be fair, this may
be hard for Khargia, as there are large differences in pollution loads. The table below
provides some indication on these differences.
Table 31 COD and Cr-concentrations of tannery wastewater
Type of industry Concentrations (mg/l)
Min Max Average
COD18 3,300 21,800 13,300
Chromium 1.3 46.2 27.6
With its high environmental impact, 1 kg of chromium discharges in effluent is charged
at over 50 x 1 kg of COD in many countries. It is recommended to include heavy
chromium fees as part of the wastewater charges in UB, as well.
247. As the tannery industry knows two distinct seasons, a high season from mid-
November to mid-March and a low season in the remaining months, pollution load
surveys at Khargia should be made at least twice a year.
248. The Khargia Company collects tannery wastewaters in a large tank and starts
treating the wastewater once the tank is full. The result is that during long periods no
effluent is discharged from the plant while, during short periods, shock loads of
wastewater are discharged, still with high concentrations of pollutants. This creates
special problems at the CWWTP as it has to cope with alternating high and low pollutant
loads. It could be argued that the Khargia plant should discharge its effluent only during
the period of low flows (generally at night) as then the CWWTP is under-loaded and is
better able to cope with the shock loads from batch operated discharges. Any fees to
Khargia can be made variable, low for discharges between 24h00 at night and before
04h00 the next morning, with higher fees for discharges during other hours.
iii. Flow metering equipment for the (bi-) annual pollution surveys
249. To be able to decide the wastewater loads by the top-50 polluting industries,
flows should be measured on all outgoing wastewater flows from these factories during
annual or bi-annual surveys. Permanent flow meters, like is the case for water
18 The concentrations shown are the weighted averages of samples taken from several tanneries. During a visit to Khargia, the company cited much lower values than shown in this table.
RETA 7918 Final report Page 92
consumption flow meters, were requested, but after the industrial survey it was decided
to procure 10 meters that can temporarily be placed in open sewers. During the
recommended future surveys, their performance can be monitored and any blockages in
the sewers resolved immediately. If USUG feels that permanent installation is warranted
in exceptional cases, it could leave the flow meters at important polluters for a longer
time. USUG already procured two meters to be installed at Khargia.
RETA 7918 Final report Page 93
IX. Reduction of NRW and water consumption
A. Current situation
i. Introduction
250. Non-Revenue Water is the difference between the system input volume (amount
produced) and the amount of billed authorized consumption (IWA Water loss taskforce).
NRW consists of two components: real losses (leakage) and apparent losses
(administrative errors, meter inaccuracy, illegal connections). The IWA Water balance
shows the different factors leading to NRW and Revenue Water. The Total System Input
Volume can be assigned to each of these factors and based on knowledge on the
individual components the total can be determined.
Figure 43 IWA Water balance
251. In Ulaanbaatar the main distribution network is controlled by USUG and the
water is delivered either directly to customers, or to so-called Customer Transfer Points
(CTP). CTPs are large size water meters that measure the volumes and pressures of
water delivered to groups of customers in apartment blocks or housing estates. Many of
the CTPs were constructed to measure the supply of water to housing estates belonging
to OSNAAG, the local Government’s housing estate authority and operator. USUG is
responsible for the distribution system and its operation up to the CTP. Downstream the
CTP, the organization responsible for the housing estate, like OSNAAG, or private
companies like Kantors, owns the distribution and is responsible for operation and
maintenance.
252. This section of the report deals with NRW in Ulaanbaatar, not only in the main
distribution network owned and operated by USUG, but also with NRW downstream of
the CTPs, in the housing estates managed by OSNAAG, the Kantors, etc. The lengths of
distribution pipelines in these estates are considerable as all pipelines are executed
double to provide for both warm and cold water. However a large part of the pipelines
are in open sight in the apartment buildings. NRW in the pipelines themselves are
therefore expected to be low. A schematic overview of the main and distribution network
is presented in Figure 44.
RETA 7918 Final report Page 94
Figure 44 Schematic structure of the main and distribution network
ii. NRW in USUG’s main network
253. The main distribution network of USUG of predominantly looped configuration
consists of approximately 380 km of pipes in diameters of 80 – 800 mm, laid in a hilly
area with elevation differences of up to 160 m. As much as 85% of the transmission and
distribution pipes are made of steel, with the remainder made of cast iron (CI). Details
are presented in the table below.
Table 32 USUG’s distribution pipes – diameters and lengths Diameter
(mm)
Total length
(m)
Percentage
(%)
Steel
(m)
Cast Iron
(m)
80
100
125
150
200
250
300
400
500
600
700
800
165
2,082
1,845
48,736
26,073
20,477
27,791
61,907
30,518
69,650
30,395
29,005
<0.1%
0.6%
0.5%
14%
7%
6%
8%
18%
9%
20%
9%
8%
165
1,087
1,845
35,575
20,529
6,017
23,421
55,317
23,515
69,650
30,395
29,005
-
995
-
13,161
5,544
14,460
4,370
6,590
7,003
-
-
-
Total 348,644 100% 296,521 52,123
254. Normally, a high proportion of steel pipes would be a cause of concern. Steel
pipes are generally prone to corrosion and in UB the steel pipes are neither coated, nor
provided with cathode protection. Some pipes were indeed affected by corrosion and
were replaced. But it appears that the corrosion was mainly caused by the presence of
nearby power cables, which turned the steel pipes into cathodes, which made them
prone to corrosive action. A visit was paid to the yard with old steel pipes that were
replaced. Apart from line corrosion at locations close to power cables, the old steel pipes
appeared to be in good condition. The prevailing soil conditions, with dry and non-
RETA 7918 Final report Page 95
aggressive soil (low electro-conductivity) causes the unprotected pipes to suffer little
damage through corrosion. Also the inside of the discarded steel pipes was in good
condition, most likely because of the permanent pressure in the distribution system.
255. In the past years, USUG’s NRW has been hovering around the 20% mark. The
figure was calculated based on metered date of the production of each individual
treatment plant and on the amount of water billed to customers. The charts below show
NRW over the past 6 years and variation of NRW over the year. NRW is in a (slow)
decline during 2008 – 2012 period, as an effort was made to get all the direct customers
of USUG and CTP’s metered. In 2006 98 % were metered and in 2010 all the direct
customers (4,147) were metered. Unfortunately, NRW increased again in 2011, to above
20%, because of a fault with a CTP with large water demand. The downward trend of
the NRW continued again in 2012, however, and over the first 8 months of the year
NRW became 18.7 % based on volumes water produced and water sold. For the year
2011 the total volume of water produced was 55.03 Mm3 and the volume sold was 42.99
Mm3 which is an NRW percentage of 21.9 %There is no clear pattern that shows
seasonal fluctuation during the year.
Figure 45 USUG’s NRW in the period 2007-2012 +NRW-variation over the year
iii. OSNAAG’s distribution systems and their NRW
256. When reviewing the water supply of UB, OSNAAG emerges as an important party.
OSNAAG, the housing authority, owns and operates many housing estates in UB through
its 20 service companies. The OSNAAG service companies not only manage, operate and
maintain the apartment buildings, but also take care of electricity, heating, hot and cold
water in their housing estates. OSNAAG owns a large number of apartment buildings
and provides water to more than 255,000 people in the center of UB. The service
companies buy water from USUG in bulk, with quantities measured at the CTPs, and
supply it to their individual customers. Besides OSNAAG, private owners of estates and
apartments (Kantors) fulfill a similar role. Kantors now provide housing, and water, to a
total of 73,600 people. However, while more than half of OSNAAG’s customers still pay a
flat rate for their water, all of the Kantor’s apartments are metered.
257. Of OSNAAG’s housing estates, 127 are provided with a CTP with GPRS facilities.
It is from these well monitored CTPs that most reliable information is available. In these
CTP monitored estates, OSNAAG rents out 78,407 apartments. Some years ago, all of
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012
NRW (%)
0
5
10
15
20
25
30
jan
feb
mar
ch apr
may
jun
e
july
augu
st
sep
t
oct
no
v
dec
NRW 4 year average
NRW (%)
RETA 7918 Final report Page 96
the households in these apartments paid a flat rate for their water use. But in the last
few years, more and more apartments have become metered. In October 2012 a total of
37,515 apartments (out of 78,407 apartments in the 127 estates), or almost 50% were
equipped with water meters. Households that rent their apartment from OSNAAG must
pay for in total 4 meters and their installation. Four water meters are required per
apartment, two in the kitchen (one for hot and one for cold water) and two in the
bathroom. It is estimated that, in order for OSNAAG to reach metering of 100% of its
apartments, another 41,000 households have to be metered.
258. For the distribution networks inside OSNAAG’s compounds NRW is estimated at
10 – 15 %. Engineers from OSNAAG indicate that this is lost revenue because of
unmetered apartments. However looking at the total amount of water delivered to the
OSNAAG’s in August 2012 (1,413,000 m3/month) and the actual volume billed
(1,550,000 m3/month) NRW is in fact not present. More water is billed than delivered
because of the assumption of the fixed consumption per person per month (285 l/c/d)
on which the tariff is calculated while actually the average consumption for people
(~136.000) in the unmetered apartments is lower (255 l/c/d). Once all apartments are
metered and average consumption is down to 130 l/c/d the volume of water saved is 6,2
mio m3/year or 17.000 m3/day.
259. A research carried out by the University of Mongolia in 2006 showed an NRW
level of 6%. However, at the time none of OSNAAG’s apartments were metered and
OSNAAG simply charged its customers for all water procured from USUG. Until areas are
completely metered it is impossible to determine the actual level of NRW and calculate
the real loss and apparent losses.
B. Components of USUG’s NRW
260. The following paragraphs provide an analysis of the different NRW components
experienced in Ulaanbaatar.
i. NRW caused by metering inaccuracies
261. By Law19 customers are obliged to pay their water tariff on the basis of a water
meter. Since 2010, all the customers that receive water from USUG are metered,
through a total of only 4,147 water meters. That is an extremely small number for a city
of the size of Ulaanbaatar and one of the main reasons that USUG’s NRW is low in
comparison to that of most other water supply companies in the region. In other cities
much of the NRW is found in the myriad of tertiary distribution pipes in small alleys with
poor access and in the hundreds of thousands of house connections. USUG hardly needs
to cope with such problems as many of the tertiary distribution systems are located
downstream of CTPs and bulk water meters, in the domains of OSNAAG and the Kantors.
262. The table below provides some details on the number of meters and the
percentage of water use by the different consumer categories. The table shows that
households are by far the largest water consumers in UB, who are served through only
few CTPs and bulk water meters.
19 Law of Utilization of Water Supply and Sewerage of Urban Settlements (revised October 6th, 2011)
RETA 7918 Final report Page 97
Table 33 Water meter distribution in USUG’s network
Category No. of meters % consumption
Businesses 2,055 12%
Households 1,404 74%
Public services 391 8%
Industry 295 6%
Total 4,147 100%
263. Most of the water consumption is measured through large size bulk water meters.
Generally, these larger meters are in good condition. They are owned, operated and
maintained by USUG and meter accuracy is checked every two years. Smaller meters
cause slightly more problems. Some of them are installed incorrectly and accuracy of
these meters tends to be less. Small water meters (every household needs 4 meters)
must be procured and installed by the customers themselves and they remain property
of the customers. Also these meters must be inspected for accuracy every two years. In
UB there are four meter shops (one of USUG and three private ones). But current
practice is that they are only checked every 3-4 years. When the inaccuracy of the water
meters exceeds the tolerances set by the Standardization Office the meter will be
rejected. In the last 3 years 8,966 water meters were checked, of which 1,137 (12.7%)
were rejected.
264. The average lifetime of water meters is around 5 to 6 years but in practice, if not
broken, they will be used for a longer period. A longer use of the meters increases
inaccuracy especially for the hot water meters. Tampering with meters is observed by
USUG, occasionally. Unfortunately, fines to be paid for tampering are too low, lower that
the benefit of lower water bills.
265. USUG has an automated system for measuring the water consumption at CTP’s in
the network. These water meters are monitored by an operator in the OCC (Operation
Control Centre) at USUG’s head office. A total of 140 such meters are installed. Some
20-25 of these meters are not working properly, which adds to USUG’s NRW. The reason
is mostly lack of spare parts and meters mishandled by customers. Two employees of
the customer department are responsible for the repair of these meters.
ii. Illegal connections
266. There is no information about or any experience with illegal connections. Judging
from field visits, illegal water use in UB must be very low. Pipes are either buried very
deep, or in cellars underneath apartment buildings together with other utility pipes. The
first making it very hard to make a connection and it would require skillful work and
adequate tools under extreme conditions while being exposed to the public eye. The
latter making it easy for staff of the service company to detect any illegal connection.
iii. Real losses
267. The UB distribution system is not young. As much as 22% of pipes are older than
43 years and 85 % is older than 23 years. The table below provides more detail. Despite
this middle-aged network, corrosion does not seem a major problem (refer to the
RETA 7918 Final report Page 98
paragraph above). The fact that most pipes are laid at a large depth and, once there,
hardly ever get disturbed by other utilities (as is the case in many countries with pipes
buried at less than 1 m), helps to preserve pipelines in their original condition.
Table 34 USUG’s distribution – age of distribution pipes Year Age range
(years)
Length
(m)
Percentage
(%)
Cumulative
percentage
2000-2010
1990-1999
1980-1989
1970-1979
1960-1969
1950-1959
2-12
13-22
23-32
33-42
43-52
53-62
10,583
40,738
195,714
24,307
59,367
17,935
3%
12%
56%
7%
17%
5%
100%
97%
85%
29%
22%
5%
Total 348,644 100%
268. In recent years there has been a shift to other pipe materials, notably Ductile
Iron (DI) and high density polyethylene (HDPE). So far, a total 10 – 15 km has been laid
using these new materials, mostly in distribution pipelines in the ger areas. In case of
being laid at depths less than 2 – 3 meters, both materials will have external insulation
against extreme winter temperatures and often will be heated, as well.
269. With so many old steel pipes, despite the apparently favorable conditions for
steel pipes in UB, the Water Supply Department at USUG does routine checks on
leakages in the distribution system. The department is equipped with a leak correlator,
acoustic leak detector, pipe detector and mobile ultrasonic flow meter. While this type of
equipment shows optimal performance on metal pipes, which is the case in UB, the
results of leak searches are not promising. While annual about 40 km of pipeline is
checked with the correlator, no leak has ever been found in this way.
270. All 100 leaks in the distribution in the period 2008-2011 were found through
physical inspection. They were found after complaints or when leaks were suspected and
pipes were dug up. Leakages are generally detected right after the winter season.
Cracks appear when temperatures are rising because either elements of the network
settle/move, or because parts of the network have been frozen. This occurs when flow in
the pipelines is insufficient to prevent freezing. The table below shows the number of
leakages registered in the past 4 years.
271. Taking into account that 85% of pipes is made of steel, it was no surprise that
most leaks (74 out of 100) were found in steel pipes. In fact, per km of pipe, steel pipes,
with 1 leak per 4 km, did better that CI pipes, with 1 leak per 2 km of pipes.
Table 35 Number of leaks found in the period 2008 - 2011
Material 2008 2009 2010 2011 Total Leaks/km
Steel 13 17 12 15 74 0.250
Cast Iron 4 6 8 5 26 0.499
Total 17 23 20 20 100 0.287
RETA 7918 Final report Page 99
272. The data about the location of the leaks show that many of the leaks occurred
close to pumping stations. Pressures near the pumping stations are at their highest and
especially sudden pressure shocks could cause problems in CI-pipelines at bends or
tees, especially if anchor blocks were not executed properly. Especially near the Central
pumping station many leaks were found, occasionally causing large floods.
C. NRW at OSNAAG’s and Kantors’ distribution systems
273. NRW is USUG’s distribution system is only part of the equation in UB’s overall
NRW. Much of the smaller distribution pipelines and service connections are located
downstream of bulk water meters and CTPs, in the housing estates of OSNAAG and the
Kantors. The NRW in this distribution is of not of real concern to USUG. It does affect
USUG’s operations though, as will be described below.
274. Until recently, only few of OSNAAG’s customers used meters to measure their
water consumption. All apartments were charged for a daily water consumption of 285
l/c/d for the number of persons officially registered at the address. This was a
satisfactory arrangement for OSNAAG as the money thus collected covered their USUG
bills reasonably well. However, with a drive to preserve water and to let families pay for
what they actually consume, OSNAAG has started to encourage their customers to buy
and install water meters and pay for what they consume. While in 2007 only 18.3% of
OSNAAG apartments were metered, the percentage had already increased to 47.8% by
2012.
275. The increased metering in the OSNAAG compounds has dramatically reduced
water consumption. Average consumption went down from 291 l/c/d in 2006 to 202
l/c/d in 2012 (refer to section H below for more details). This caused a reduction in
revenue, and in production costs, for USUG, but it causes financial pain for OSNAAG as
fees collected from the households are no longer sufficient to cover the water bills that
are based on CTP-measurements. Because of their recently increased awareness on
water flows, OSNAAG was now able to quote an NRW percentage of 10-15% within its
premises. However this is still with only partially metering and thus an estimate.
276. The private Kantors operate on the up-scale side of the market and have always
equipped all their apartments with water meters. Engineers from OSNAAG stated that
NRW in these private Kantors is very small, but no data could be retrieved to
substantiate this claim.
D. Past NRW-reduction efforts in UB
277. Several investigations have been made into USUG’s NRW. A pilot has been
executed for the main network in the 3rd and 4th micro districts of Ulaanbaatar in 2009.
To make the water balance for the area the area was isolated and the inflow was
metered. At all the CTP’s the consumption of the customers was determined and based
on the difference the physical losses were calculated. The result from this pilot was that
in that area the physical loss in the main distribution network was about 0.9%. The
methodology proved to be a good way to determine actual NRW levels and can be
repeated in other areas.
278. A small number of CTP-areas are completely metered and information is available
on the level of NRW. For the area Moscow (in UB), with 20,990 people, the level of NRW
RETA 7918 Final report Page 100
is 4%. This is a minimal percentage which can be attributed to meter inaccuracy,
administrative errors and small leaks. This kind of minimal NRW can be considered as an
unrecoverable loss.
279. USUG also has a number of apartment buildings. These are 100% metered and
give an indication of the level of NRW in the building and the distribution network inside
the buildings. An investigation into an apartment building with 1,300 people showed an
NRW of 0.7%. This number is quite low and therefore not representative for all
apartment buildings. However all the apartment buildings that were visited have shown
favorable conditions (easy to check, dry cellars) and leakage and tampering within the
buildings is minimal.
E. Objectives for an intervention program - general
280. An intervention program should have the following three objectives:
i. NRW-reduction in the distribution managed by USUG;
ii. NRW-reduction in OSNAAG distribution systems downstream bulk meters/CTPs;
iii. A reduction in the per capita amounts of water used.
281. The objective of NRW reduction is to deplete the need of primary energy
resources for water systems operations, save water at both customer level and supply
level ensuring more sustainable use of available water resources, and promote a more
reliable and more efficiently run utility. In an NRW-reduction program, also reduction of
NRW at the OSNAAG compounds will be incorporated.
282. In NRW there is always a component that is recoverable and a component that is
unrecoverable or very hard to recover. Some administrative errors, meter inaccuracies
and minimal leakages are unavoidable and this is called the unavoidable annual loss.
From the part that is avoidable the objective is to regain as much as is economically
viable. NRW-reduction should stop once a further reduction costs more than the benefits
obtained from a lower NRW. Normally, NRW-reduction costs little in comparison to the
benefits it brings. However, in UB this balance may be skewed towards a higher NRW.
Pipes are located up to 8 m below ground level and physical leak reduction costs much
money. Care should be exercised to avoid embarking on an NRW-reduction scheme that
costs much and that may not bring large reductions. With NRW already in the middle
range and no lack of water resources (most pumping stations operate below capacity),
an NRW-reduction proposal should cherry pick activities that will cost relatively little.
283. The picture below is a schematic representation of activities that could be carried
out and to what extent.
RETA 7918 Final report Page 101
Figure 46 Distinction between recoverable and unavoidable losses
284. Of USUG’s ~19% of NRW it is estimated that about half should be categorized as
unavoidable. Meter inaccuracy (based on data of the meter workshop) with 3-4 %,
administrative errors have not been found. However, some inaccuracies will always
occur causing 1-2 % and 3-4% of loss because of the relatively high network pressure.
Taking into account also the length and age of the network, the total of unavoidable
losses will add up to 7-10%. This would leave say 9-10% of potentially recoverable
losses. The 7-10% remaining unavoidable losses compare well to current NRW levels in
the Netherlands where water supply is fully developed and where, with lower network
pressures than in UB, NRW is now 5-7%.
285. By reducing NRW, USUG’s marginal production costs will decrease. As staffing
and operational costs will not decrease, only a reduction in power consumption should
be considered. One m3 water less to produce will save 0.661 kWh at a cost of 0.661 x
₮88 = ₮58.1720. With current NRW approximately equal to 18.7%, or ~10 Mm3/year,
the value in monetary terms of NRW is approximately ₮582 million per year (~USD
416,000/year). If the NRW could be reduced by half, USUG would benefit to the tune of
~₮290 million per year (~USD 208,000/year).
286. Because of the relatively low value of NRW, NRW-reduction measures should be
executed at minimal costs and emphasis should be given to measures that cost less and
achieve relatively much. This requires a carefully designed NRW-reduction proposal.
Such a proposal is elaborated in the sections below, both for USUG’s and for OSNAAG’s
NRW, in respectively sections F and G below. A separate section (H) is dedicated to
water consumption reduction.
20 It should be noted that, after implementing energy reducing measures proposed in this report,
energy per m3 of water will become less, causing also a reduction in the NRW-valuation.
RETA 7918 Final report Page 102
287. An NRW-reduction program with an overall cost of USD 564,000 is proposed. If
this would achieve a 40% reduction of the potentially recoverable NRW, the Internal
Rate of Return would be 8.82%, not high in comparison with most NRW-reduction
schemes that are highly profitable from an economic point of view, but still acceptable.
F. Proposals to reduce USUG’s NRW
288. To decrease the level of NRW, interventions can be subdivided in 2 categories.
One is to tackle the apparent losses (which is least costly and is relatively fast). Second
is to reduce real losses (which require investments and time).
i. Apparent losses
289. To reduce apparent losses the following components need to be addressed:
a. Metering accuracy
b. Data transfer errors
c. Administrative databases
d. Illegal consumption
a. Metering accuracy
290. To ensure that water meters are operating properly, regular checks need to be
executed. By law all water meters have to be checked every 2 years on proper
functioning and accuracy. USUG already implements those checks regularly, especially
for the larger water meters. There is no need to further increase these checks. The way
and frequency it is done is sufficient to optimize meter accuracy.
291. An extreme form of inaccuracy of water meters is found with water meters that
are not functioning properly, or at all. As described before, USUG currently uses 20-25
large water meters that are known not to function properly. Just these 20-25 meters
could cause a 3-4% of the current NRW. Repair or replacement of such known cases of
inaccuracy must be taken up urgently.
292. Two measures would improve meter accuracy are (1) selecting only high quality
water meters for the network of USUG; and (2) prescribe a number of specific brands of
water meters in house connections and making the use of others illegal. At present,
customers are free to select any type of water meter and tendency is to procure the
cheapest brands, which are often (but not always) also the worst. Data from the meter
workshop reveal that the cheaper brands are (much) more likely to fail the tests.
Implementing legislation/regulation would improve the situation in a period of 7 to 10
years, at no cost to USUG.
293. Tampering with meters is a big issue in UB. USUG has assigned only 2 of its staff
to detect meters tampered with, but it is found that as many as 10-15% of meters show
at least attempts at tampering. It is estimated that tampered with water meters cause
an NRW in the range 2 to 4 %. Penalties are imposed if meters were tampered with, but
the benefits of tampering, resulting in lower water bills, outweigh the relatively low
penalties. To reduce tampering with water meters, more checking will be required and
penalties need to be made much harsher.
RETA 7918 Final report Page 103
b. Data transfer errors
294. During the feasibility period, a random number of meter readings were compared
with the volumes billed. No mistakes were found and the conclusion is justified that an
active search for data transfer errors will not result in a lower NRW. No effort on
improving this system is recommended, therefore.
c. Administrative databases
295. USUG’s administrative database is completely computerized, with records of all
4,147 customers registered in the database. Because so much bulk supply is involved,
USUG’s number of customers is small. Generally, small databases contain only few
errors and hardly any NRW-reduction can be expected from carrying out active checks
on the records. On the other hand, because of the small customer base, checking is not
a great and costly effort and it is recommended to check the database once every 3
years, therefore.
d. Illegal consumption
296. Illegal consumption is water consumed through an illegal connection to USUG’s
distribution system. Illegal connections were made by unauthorized individuals or
companies and which are (obviously) not registered in USUG’s database. Water used
through illegal connections is not (cannot) be billed and is, thus, not paid for. Illegal
connections are not easily made without detection to distribution pipes with high
pressure and buried deep underground. In apartment buildings piping is often in plain
sight in the basements of such buildings which makes detection easy. It is recommended
to carry out physical inspections once a year in apartment buildings not belonging to
OSNAAG or the Kantors, especially in those areas of USUG’s distribution system that
have a high NRW. OSNAAG and the Kantors are advised to carry out similar inspections.
ii. Real losses
297. To control real losses there are basically the following tools;
a. Pressure management
b. Active leakage control
c. Speed and quality of repairs
d. Pipeline and asset management
a. Pressure management
298. Pressure management is an undervalued tool to reduce leakage. International
data on pressure/leakage relationships demonstrate that leakage in distribution systems
is usually much more sensitive to pressure than would be estimated by the square root
relationship, with different components of leakage responding differently to pressure.
Pressure and leakage are exponentially related to each other, a 1 % increase in pressure
will result in a 1.15 % increase in average leakage rate. Management of pressure is
therefore one of the fundamentals of an effective leakage management policy. It is all
the more appealing as it usually costs little and often reduces costs because of the
reduced energy needed for pumping.
RETA 7918 Final report Page 104
299. Pressures in USUG’s network are (too) high, with levels between 4 and 7 bar
quite common. Some OSNAAG companies’ switch of their pumps at night as the
pressure in the distribution system is (more than) sufficient to transport water also to
the top floors of their apartment buildings. Reducing these high pressures to minimum
levels (determined mainly by ongoing contracts with OSNAAG that stipulate a minimum
pressure of 20 mwc) will help to reduce NRW by an estimated 2-4% and reduce energy
costs at the same time.
300. Not only the levels of pressure are important, also the sudden changes in
pressure that occur frequently should be tackled. Pumps that switch on or off cause
shock waves in the distribution system and many leaks occur just after such sudden
changes in pressure. Moreover, many of the pipe bursts occur close to the pumping
stations where pressures and pressure changes are highest. By using frequency
controlled pumps this effect can be eliminated and flow changes can become more
gradual. It is recommended from a point of view of NRW management to have frequency
controlled pumps at every pumping station. This will reduce leakage and increase the
lifespan of the network.
b. Active leakage control
301. Active leakage control refers to finding and repairing invisible leakages. Because
of the specific circumstances of the low lying pipelines this is quite hard and costly in UB.
Active leakage control is not recommended for the entire network therefore. To
determine where the actual levels of NRW are highest the network should be divided
into so-called District Metering Zones (DMZ), large sections of the network that are
hydraulically separated and where inflow of water can be measured through bulk water
meters. By comparing water inflows with customer billings for each DMZ, NRW can be
calculated for each DMZ and DMZ with high NRW can be given special attention. The
figure below shows how the main network can be subdivided into a number of DMZ. It is
common NRW-reduction practice to sub-divide a DMZ into smaller District Metering
Areas (DMA). In UB, each DMZ already has several DMAs in the form of separate
distribution systems within OSNAAG’s housing estates which are metered through their
CTPs.
Figure 47 Proposed DMZ (hydraulic islands}
302. Dividing the main network in smaller units will be carried out to improve
operational management of the distribution system. Fortunately, creating DMZs is also
RETA 7918 Final report Page 105
the first step of finding leakages pinpointing NRW to specific areas. Once these DMZ’s
are established the level of NRW can be determined and the DMZs with the highest
levels of NRW will be investigated further. With different techniques like correlation and
acoustic equipment invisible leakages can be found. Experience shows that USUG is not
yet successful with this methodology. Training and guidance is needed to apply the
techniques and find leakages. However, activities may not be too expensive so as not to
become uneconomical.
c. Speed and quality of repairs
303. Once leakages are found the water supply department is responsible for making
adequate repairs. As explained above, not many leaks are found and those found are
usually very large and need to be repaired urgently. USUG is experienced in handling
such leaks and uses appropriate techniques, as was demonstrated by a pipe burst (and
subsequent repair) that occurred during the presence of the feasibility study team in UB.
The knowledge and skill to repair such leaks to a high standard are already existent.
There is no need to further increase these skills.
d. Pipeline and asset management
304. Asset management is actually a tool for long term NRW management. Once NRW
is reduced it is of importance to keep it at the desired level. It is not uncommon that
water companies make a large effort in reducing NRW, succeed in doing so, but then let
benefits slip after interest in NRW decreases. To keep NRW at the desired level, asset
management is a useful tool. Through a mini-WOP arrangement between Vitens Evides
International and USUG, attention is being paid to asset management. In 2012 several
experts have visited USUG to give training and assistance in setting up an asset
management system. The supporting activities will be completed in 2013.
G. Proposed NRW-reduction pilot in an OSNAAG compound
305. To determine the NRW and its components in OSNAAG housing estates, the
Feasibility study team agreed with OSNAAG on executing an NRW-reduction pilot study
in a hydraulically isolated part of OSNAAG’s Sunny house service company. This service
company has several CTP’s in their control and the area selected is measured through
CTP 2. This isolated part of the compound houses a total of 1,092 households with 3,895
people. The location of this compound is shown in the figure below.
306. Within the CTP-2 area in the Sunny housing estate, a number of parts have been
renewed. In August 2012 they have renewed the cold water control panel and have
installed new booster pumps. With the installation of this new equipment it has become
easier to carry out pressure control in the area.
RETA 7918 Final report Page 106
Figure 48 Proposed NRW-pilot: OSNAAG’s Sunny house estate – CPT-2
307. The pilot will be executed in a few steps. It is intended to make a complete water
balance for the area. Therefore not only individual households will be metered but also
the apartment buildings, that way also the actual losses in the pipelines can be
determined.
Step 1: Check water meter USUG
Step 2: Check customer database (all customers registered properly)
Step 3: Record data to make a flow pattern
Step 4: Install water meters outside apartment buildings
Step 5: Record flow into the selected apartment building
Step 6: Install household water meters
Step 7: Make an action plan depending on the findings
Step 1: Check water meter USUG: to ensure that proper data is collected the meter
of USUG should be checked in the meter workshop. USUG will take out the meter and
calibrate it to ensure it is functioning correctly. If necessary replace it with a new water
meter.
Step 2: Check customer database: the customer department of Sunny House will
check all the registered residents to see if there are any connections which are not
registered and any volume of water is missing through illegal connections.
RETA 7918 Final report Page 107
Step 3: Record data to make a flow pattern: during the check of the customer
database already data can be gathered from the water meter. Through the CTP flow
patterns can be gathered in the customer department of USUG.
Any specific problems during that period need to be recorded. The flow pattern found
will be compared with the flow pattern of the apartment buildings (see step 4).
Step 4: Install water meters outside apartment buildings: in front of three
apartment buildings mechanical water meters will be installed to record the flow going
into these individual apartment buildings.
Step 5: Record flow into the apartment buildings: for a period of one month the
flow into each apartment building is recorded and the daily flow pattern established and
compared with the flow pattern for the whole compound. Large discrepancies, indicating
NRW, must be investigated.
Step 6: Install household water meters: within the Sunny house estate, the
apartment buildings with the highest non-metered per capita consumption will be
selected and an estimated 800 water meters installed. By choosing the highest
consumption the effect of metering will be clearer. Also in these apartment buildings
NRW might be high as the un-metered consumption can either be explained by high use
by customers or by high NRW in the pipelines. After installation the meters of the
customers will be read twice per month for a period of 3 months. After the test period
the meters can be read in a regular pattern. However they will be registered separately
to be able to calculate NRW on a monthly basis.
Step 7: Make an action plan depending on the findings: depending on the results
of the investigations, it should be possible to pinpoint the causes of NRW. An action plan
should address these causes. OSNAAG staff suspect that NRW is especially caused by
improper use by consumers. If this would indeed be the case, NRW reduction programs
should focus on metering of households and on customer awareness.
H. Water consumption reduction
308. Taking into account scarce groundwater resources, reduction of water
consumption is another objective of this project. It is a well-known fact that unmetered
consumption is the enemy of water conservation. This was proven in UB when, over the
period 2007-2011, OSNAAG started with a campaign urging their customers to install
private water meters. During that period metering increased from 18.3% of apartments
to 45.5%, while the average consumption in OSNAAG’s apartments decreased from 285
to 204 l/c/d.
309. The chart below shows, to a certain extent, what metering will do to water
consumption. The chart combines the percentage of apartments metered in a certain
compound and the average consumption. The chart is based on water consumption in 19
OSNAAG compounds with a total of 255,000 people. Although there are large variations,
the trend is clear, the more meters are installed, the lower the water consumption. The
trend line shows that with 0% of apartments metered, average consumption would be
260 l/c/d, while with 100% metered, consumption would be less than half, at 130 l/c/d.
This may be somewhat over-optimistic. Families with a low water consumption are
probably more inclined to invest in 4 water meters (4 meters are necessary to measure
all inflows into the house: 2 in the front – 1 for cold water and 1 for hot water- and
similarly 2 at the back) than large families that suspect that their water consumption is
RETA 7918 Final report Page 108
high. The final per capita consumption may be higher than the 130 l/c/d shown,
therefore.
310. Water saving through installation of water meter is unmistaken and large
amounts of water can be saved. Total water consumption to 127 areas measured by CTP
could decrease from the current 45,600 to 30,600 m3/d. With this saving an additional
115,000 people could well be provided with 130 l/c/d.
Figure 49 OSNAAG’s apartments: Effects of metering on water consumption
311. Such a decrease in consumption would also have financial implications. USUG’s
revenues from OSNAAG would decrease by USD 100,000 per year, but this could well be
compensated by increased sales to additional customers. The transition from
consumption with fixed payments to metered consumption has created more problems
for OSNAAG: Amounts collected before were sufficient to cover payment of USUG’s
water bills. OSNAAG is now exposed to the difference between the water consumption
measured through the CTPs and the volumes it can bill to its customers based on
metered consumption. Besides tackling this difference (in fact OSNAAG’s NRW),
OSNAAG will have to raise tariffs to cover this difference.
312. Table 36 shows data on the degree of metering in OSNAAG’s apartments and the
effect this has had on the average water consumption. It turns out that metered
customers consume between 90 to 130 l/c/d, whereas the unmetered customers can use
as much as 418 l/c/d (in Iven Eh). It should be noted that any NRW in OSNAAG’s
systems is allocated to the unmetered customers, so their actual consumption may be
less. Unmetered consumption is extraordinarily high in Iven Eh. This indicates that either
water is lost, or that people waste a lot of water. Staff from OSNAAG indicates that this
area has always had a high consumption and believes that this is either because of
waste from the customers, or because of illegal connections. In such an area, as well as
in other areas with consumption over 300 l/c/d, OSNAAG needs to make more thorough
RETA 7918 Final report Page 109
investigations. In the area Batbayanburd, consumption of unmetered customers is
shown as 35 l/c/d. This is unlikely and probably due to a problem with the water meter.
This needs to be investigated by USUG and OSNAAG.
Table 36 OSNAAG: Effects of metering on water consumption Location Metered consumption Unmetered consumption
% No. of
people
Av. Cons.
(l/c/d)
No. of
people
Av. Cons.
(l/c/d)
Sancomfort 11.7% 1,674 164.6 12,681 284.1
Ema & B 18.9% 5,068 108.7 7,631 238.3
Sims 25.7% 1,778 104.3 5,035 254.7
GM 27.1% 5,784 175.3 7,482 237.8
Ashid Undrah 33.9% 4,945 134.4 7,221 258.5
Sunny house 34.0% 14,880 95.4 15,992 190.4
Unor gorhi 35.7% 3,673 114.8 8,085 327.5
Etseg Eh Huu 40.0% 13,253 91.7 6,806 122.4
Ganga Urgoo 42.9% 4,537 97.5 4,904 209.9
Unor town 43.1% 8,213 79.1 8,096 263.2
Sansar Urgoo 44.4% 2,780 114.4 4,601 240.3
Dulaan Urgoo 46.4% 3,702 160.1 5,845 243.2
Tavan shar 47.8% 1,743 98.8 8,070 311.4
Huh Asar 52.6% 14,820 90.5 13,331 199.6
Open House 59.5% 6,130 65.6 3,932 215.0
Housing Serv. 66.0% 4,496 85.0 6,818 293.6
Hairhan Uul 70.8% 7,391 85.5 6,133 296.4
Batbayanburd 74.2% 3,677 113.8 1,922 35.0
Iven Eh 77.2% 5,532 135.9 1,464 418.7
Moscow 100% 5,162 131,2 0 N/A
I. Public awareness
313. Public awareness has to be a key activity according to Municipality of UB, USUG
and OSNAAG. Through public awareness, metering will increase in UB, water savings will
be achieved and water saving culture will be improved, thus having a positive effect on
water resources. By law, water has to be supplied through a water meter. At the
moment 41,000 households or 51.4% of OSNAAG apartment households do not yet
possess water meters. Surveys of USUG executed by independent agencies during the
last three years repeatedly show similar results with regard to the desirability of water
meters. Some data from the latest survey are presented below (in the separate RETA
7918 Social Survey Report more data is available):
- 73.2 % of the people without water meters would like to install a meter; the
other people (26,8 %) don’t want one;
- Of the people who are not interested in having water meters, 24.2% of them
think: water is expensive, 18.7%; it is same whether you have it or not, 17.6%;
it is difficult to have many water meters, 11% of them; it is impossible to install a
water meter in our pipeline, 5.5%; the remaining 4.4% don’t know from where to
get it;
RETA 7918 Final report Page 110
- For people without a meter, 26% would like to lease the meters; 57.4% would
buy water meters if the price was less than 20,000 MNT per water meter (~USD
15) and 8.9% would still not buy a water meter regardless of the price;
- 58.9 % of the respondents were against saving water as long as they pay their
bill; the remaining are in favor of saving water. However compared to that 88.7
% of those interviewed advise their children to save water;
- 91% of respondents believe that groundwater resources are in danger. 7.3%
doesn’t agree with that.
314. Secondary analyses based on USUG’s existing survey of Customer Satisfaction
Survey of 2010, 2011 and 2012 years has been done and it has shown a necessity to
conduct a Focus Group Discussion (FDG) and Key Informant Interviews (KII) as some
specific data on water metering was missing. Because of the already available surveys
and due to the limited time and budget no full survey was executed.
315. The questionnaire of FGD was prepared on the issues related on Water Metering,
Water Saving and Water Saving Culture. The target group has been chosen carefully
from apartment customers, mainly from old and down town apartments, who have most
problems with water metering due to old house pipes, and included representatives from
USUG, OSNAAG, Association of Condominium and others. The FGD consisted of 40
participants (9 male and 31 female), which are chosen mainly from downtown and old
apartments houses (27). 40% of them were without water meters in their apartments.
FGD included 18 representatives from OSNAAG (8 engineers, 4 water meter readers, 2
accountants), USUG 2 staff, and Association of Condominium 2 staff.
316. A FGD workshop with stakeholders has taken place on October 13th 2012 with 40
participants and it has been conducted in 3 working groups. Each group was facilitated
with a same guideline and questions. FDG shows that people are aware of reduction of
water sources, the value of water, importance of water saving; however, it is not in a
sufficient level.
317. The Key Informant Interviews (see the list of KIIs in Attachment @@) and FGD
within a small number of participants, which are chosen from previous FGD has been
done to collect missing data. The questions for KII and small FGD were the same, but
specifically targeted to their responsible fields.
i. Focus Group Discussions
318. Some of the remarks made during the focus group discussion are mentioned
here.
- Water metering is compulsory by law and Government should take an action for
it and implement it in steps. It could give certain discounts for water meter and
it’s installment as “Ger OVEN” several programs, which was dedicated to combat
with UB city’s air pollution and then after it’s payment tools as of licensing.
- The selection of proper water meters with a guarantee should be advised to each
household for correct measuring and to avoid future problems.
- Old apartments pipelines should be changed completely or needed to find an
alternative solutions, while of encountering so many difficulties with old pipelines.
- The OSNAAG and OCC service, rule, requirements and accountability should be
improved especially for installing water meter for fixing any damages during
installation in order to improve the customer satisfaction.
RETA 7918 Final report Page 111
- The pipes, which are under responsibility of Association of Condominium as of
common property, should be repaired, while the associations are not capable to
fix it.
- The number of laboratories, which guaranteeing the quality and calibrate water
meters, should be increased and improved in capacities.
- Customer friendly solutions for reading water meter points should be found such
as with an automatic reading from a distance, while reading a water meter points
(sometimes there are several) monthly, bothers customers.
- Water cost, tariff and fee should be adjusted depending on a water consumption
level of customers, through a stepped tariff high consumption should become
more expensive.
- The co-operation and networking among the people should be developed, where
they can give each other well advised requirements on water saving and other
useful tools. People must improve their control on water saving, completeness of
their pipes through their condominium association and plumbing skills.
- There are a lot of institutions related to water; however, there is no any
organization, which permanently deals on improving Water Saving Culture. Policy
and decision makers consider the importance of the issue, but they all keep
saying that they do support it in a policy level.
Conclusions
Conclusions of the FGD are stated below:
• A lack of State Policy and support for water metering, water saving and water
saving culture;
• A lack of knowledge on water saving tools, equipment and its labeling among the
consumers;
• A lack of information to the public regarding water saving, water metering and
water saving culture. At the moment only on UN Water Day, 22 March extra
attention is being paid;
• A lack of system accountability (e.g. increased number of water meter, could be
planned), responsibilities, networking of related organizations, which could be
responsible to issues of water metering, water saving and water saving culture;
• A lack of problem solving, when problems are encountered during installation of a
water meter;
• A lack of educational program and advertisement on water saving culture.
ii. Key Informant Interviews
319. The information as acquired through the KII is presented below;
- It is obvious that there is no any institution, which is dealing with responsibilities
on Water Saving Culture, especially; water metering is the key issue of saving
water in UB. Ministry of Environment and Green Development is dealing with this
issue as Water Saving and Using Grey Water technology, but all this will be at a
policy level and not much is put in practice.
- A program or project on Water Saving Culture could be developed, which is cross
the sectors among the different stakeholders. And then this Public Awareness
Building could be called “Traditional Culture and Knowledge of on Water Use and
Conservation”.
- The discussion on establishing Water Partnerships like in Sweden is on-going, one
of the stakeholders should take an initiative and it could be led by the President
of Mongolia. The Water Regulatory Commission already became a Member of this
RETA 7918 Final report Page 112
organization. In general, “WATER AND SAVING” is mostly the responsibility of
Ministry of Environment and Green Development, however, the issue related
water metering as key issue of saving water in UB city, has not been considered
before at this level.
- The issue of cultural entertainment for children an attractive way on Water
Saving Culture could be considered further for discussion, while Ministry of Sport,
Culture and Tourism is responsible for Theatre of Puppet.
- The youth education on water saving culture, at secondary schools on reflecting it
into curriculum, is possible in 2 ways, either to add the issue to the relevant topic
or to add more hours of it.
- The Ministry of Environment and Green Development has a fund called “Nature
Protection Fund”, which could be a funding source for Public Awareness Building
Program on “Traditional Culture and Knowledge of on Water Use and
Conservation”, which could be cross-sector among all relevant organizations.
- The Association of Condominium could be used for giving information and advice
to its apartment-customers, collecting bills of repair works in a small amount and
paying it to relevant organizations. It should be given a motivation for making it
better.
iii. Public Awareness Building Campaign
320. The key issue of saving water in UB is water metering as 74% of the total water
distributed is consumed by apartment customers. As discussed before in this report the
water consumption per day in each household was 420 liter in 1997 and now after water
metering of almost 47,8 % is 202 liter according to the statistics of USUG 1st August,
2012. This clearly shows that once apartments are metered and people pay according to
their consumption they become aware of the costs and their ability to reduce water
consumption. A Public Awareness Building Campaign (PABC) and youth educational
program should be developed on theme Water Saving Culture including water metering
and to make permanently.
321. Ideally a PABC should be focused on scarcity of water source and increased value
of water; however for many people the financial issue of saving money is an important
motivation to actually save water. The advantageous sides of water meter and best
practices of saving water in daily lives, water saving tools as WC double flash, water
saving showers and forceits and water saving electronic equipment including its labeling
should be used and presented in the various advertisements of media for water saving
culture.
322. It is needed to prepare a PABC Plan or Program on theme of Water Saving
Culture and disseminate this culture with following activities:
- To increase a state participation by appointing a promotional department;
installing water meter in every household and to increase a water tariff for the
unmetered apartments;
- To make it through adult training and information e.g. family education, to
youth by reflecting it to kindergarten and secondary school program;
- To improve promotion via media e.g. TV as most important tool (from the
survey people indicated to get most of their information from that), Radio,
newspapers and to make it permanently.
323. Advertisement of media should be focused on the following:
RETA 7918 Final report Page 113
- To introduce it from the financial benefits with additional appeal to save
water;
- To introduce the negative consequences against the environment;
- To deliver realistic and statistic information and studies, which gives
comparisons of saved water;
- To make a water saving campaign as state policy with participation of
Government;
- To bring it to children in most attractive form e.g. trick movie;
- A cultural entertainment could be more effective and easy way to bring Water
Saving Culture to our society.
324. Water Saving is a responsibility of a number of organizations and all citizens.
There are relevant organizations as USUG, OSNAAG, Ministry of Environment and Green
Development, Green Development Program, which are responsible for Saving Water,
however, according to the FGD, have not yet done sufficient to put policy into practice.
325. Cultural Entertainments and all media are commercial, therefore all
advertisement programs “Water Saving Culture” should be made with a planning and
budgeting of relevant organizations. Some of TV and newspapers costs are following:
Table 37 Costs of media campaigns
Name of Media Unit Cost in MNT
TV Channels
National TV 1 min 150,000
UBS 1 min 150,000
TV9 1 min 70,000
TV5 1 min 100,000
Eagle 1 min 60,000
MN25 1 min 150,000
Newspapers daily
Zuunii medee A4 page 300,000
Undesnii Shuudan A4 page 450,000
Unuudur A4 page 500,000
Udriin sonin A4 page 200,000
326. The activities for the PABC for Water Saving Culture are mentioned in Table 38.
The Draft Plan is made based on the secondary analysis of existing studies, USUG and
OSNAAG statistic data, FGDs and Key Informant Interviews.
327. Round table meeting is needed annually for forthcoming activities, improving
cooperation and networking with regards of Water Saving Culture; improving
Accountability; building Water Partnerships; improving advertisement and its’ tools;
improving and reflecting water saving culture into educational programs, which is in the
plan in the amount of 11 million MNT.
328. Stakeholders involved in the PABC are the Ministry of Environment and Green
Development, the Ministry of Education and Science, the Water Regulatory Committee,
USUG, OSNAAG, Association of Condominiums, Media, donor organizations and related
organizations.
RETA 7918 Final report Page 114
329. Target groups are all consumer groups but mainly focused at Adults (older than
21 years) and Youth (12 – 21 years), who need to become well aware of their duty of
Using and Conservation of Water and to implement it in daily lives. They will be the
customers for the coming 10 years and once good practice is common the smaller
children will engage as well. All proposed activities of this draft PABC is in amount of 166
Million MNT, which include costs of various media advertisements.
Table 38 Public Awareness Building Campaign Nr. Name of the
proposed activities Responsible Timing Estimated cost in 1000' MNT
Cost per unit
Quantity Total cost
1 Round Table meeting
of all stakeholders
(50), should be held
every year, which
include followings:
Stakeholders
decision
First one,
in Jan,
2013
10,950
2 Education to children:
Play of Puppet (in
proposal)
Ministries of
Env. +Culture
20,000
3 Hanging posters on
School WC and Wall:
Min. of
Education+
children
0
4 Cultural
Entertainment: 90'
Min, of
Env+USUG+
Cultural
Enterprise
Yearly 30,000 1 30,000
5 TV advertisement 1'
program: everyday:
1'
Any
stakeholder
Daily 150 360 54,000
6 TV programs
Preparation with
different targets and
messages
Quarterly 3,000 4 12,000
7 Co-ordination &
Networking of all
stakeholders activities
1,500 12 18,000
8 Website development 2,500 2 5,000
9 Newspaper
advertisement in
different target and
messages /at least in
2 newspapers/
Any of
stakeholders
Monthly 500 24 12,000
10 Radio program: 1'
costs 20000 MNT,
20'=400000 MNT, it
will be repeated twice
in National Radio and
4 times in FM 106
Any of
stakeholders
Monthly 400 12 4,800
TOTALS: 166,750
RETA 7918 Final report Page 115
J. Institutional aspects
330. Water supply companies lose income when water is saved and apartments are
metered as the total volume delivered is decreased. Further at the moment the OSNAAG
charges a higher volume for unmetered customers than actually used by consumers.
How the reduction will affect overall income and costs should be detailed in a tariff
study. To cover the costs USUG and OSNAAG will need to increase tariffs. USUG and
OSNAAG should prepare a detailed tariff study to make a proposal how to develop the
tariff in the coming years to go to full cost recovery and prepare for cross-subsidies that
will allow investments in distribution into the Ger areas. The review of the tariffs should
be done on a regular basis (for instance every 3 years) thus making the costs for a fixed
period of time predictable and also have consumers prepared on regular reviews and
adjustments of tariffs.
331. Water metering is an issue which is of direct influence on the water consumption
of customers and should be implemented by OSNAAG’s within their authority as
apartment dwellers. Social surveys show that a large number of the unmetered
customers have financial and technical limitations to meter their apartment. OSNAAG
and the regulator suggest placing the responsibility for metering with OSNAAG. This is
common international practices and enjoys a large number of advantages such as
quality of water meters and no financial restraints for consumers.
332. Through a changed water tariff system consisting of two parts 1) a fixed amount
for water metering and 2) a rate for consumption, OSNAAG can arrange metering for all
customers and also maintain the quality of water meters by selecting a limited number
of good quality brands and by regular replacements (every 7 years). Assuming that the
average use of the water meters is 7 years and the costs for installation of 4 water
meters are 100 USD the costs per month are 1,2 USD (1,670 MNT) per household. To be
able to meter all customers, a total of 4 million USD is needed. To come up with the
initial investment OSNAAG should have a working capital available. This can be done
either through the investment program, MUB or OSNAAG themselves. As the financial
situation of OSNAAG has not been investigated the financial capacity of the organization
is not known. Once the tariff system is adjusted and meters are paid for in the water
tariff part of the investment can be covered through this fixed charge.
333. USUG is responsible for a (small) number of apartment buildings which should be
transferred to OSNAAG’s. Irrespective of the financial consequences (this would need to
be examined), transferring these assets to OSNAAG is a logical step. Operating
apartment buildings is not a core task of USUG and dilutes the focus in the organization.
Once the apartments are transferred USUG would then be able to focus entirely on the
development of water supply and wastewater collection and treatment facilities in the
city center, as well as in the Ger areas. Both USUG and OSNAAG would find such a
development logical for the mid-term.
RETA 7918 Final report Page 116
X. Capacity development/institutional strengthening
A. Introduction
334. Ulaanbaatar’s water demand and wastewater production is projected to increase
in the near future; infrastructure needs to be extended. Due to the ongoing urban and
industrial development in UB, water and wastewater is expected to double over the
coming years. Currently water consumption is appr. 55 Mm3 (2011) while, in the middle
scenario development of JICA, it is expected to increase to 94 Mm3 in 2030.
Infrastructure for water production, water distribution, wastewater collection and
treatment, need to extend into new residential and industrial areas, as well as ger areas,
to meet this growing demand and to adequately serve the growing population of the city
and its industries.
335. Within USUG in the last four years a lot of attention has been paid to capacity
development through a Water Operators Partnership (WOP) with VEI. It has laid the
foundation for USUG to become a stronger and well-performing water operator. The
WOP has (amongst others) contributed towards (i) improvement of USUG’s business
planning by introduction of a balanced scorecard system for evaluation of USUG’s
performance, along with training and coaching of managers and a business analyst to
effectively utilize this system; (ii) enhancement of USUG’s financial planning and
forecasting by introduction of financial projection models and tariff calculations; (iii)
improvement of energy efficient operation of two pumping stations; (iv) increased
USUG’s customer orientation through execution of an customer satisfaction survey that
was followed by several specific interventions such as a water metering pilot that
resulted in a reduction of water consumption; (v) strengthened skills of staff by
provision of assistance in computer modeling (GIS, water distribution, sewerage), water
quality analysis (laboratory), groundwater measurements with sensors and wastewater
treatment; (vi) a comprehensive reorganization of USUG’s internal organization per
January 1st 2011 that involved the establishment of new departments for project
management and investments and for business planning and asset management; and
(vii) the development of a vision on the institutional reform of the urban services sector,
as induced by decree 182 (GoM, May 14th 2008). Knowledge acquired through that WOP
and information gathered during implementation of RETA 7918 is the basis for the
recommendations made in this section on further capacity development and institutional
strengthening.
336. USUG currently faces challenges that need reinforcement of their human resource
capacity to properly address them. Not only the rise in water demand and wastewater
production (even beyond the current infrastructural capacities), also the demand for
performance orientation, intensified performance monitoring by the newly established
Water Services Regulatory Commission, and its actual weak financial position, urges
USUG to identify means to address these challenges. Even more important is how USUG
can play their role or take a lead in relevant water sector development such as
mitigating uncontrolled urban development, respond to increasing public awareness on
the relevance of the environment, take part in further regulation, transformation into
performance management, and improve decision making on transparent business
operations.
337. Capacity development is a major instrument to achieve and sustain improved
technical operations and create a financial healthy water operator that is able to at least
recover its operating cost. USUG expressed their demand to strengthen their capacity to
RETA 7918 Final report Page 117
improve its performance, and to prepare itself for future developments. Reference is
made to the ADB Report TA 7591 in which capacity development within USUG is
addressed in a discussion with VEI and USUG, who have been partners since 2007 in a
so-called Water Operator Partnership.
338. In the last four years USUG took advantage of the Water Operators Partnership
(WOP) with VEI. This partnership laid the foundation for USUG to become performance
sensitive and eager to improve. The WOP has (amongst others) contributed towards (i)
improvement of USUG’s business planning by introducing a balance scorecard system for
evaluation its operational performance, along with training and coaching of managers
and business analysts to effectively utilize this system; (ii) enhancement of USUG’s
financial planning and forecasting by introduction of financial projection models resulting
in fair tariff calculations; (iii) improvement of energy efficient operation of two pumping
stations; (iv) increased customer orientation of USUG through execution of an customer
satisfaction survey, (v) introduction of a water metering pilot that resulted in a
substantial per capita reduction of water consumption in apartment blocks; (vi)
strengthened operational staff in the use of computer modeling (GIS, water transport
&distribution, sewerage), water quality analysis (laboratory), groundwater
measurements with sensors and wastewater treatment; (vii) a comprehensive
reorganization of USUG as per January 1st 2011 that involved the establishment of new
departments for project management and investments and for business planning and
asset management. This all as an attempt to address the institutional reform of the
urban services sector, as induced by GoM Decree 182 (May 14th 2008).
339. During RETA 7918 VEI provided limited technical assistance and training to
USUG on the following subjects:
• Assistance in implementing the proposed activities. Technical experts from VEI,
RHDHV and local consultants were made available to assist and train their peer
colleagues and ensure adequate installation and operation of new equipment;
• Conduct of on-the-job training and instruction of individual staff related to the
project activities: PLC-programming, SCADA software development, database
management, installation of electrical equipment, etc. to ensure adequate O&M
of the newly installed equipment;
• Provision of support in project management, project logistics, and procurement.
340. This chapter will reflect on additional Capacity Development needs beyond RETA
7918. There is a need to establish a strong supportive Department on Business
Development and Asset Management as the future of USUG may be decided by their
response and plans (such as long term investment plan, strategic plan, water safety
plan, and various business plans) and proposals (tariff proposal, proposal for Ger
separation, water meter proposal OSNAAG-USUG, and proposals to address the licensing
of industrial wastewater discharges to CWWTP.
341. Based on the three pillars (i) the capacity development during the WOP with VEI,
(ii) the information obtained from various stakeholders (WSRC, MCUD and OSNAAG) in
the water sector, and (iii) the intensive discussions with USUG management,
recommendations were arrived at and laid down in this section on capacity development.
Capacity Development is addressed at three different layers: (a) the individual Capacity
Development, (b) the organizational Capacity Development, and (c) the institutional
Capacity Development.
RETA 7918 Final report Page 118
B. Individual Capacity Development
342. The current short period of the RETA project hardly gives opportunity to build
upon a long term coherent perspective for capacity development (Priority II). Essential is
the corresponding and supportive capacity development associated with the activities to
be undertaken during the RETA project period (Priority I) being (a) asset management
and data collection & analysis, (b) the establishment of an Operational Control Center
for water distribution and pressure management, (c) the renovation of water supply
infrastructure, (d) the rehabilitation of the central wastewater treatment plant CWWTP
and its industrial waste flows, and (e) the pilot to raise effectiveness of water demand
management by reducing NRW and increase water metering.
343. Although technical knowledge is generally available, USUG lacks a systematic
collection of data and capacity to analyze these to improve operations. Data is gathered
but is not systematically stored, verified, or made available to those who need it. This is
an important first step in the establishment of Asset Management principles within
USUG.
344. The OCC staff is in need for support in how to analyze and use available data for
long term analysis and optimization of water distribution. During the RETA 7918, OCC
staff was trained but this was by far insufficient. Further training is needed on;
- Operation and Maintenance of the SCADA system;
- Hydraulic network modeling and optimizing reservoir use;
- Pressure management (and energy reduction)
345. Operation and Maintenance of the CWWTP can be improved firstly through
improved process control and secondly by improving organizational aspects of the
CWWTP. Process control will be improved largely through the investment in the CWWTP
by the project and this should result in improved effluent quality. Secondly the
maintenance structures of the CWWTP should be improved. In general, more attention
should be paid to a systematic process of preventive maintenance and sufficient budget
should be made available for this. Maintenance should be properly planned, using
standardized equipment and through increased skills of the maintenance staff. A review
of staff efficiency is recommended. In the interim report of JICA (October 2012) some
recommendations have been made.
346. In order to more efficiently use the produced water a pilot will be started
together with OSNAAG to do a water balance study to reduce NRW. This pilot will
illustrate how USUG and OSNAAG have to work together on water loss reduction and
lower per capita water demand in UB city.
347. Finally, a MD program for the newly established management team is envisaged
to embark on -and embed- these project activities within a new corporate culture. It is
also recommended to start to prepare some staff members to acquire and strengthen
general competencies and prepare them for a leading role in USUG. This in particular
applies to English language courses and a 4 months education program at the NHL
University in the Netherlands on Water Services Management.
H. Organizational Capacity Development
348. For the long run a more substantive capacity development program is envisaged
to prepare USUG to become a performance oriented water utility. At the same time
USUG needs to reinforce their capacity to analyze data collected and transfer it into
RETA 7918 Final report Page 119
valuable strategic and policy documents to guide the way forward internally and in
relation to its stakeholder environment.
349. Reorganization of USUG. With support from Vitens Evides International USUG
restructured its organization and since summer 2012 a new management has been
appointed. In Figure 50 the new organizational chart is presented. The Steering
Committee (which includes representatives of MUB) appointed a new Director for USUG
and approved the organizational division into 5 departments and the corresponding
matrix structure. In consultation with USUG it is recommended that -for the time being-
this new structure will be given a chance to prove its added value. After one year it will
be evaluated aiming to further improve it, if necessary.
350. Support to the Human Resources (HR) department. Substantial personnel
changes took place in 2012 which, unfortunately, have resulted in a USUG brain drain.
To ensure that USUG will find a way to capacitate their organization and the staff, the
HR department needs professional training on how to recruit, train, evaluate, and
motivate staff, and ensure the corporate culture is favoring good performing employees
of USUG.
351. Training Center. To improve the capacity of staff, their motivation and skills in
relation to USUG’s targets, a training center was established in 2012 (with Koica
support). Different training modules are developed and conducted by USUG staff. In
relation to social development and customer relations training was provided for 664
water kiosk vendors (37.2% of total USUG employees), for 59 pump operators, 4
drinking water plumbers and 8 equipment repair man. Annually professional training is
conducted for 467 staff, who are paid by their professional grade. Twice per year,
certification is assessed according to the "Regulation of training and certification /
examination for professional graded employees of USUG". A total 34 persons were
upgraded and increased the number of professional staff by 7.3%. Training on HRM
(human resources management) was conducted for 15 managers in support by the
University of Ulaanbaatar. Basically the USUG Training Center focuses on workmanship
and in a lesser degree on managerial competencies.
352. Management Development. The Human Resources program of USUG for 2013-
2016 is under preparation. This will review the required competences of USUG staff and
check the capabilities of current staff against the required skills. From observations and
interviews there is a clear need for a Management Development program (MD) to
strengthen the recently appointed new managers of USUG and introduce them to basic
competencies of departmental and division management. The newly established USUG
management is eager to adjust the organizational and managerial culture for the further
development of USUG. This may be boosted by the MD program focusing on change
management.
353. Technical Business Development and Asset Management (TBDAM)
Department. In view of the various institutional challenges USUG wants to strengthen
their Department on Technical Business Development and Asset Management. The
TBDAM department has to develop its capacity how to advise on companywide legal,
business and policy matters, and take care for proper planning and reporting obligations
such as for investment planning, water safety planning, tariff calculation models,
strategic planning, performance management, asset management business cases, etc.
RETA 7918 Final report Page 120
Figure 50 New organizational structure of USUG as of 2012
I. Institutional Capacity Development
354. At institutional level, within a so-called “Enabling Environment”, many
developments take place in Mongolia that requires USUG to prepare itself for this
changing environment. Some of these developments are required as a consequence of a
fast growing economy and subsequent rise in urban and industrial water demand, the
rise of environmental awareness and concern of the public at large, the establishment of
a Water Services Regulatory Commission and the rising debts of the public sector.
355. Municipality of Ulaanbaatar (MUB). USUG is operating under direction of the
MUB. As the Property Department of MUB is the owner of the USUG assets it is also
RETA 7918 Final report Page 121
involved in USUG’s future investment planning, its financial arrangements, appointment
of management and with tariff increases for water and wastewater. This situation is not
conducive for the development of USUG into a strong utility ready to face future
investments. To improve efficiency of the daily operations it is recommended that USUG
obtain more autonomy.
356. Water Services Regulatory Commission. This newly established Commission
(June 2012) is still pioneering to identify its role and added value in the overall setting of
the water sector. Chapter 3 of Decree 182 ‘Public Service Sector’s Privatization and
Reformation Directive’, the WSRC is – amongst others- responsible for reviewing tariff
studies and proposals of water utilities in Mongolia and must decide whether the
proposed changes are affordable for the public and coherent with the objectives of the
utility. In addition, its role is to advice on legislation that improves utility performance
and on setting key performance indicators that connect tariffs to achievements. Decree
182 aims at an improvement of public services in Mongolia through a reform of the
public service sector, including the water and sanitation sector. USUG is very supportive
to this WSRC to encourage transparency, induce performance management, and to build
a capable and decisive mandatory body to ensure proper licensing and tariff setting for
water services.
Figure 51 Example of the separate regulatory framework
357. OSNAAG. Currently USUG is bulk water supplier to OSNAAG. Major part of USUG
water (~ 75%) is distributed to customers via OSNAAG; approximately half of this
supply is metered at household level. As required by law USUG campaigns to have all
households metered individually to reduce per capita water demand by more than 25%
and to have all institutions metered. Currently USUG is charging MNT 255 and 147 per
m3 for water and wastewater to OSNAAG, while OSNAAG and their contracted companies
charge tariffs to institutions that are nearly three times higher (MNT 770 and 420 per
m3, respectively). Serving institutions directly from USUG may therefore benefit its
business orientation as water service provider for institutional and industrial customers.
358. Industries. It is beyond any doubt that the performance of CWWTP is not
primarily affected by the state of its physical infrastructure (although key elements are
ready for replacement), but that the composition of the incoming sewage imposes
RETA 7918 Final report Page 122
serious problems to its performance. In particular the performance of the Khargia pre-
treatment facility (under MUB responsibility) is to be questioned. If essential disturbing
factors (hydraulic or organic peak loads, contamination with toxic elements) is not
properly regulated, the CWWTP is not (and will never be) able to perform to meet
standards in the already difficult climatic conditions (low temperatures).
359. A substantive technical assistance (TA) program is recommended that;
(i) provides input and assist MUB, USUG, WSRC, and other stakeholders in the
sector to develop suitable ways for institutional reform, and to decide the
most preferred/adequate options;
(ii) assists MUB and USUG to implement the chosen reform options (e.g. by
revision of laws and contracts, definition of a method for supervision with
indicators and targets for service delivery);
(iii) assists USUG to adjust its internal structure and procedures to support the
institutional changes and increase its corporate autonomy (e.g. by
enhancement of internal organization and HR procedures and strengthening
of (financial and operational) planning and management mechanisms through
professionalization of staff;
(iv) assists USUG to continuously improve the quality, efficiency and
sustainability of its daily operations (especially on by improving procedures
for operational control, training of operators in the OCC and reduce
operational costs and improve use of resources).
360. Business scope of USUG. The current assignment of USUG to run its water
services business-wise, does not match to their social duty to provide heavily -to be
subsidized- water services to Ger areas. This double focus prevents USUG to become a
financially healthy autonomous water utility that can be held accountable for the efficient
delivery of high quality and affordable water services to its customers in UB at a tariff
based on full cost recovery (including operational and capital cost). It is worth to
investigate the possibility to divert USUG into an autonomous water utility (USUG I)
focusing on the urban areas of UB supplying OSNAAG, industries and institutions with
water, and an USUG II that will serve Ger areas and be run by a municipal department.
In the ADB Report TA 7591 (October 2011) states that “the high capital and operational
cost, low household incomes, and low density of development make the provision of
sustainable urban services to Ger areas very challenging”. In other words: these
services may always have to rely on financial government support (even if USUG I would
provide their potable water for free to USUG II).
361. Tariff structure of USUG. USUG has to enlarge/strengthen its capacity to
develop tariff structure scenarios that may be attractive and acceptable to the
shareholder (MUB), to the WSRC and to the Fair Competition Commission while ensuring
the realization of a healthy financial status. With a tariff structure that fully covers ALL
(operational and capital (redemption & debt service) costs, reliance on government
support (and therefore political interference) may be reduced, creating more autonomy
for USUG. USUG can achieve a clear and pre-defined set of competitive water service
levels for its customers that can be transparent and be monitored by the WSRC
regulator and by the MUB.
RETA 7918 Final report Page 123
Figure 52 Current institutional arrangement of USUG
J. Summary and budget implications
362. A Capacity Development Program is arrived at that can cater for the
organizational and institutional changes that are envisaged, to equip USUG with the
right knowledge, skills and competencies to act not only as technical competent water
utility but also as player in the increasingly complex institutional context. Important is a
thorough understanding of the current (and desirable future) position of USUG within the
government setting. The long lasting relationship between USUG and Vitens Evides
International may provide a good take off for the challenges ahead. The following
aspects need to be taken into consideration:
- Provide input and assist MUB, USUG and other stakeholders in the sector to
develop suitable options for institutional reform, and to decide the most preferred
and adequate option (e.g. by revision of laws and contracts, roles and
responsibilities, modalities for partnerships, PPP models etc.);
- Organizational development with an emphasis on midterm business planning
processes to improve financial planning and tariff development;
- Training of higher and middle management in regards to utility management and
HR management based on performance indicators and output. For this a 2 year
Management Development program should be designed and executed.
RETA 7918 Final report Page 124
363. In order to transform USUG into a performance oriented and financial healthy
water utility it needs a concerted action of all key players in the institutional arena to
Act, to Behave, and to Commit themselves to these transformations. Only then USUG
can absorb and anchor the envisaged institutional changes, improve their service
delivery, their operational performance, and financial transparency. This will create a
perspective for USUG to develop itself into a more (financial) autonomous utility thereby
reducing their demand for financial government support, while improving their high
quality water services to the public and the economy at large. Training on performance
management is therefore preferably to take place in mixed composition of WSRC, MCUD
and USUG staff.
364. To cater for instrumental human capacity at USUG that is needed to support and
sustain the RETA project interventions a budget of € 196,000 (cost level 2013)would
suffice. This Capacity Development program will concentrate on (a) the establishment of
professional capacity at the Operational Control Center, (b) the strengthening of the
professional position of USUG in dealing with industrial waste flows (negatively) affecting
the performance of CWWTP, and (c) build upon the current financial and economic
capacity of staff in the Technical Business Development and Asset Management
Department on report writing, English communication, financial management, and finally
on business case development and introduction of asset management.
Table 39 Proposed budget for Capacity Development
Activity Number Unit cost Total (USD)
Support to Asset Management development within USUG 2 15,000 30,000
OCC development via intensive training and coaching 3 15,000 45,000
NRW pilot training and guidance USUG&OSNAAG 2 15,000 30,000
O&M of CWWTP and industrial licensing 1 15,000 15,000
MD program for USUG Management Team 1 20,000 20,000
Training 2 staff USUG on Water Services Management 2 13,000 26,000
Training Performance Management & Tariff Model 2 15,000 30,000
Total USD 196,000
365. For the long run a more structural remediation program is needed for the
departments already referred to in the ADB Report TA 7591 on: Ulaanbaatar Water and
Sanitation Services and Planning Improvement (October 2011). A very first assessment
indicates that over a period of 5 years (2015-2020) USD 1.2 million more could be
invested in the capacity of USUG (and wherever appropriate also staff from OSNAAG and
WSRC). This should be able to transfer USUG into the so desirable autonomous and
financially healthy water and sanitation service provider for UB city.
RETA 7918 Final report Page 125
XI. Proposed interventions and their estimated costs
Throughout the report, interventions were discussed, some proposed, while others were
rejected. All of the desirable interventions are listed below, together with their estimated
costs. All base costs were estimated at 2012 cost level, and then adjusted to a cost level
for 2014, the year during which the project implementation is expected.
Table 40 Cost estimate in US Dollars of items proposed
Intervention items 2012 2014
Base costs Rounded
1 Industrial Pumping station 686,300 800,000
2 Measuring in distribution 170,000 196,000
3 CWWTP 750,510 858,000
4 Meat Pumping station 188,500 223,000
5 Four Booster stations 52,000 63,000
6 Sharkhad Booster station 59,550 70,000
7 Tolgoit Booster station 35,500 42,000
8 OCC and communications 235,500 279,000
9 Nisekh Pumping station 134,350 156,000
10 Upper source Pumping station 50,000 56,000
11 Capacity Building 196,000 216,000
12 Sewer flow meters 130,000 136,000
13 Add distrib. measuring 520,000 604,000
14 NRW-related items 609,000 714,000
15 Central Pumping station 1,104,369 1,238,000
16 Spare parts 100,000 105,000
Total USD 5,021,579 5,756,000
366. The costs for capacity building were based immediately on a cost level of 2013.
367. The estimate exceeds the grant amount of USD 3.7 m made available by the
ADB. The higher number is presented nevertheless for a number of reasons: (i) more
budget could be made available, for example by USUG, or through a loan by the ADB;
(ii) prices could have been overestimated; (iii) it could be decided to delete some items
at a later stage; and (iv) bidders may decide to bid very low prices in the current
economic climate. But in the packaging schedule in the next chapter, a selection of the
most desirable items was made, with a total cost within the grant budget of USD 3.7
million.
RETA 7918 Final report Page 126
XII. Packaging
368. Several packaging schedules were reviewed and most of them rejected as being
to unpractical. In the end it was agreed with USUG to have four main works packages.
Emphasis has been on a number of aspects of USUG’s operations, SCADA upgrading,
pump renewal, distribution rehabilitation and the CWWTP operations. It was a logical
thought to split the works over packages that would be close to these four main issues.
This led to the following packages: A. SCADA improvements, B. Mechanical-electrical
works, C. Distribution operation improvements and NRW, and D. CWWTP improvements.
Because of its expected size and character, Package B was earmarked as an ICB. The
others would be more suitable for local contractors and were assumed to become NCB.
If, at a later stage, enough budget would be left, some equipment could be procured
under a shopping package E: Supply of equipment.
369. With the overall estimate exceeding the USD 3.7m budget the most desirable
interventions were arranged within the grant, while the less urgent interventions were
moved to a second schedule that could, possibly be financed out of a loan, or from
USUG’s regular budget. The expensive frequency converters for the Central Pumping
Station were included in a possible future loan package. This led to the following
packaging arrangement:
Table 41 Proposed packaging
Type Package USD (rounded) Cost level 2014
GRANT Package A: SCADA 1,169,000
Package B: Mechanical and electrical works 717,000
Package C: Distribution improvement and NRW 604,000
Package D: CWWTP 858,000
Capacity building 216,000
Sub-total 3,564,000
Contingencies 136,000
Grant total 3,700,000
LOAN Package B: Mechanical and electrical works Central 1,238,000
Package C: Distribution improvement and NRW 714,000
Package E: Equipment 240,000
Sub-total 2,192,000
Contingencies 219,000
Loan total 2,411,000
Overall total 6,111,000
370. The items earmarked for the grant, including a minimal amount for physical
contingencies, add up to USD 3.7m. A final choice will/may need to be made during the
time of evaluating the bids. If bids are priced very competitively, it could be decided to
finance also some equipment, now shown under loans, from the grant budget. For the
loan packages, a 10% physical contingency was added.
RETA 7918 Final report Page 127
371. For each of the four packages, additional details are shown below, with all
amounts rounded to the nearest thousand US Dollar...
Table 42 Details of the four Bid packages
Package A: SCADA USD (rounded) Cost level 2014
1 Industrial Pumping station 139,000
2 Various Locations in the Distribution Network 196,000
3 Meat Pumping station 223,000
4 Chingeltei, Selbe, Bayanhoshuu & Upper Booster stations 63,000
5 Sharkhad Booster station 70,000
6 Tolgoit Booster station 42,000
7 Operational Control Centre and communication issues 279,000
8 Nisekh Pumping station 156,000
Total 1,168,000
Package B: Mechanical and electrical works 2014 - Rounded
1 Industrial Pumping station
- main pumps 299,000
- Renovation of wells, incl. new pumps 323,000
- Flow meters and sensors 32,000
- Installation costs 7,000
2 Upper source Pumping station 56,000
Total 717,000
Package C: Distribution improvement and NRW 2014 - Rounded
1 Various Locations in the Distribution Network
- Construction of manholes 264,000
- Pressure control valves 125,000
- Pressure measuring sensors 10,000
- Electromagnetic flow meters 178,000
- Installation costs 26,000
Total 603,000
Package D: CWWTP 2014 - Rounded
1 Wastewater treatment plant CWWTP
- Selectors and Penstocks 189,000
- Diffusers 519,000
- DO-meters 64,000
- Sludge level sensors 13,000
- Repair and upgrading SCADA 73,000
Total 858,000
RETA 7918 Final report Page 128
XIII. Financial and Economic Analysis
A. Introduction
372. This chapter focuses on the financial and economic analysis of Ulaanbaatar Water
and Wastewater Operations Improvement project (RETA 7918) and is in line with the
following Asian Development Bank (ADB) guidelines: Financial Management and Analysis
of Projects Guidelines (2005) and Financial Due Diligence Methodology Note (2009).
373. The analysis will assess the current financial situation of USUG, the financial
viability of the project activities as linked to the components 1) Energy Saving and
operational control improvement, 2) Non-revenue water and consumption reduction and
3) Capacity development and institutions strengthening and finally the project’s impact
on the financial state of USUG as the beneficiary of this project.
374. The project will be financed by the Urban Environment Infrastructure Fund (UEIF)
under the Urban Financing Partnership Facility (UFPF) managed by the ADB and will
consist out of a grant of $ 3.7 million. The total of all identified project items are
estimated to cost more21 than the available grant. The excess may be financed under an
ADB-loan. As a grant agreement has not yet been set up it is assumed that payment for
project activities by ADB will be carried out after signed approval of the procurement
contracts by USUG is received.
375. Close cooperation with the Project Preparatory Technical Assistance (PPTA) team
was strived for since it is the intention that the final report will be incorporated in the
outputs of the PPTA Consultants.
376. After the elections in August 2012 USUG has gone through some changes of
employee positions. Therefore it is noted that although the abovementioned organization
scheme remains unchanged the responsible head of departments may have changed as
well as some other financial positions. This may have had an impact on the collection of
financial information for this report.
B. Financial State of USUG
i. Financial Indicators
377. The current financial performance of USUG up until Q3 of 2012 was investigated.
Year-to-date (YTD) figures for 2010 and 2011 and YTD figures up until 3rd Quarter of
2012 are shown in the table below. The exchange rate used is 1 USD = ₮1380.
21 Cost level 2014
RETA 7918 Final report Page 129
Table 43 USUG’s Balance Sheet 2010-12 (thousands of USD)
31-Dec-10 31-Dec-11 30-Sep-12
ASSETS Current Assets Cash 5,547 7,355 7,998
Accounts debts (Net sums) 2,739 3,045 3,252
Inventory 2,100 3,040 3,084
Prepaid costs 188 142 280
Total Current Assets 10,574 13,581 14,614
Noncurrent Assets Assets (Net) 34,339 48,190 55,172
Intangible Assets (Net) 50 55 245
Construction in process 2,191 210 348
Total Noncurrent Assets 36,579 48,455 55,765
TOTAL ASSETS 47,153 62,036 70,379
LIABILITIES Short term liabilities
Accounts payable 103 129 1,926
Tax payable 1 87 3
Other payable 150 194 98
Prepaid income 118 116 106
Total Short term liabilities 372 526 2,133
Long term debts Long term loan 27,641 45,130 52,052
Other long term loan 8,280 10,436 10,436
Total long term loan 35,922 55,566 62,488
Total Liabilities 36,294 56,091 64,622
Equity State Equity 634 634 634
Revaluation funds 21,106 21,080 21,080
Other Equity 11,536 11,820 14,703
Accumulated revenue (loss) -22,416 -27,589 -30,660
Total Equity 10,859 5,945 5,758
TOTAL LIABILITIES 47,153 62,036 70,379
378. The balance sheet shows that USUG is strongly dependent on long term loans for
its operations. The amount of equity is diminishing whereas the amount in total (long
term) liabilities is increasing over time. This means that USUG is getting highly
dependent on external funds and its operations are now less sustainable than several
years ago. This trend is troublesome for future development of USUG as a sustainable
organization which should be fit for the future. It is USUG’s intention to turn long term
debt into equity. However, USUG should also invest time and effort in sound financial
management in order to ensure that sub sequential losses will become a thing of the
past and that total cost recovery can be achieved. The two charts below show the
development of Sales out of Operations per year and the Segmentation of Sales in 2011.
RETA 7918 Final report Page 130
Figure 53 USUG’s sales (equivalent in million USD/year)
Figure 54 USUG’s sales as percentage for each sector
7.0
9.110.4
11.212.4
13.415.0
17.4
0
2
4
6
8
10
12
14
16
18
20
2004 2005 2006 2007 2008 2009 2010 2011
USDm/yr Sales from Operations (USDm/yr)
0%
10%
20%
30%
40%
50%
60%
70% 60.5%
34.1%
3.4% 2.0%
2011 Income per segment
RETA 7918 Final report Page 131
Table 44 USUG’s Income statement (thousands of USD)
2010 2011 Q1-Q3 '12
Operational Income / Costs
Sales 15,014 17,426 13,456
Costs of Sales -14,679 -16,148 -14,163
Total of Sales 335 1,278 -706
Operational Costs -2,506 -2,357 -2,507
Operational Result -2,171 -1,080 -3,214
Non-operational results 6,721 -3,845 200
Earnings before Tax 4,550 -4,925 -3,013
Income Tax 0 -97 -13
Net Earnings 4,550 -5,022 -3,027
379. The difference in net earnings between 2010 and the following years 2011 and
2012 is mainly due to an individual tariff increase as of August 2010 of 50% (for
domestic customers). This has led to a significant increase of earnings in 2010. In 2011
on the other hand the net earnings were negative due to the foreseen salary increases
of the personnel. Not only did the salary increase with a one-off increase of ₮80,000 in
February but another salary increase of 25% was conducted in June of that same year.
Together with exchange rate losses this salary increase impacted the net earnings of
2011 negatively, which were insufficiently covered by the tariff increase.
380. Current tariffs for water supply and wastewater are shown in the table below:
Table 45 USUG’s tariffs for water supply and wastewater
Type Tariff (MNT/m3)
Water supply Wastewater
As of Feb. 2012 As of April 2010
Industries 554.55 600.00
Institutions 554.55 300.00
OSNAAG Companies 255.45 147.00
Individual Apartments 286.20 166.80
Ger Area 909.00 -
381. USUG is unable to prepare financial projections for the year 2013, as a proposal
for a new tariff increase is still being drafted and awaiting approval of the Municipality
Tariff Committee. Although tariffs have been increased in the past and although they
had a positive effect on USUG’s financial position, the current tariffs are insufficient for a
full cost recovery, especially after the large 2012 salary increases.
382. The current proposal for the adjustment of the tariffs is to only increase tariffs for
the Industrial customers, as shown in the table below. It is based on a fixed base tariff
per month (dependent on the diameter of the water inlet pipe) and on a rate which
varies with the annual water consumption.
RETA 7918 Final report Page 132
Table 46 USUG’s proposed 2013 tariffs for industrial customers # Pipe
Dia
No. of industries
Basic Tariff in ₮/month
(unmetered)
Fixed costs (₮/month) for
Industry
Water Consump -tion (m3/year)
A B C D=B*C E
1 15
283 7,637.9 2,161,526 233,890
2 20
529 7,763.6 4,106,944 444,394
3 25
722 23,732.8 17,135,082 1,854,113
4 32
792 21,000.3 16,632,238 1,799,701
5 0.4
668 33,976.1 22,696,035 2,455,843
6 50
517 57,256.6 29,601,662 3,203,072
7 65
4 96,055.4 384,222 41,575
8 80
401 105,610.9 42,349,971 4,582,512
9 100
192 335,307.6 64,379,059 6,966,188
10 150
91 635,578.7 57,837,662 6,258,370
11 200
24 5,150,694.3 123,616,663 13,376,039
Total
4,223
380,901,063 41,215,697
Figure 55 USUG’s earnings (before interest and tax)
383. The accumulated net result in 2011 was ~6.8 billion MNT (USD 4.9m) negative.
The operational result was 1.5 billion MNT (USD 1.1m) negative and the non-operational
result was 5.3 billion MNT (USD 3.8m) negative. The difference can be explained by the
positive impact a tariff increase had on the 2010 results which, however, quickly
disappeared when steep salary increases quickly started influencing the 2011 results.
384. Three loans are currently registered as long term liability on the Balance sheet of
USUG (USIP I, Spanish Loan and USIP II). Until now USUG has neither paid interest nor
amortization on these loans pending a decision by the UB Municipality on a World Bank
suggestion to turn the loans and accumulated interest into equity.
-3.75
-7.13
4.55
-4.93
-8
-6
-4
-2
0
2
4
6
2008 2009 2010 2011
USD mio Earning (before Interest & Tax)
RETA 7918 Final report Page 133
Figure 52 USUG’s cash position (equivalent in million USD)
385. The chart above shows that, despite the not so stellar financial performance,
USUG is flush with cash. Cash in hand was the equivalent of USD 7.5 million, at the end
of 2011. Reason for this positive cash flow is that the operational result (before
depreciation) is still positive and not all the cash is used for investments. Furthermore,
as stated above, USUG has not paid any debt service on the three loans (USIP I and II
and Spanish loan).
ii. Operational Indicators
386. Some operational indicators of USUG, as reported in the 2011 annual report, are
shown in the table below.
Table 47 USUG’s Operational indicators (2011)
USUG's Operational Indicators (2011)
Indicator
Number of employees 1,455
Revenue (billion MNT ) 24.5
Expenditure (billion MNT ) 31.3
Billed water (million m3/year) 43
Direct Customers 3,500
Average water consumption (l/day)
Apartment dwellers 204.7
Ger dwellers (Truck supplied) 6.9
Ger dwellers (connected to pipeline) 8.4
Average tariff (MNT/m3) Water Wastewater
Apartment 255.5 147
Institutions 554.6 300
Factory 554.6 600
Source: USUG's financial report 2011
0
1
2
3
4
5
6
7
8
2005 2006 2007 2008 2009 2010 2011
Cash flow and balance (Equivalent in USD mio)
Net Cash flow in USD mio Cash Balance in USD mio
RETA 7918 Final report Page 134
Summary Water Supply and Wastewater Statistics (2011)
Parameter
Water source or well fields 4
Water kiosks in Ger area 567
Truck supplied 313
Connected to pipeline 254
Total length of sewerage pipeline 151,7 km
Length of water supply pipes in Ger area 173 km
Extracted water in m3 '000 per day 151,0 m3
Treated wastewater in m3 '000 per day 154,5 m3
Treatment efficiency 64-90%
Source: USUG's financial report 2011
iii. Balanced Score Card
387. In order to monitor USUGs progress, VEI made an effort to introduce a balanced
score card in 2010. This Balanced Score Card enables management of USUG to closely
monitor key performance indicators of USUG against set targets. These indicators are
financial, commercial, operational and human resources related. Although the score card
itself has fallen out of favor and is no longer in use, USUG keeps track of many
indicators and reports them diligently to the management on a monthly basis. The table
below shows a number of key performance indicators (kpi) and their values in the past
years.
Table 48 Key Performance Indicators monitored by USUG
USUG KEY PERFORMANCE INDICATORS
Unit 2008 2009 2010 2011 Q1-3 2012
Financial Performance Indicators
F1 Net result ( before tax) 000 MNT -5,174,610 -9,835,328 6,278,815 -6,796,773 -5,376,592
F2 Net cash flow 000 MNT -748,457 2,132,968 1,674,084 2,494,326 2,303,960
F3 Operating ratio
1.09 1.02 1.05 1.04 1.27
F4 Av. billed tariff dr. water MNT/m3 243 274 308 346 351
F5 Av. billed tariff w.water MNT/m3 135 157 176 197 200
Commercial Performance Indicators
C1 Collection ratio % 95% 96% 92% 98% 98%
C2 Average debt per client Months 2.4 2.3 2.2 2.0 1.9
C3 Av. consumption dr. water ( I /c/d) 268.2 261.2 236.2 209.5 204.9
C4 Av. billed tariff dr. water MNT 151 144
143 150 149
C5 Av. billed tariff w.water MNT 311 543 337 842 727
Operational Performance Indicators
O1 NRW water supply % 20.3% 20.4% 19.7% 21.8% 19.4%
O2 NRW wastewater % 21.6% 23.7% 23.8% 24.7% 22.8%
O3 Energy consumption kWh 58.38 67.70 68.01 66.92 68.70
O4 Readiness of equipment % 97.3% 97.8% 98.0% 99.1% 95.5%
O5 Breakdowns per month No. 193 88 157 89 84
RETA 7918 Final report Page 135
USUG KEY PERFORMANCE INDICATORS
Unit 2008 2009 2010 2011 Q1-3 2012
Human Resource and Operational Indicators
D1 Drinking water quality
0.5 8.9 0.6 0.2 0.2
D2 Treatm. Eff. CWWTP % 87% 87% 75% 77% 76%
D3 Number of employees # 1348.6 1381.8 1421.4 1456.6 1483.3
D4 Sales per employee 000 MNT 1056.7 1142.5 1214.9 1375.8 1394.9
D5 Petrol consumption Liters 938,395 1,110,993
1,090,061 995,928 962,630
C. The proposed Project
388. The financial component of the project aims at establishing an investment
program for water and wastewater operational improvement services for USUG. In the
past the Government of Mongolia and the Municipality of Ulaanbaatar have received
technical and financial assistance in the form of capacity building and project
preparation/implementation grants, and loans from various international donors,
including form the ADB, the World Bank, JICA, Spanish Govt, Dutch Govt, etc.
389. The ADB has committed itself to a USD 4 mio grant to USUG, of which USD 3.7
mio is available for investments described in this report. Costs of interventions
exceeding this amount could be financed from an ADB-loan or by USUG itself.
390. The proposed investments as recommended by VEI for the pumping stations
which include PS Upper and Central will have a significant reduction on energy costs for
USUG. It can lower the energy costs for pumping at the four main pumping stations with
25% and, if PS Upper and Central are combined, a reduction of energy costs of even
32% can be achieved. As indicated earlier USUG does not plan to fit all of the required
investments into the grant facility. However this could be financed through either a loan
from the ADB or a commercial loan. The impact of a commercial loan on the IRR was
investigated for that part of the required investments that cannot be financed from the
USD 3.7m grant. Altogether, the following scenarios for energy efficiency at the pumping
stations were investigated:
1. Only investing in energy saving measures at the Industrial PS and the Meat PS ;
2. Investing in energy saving measures at all four main PS at Central, Upper,
Industrial and Meat, with investments at Central from a loan and those for the
other PS from the USD 3.7 m grant (option E in chapter V above);
3. The same scenario as 2, but with an increased flow from Central and a reduced
flow by Upper (option F in chapter V above). It should be noted that while this
option will save more energy than any other option and will have the highest IRR,
USUG has not agreed with it for technical and administrative reasons. Also in this
scenario, the investments at Central would need to be made through a loan.
The energy savings that can be achieved and which are used in the IRR calculations are
summarized in the table below.
RETA 7918 Final report Page 136
Table 49 Energy reduction by distribution pumping Scenario Investments in distribution pumping Energy reduction
in USD/year Energy
reduction at the 4 PS
1 Industrial & Meat PS only 26,527 2.2%
2 Upper PS-Central-Industrial-Meat PS 292,917 24.9%
3 As Scenario 2, but with more water pumped by Central and less by Upper (option F in chapter V)
373,314 31.7%
391. The proposed investments and the way of financing are shown in the Table 50
below. A distinction is made between the grant facility which amounts up to USD 3.7
million (in accordance with the Urban Environment Infrastructure Fund) and the
remaining part which USUG chooses not to include in the grant facility for the time
being. It is assumed for calculation purposes that this part will be financed by a
commercial loan or by USUG. For the IRR calculation scenarios, only investments for the
water supply components (grant and loan) were taken into account, as shown in the
table below. It should be noted that the investments for scenarios 2 and 3 are exactly
the same.
Table 50 Investment costs per scenario
Type Package Costs
Scenario 1 Scenario 2+3
in USD
Ind/Meat Option E + F
GRANT Package A: SCADA 1,169,000
1,169,000 1,169,000
Package B: Mech/electr works 717,000
661,000 717,000
Package C: Distrib improvm/NRW 604,000
604,000 604,000
Package D: CWWTP 858,000
Package E: Equipment 0
Capacity building 216,000
216,000 216,000
Sub-total 3,564,000
2,650,000 2,706,000
Contingencies 136,000
101,000 103,000
Grant total 3,700,000
2,751,000 2,809,000
LOAN Package B: Mech/electr works 1,238,000
1,238,000
Package C: Distrib improvm/NRW 714,000
714,000 714,000
Package E: Equipment 240,000
Sub-total 2,192,000
714,000 1,952,000
Contingencies 219,000
71,000 195,000
Loan total 2,411,000
785,000 2,147,000
Overall total 6,111,000
3,536,000 4,956,000
392. The internal rates of return were calculated using the following assumptions:
- Annual inflation rate for energy costs set at 5%;
- Annual general inflation rate set at 4%;
- Calculations assumed for a 20-year period;
RETA 7918 Final report Page 137
- Regarding loan amount the Commercial Interest Reference Rate (CIRR) is set
at 2.32% (according to USD loans > 8.5 yrs, source: OECD);
- Repayment of loan is 10 years with a grace period of 2 years;
Further reference is made to Annex 5 in which the calculation tables for each scenario
are shown. The table below summarizes the calculated IRR for each scenario.
Table 51 Overview of IRR of each scenario
Scenario Option Ch. V Description IRR
1 A+B Industrial & Meat only 8.7%
2 E Upper, Central, Industrial, Meat 16.5%
3 F As 2, but Upper less water, Central more 19.6%
393. The IRR of each scenario is satisfactory, even for scenario 1 with only minimal
energy saving at the main Pumping Stations. For some serious energy saving, as per
scenarios 2 and 3, the IRR is very high, despite the fact that for the adjusted pumping at
Central USUG has opted for the expensive option with frequency controllers, rather than
the cheaper option of changing one pump that was contemplated before and despite the
fact that for this more expensive option a loan will be required. This calculation makes
clear that it is of added value for USUG to invest in Upper and Central regarding
distribution pumping and in an extra NRW program even when the additional investment
is financed by a commercial loan.
D. Recommendations for financial reforms
394. It is essential that the tariffs within USUG cover all costs. It is to be expected that
the proposed tariff adjustment which is now pending approval of the Municipality Tariff
Committee will be executed during 2013. It remains important to monitor if the tariffs
are high enough to pay not only for the operational costs but also the interest and non-
operational costs. It is estimated that because of the salary increases that were
apparent the last two years within Mongolia, the income of a household in Ulan Bator
has increased significantly. It is therefore expected that the envisaged increase of the
water tariff is affordable for households and an increase of the tariff is deemed to be
appropriate, therefore.
395. Furthermore the outstanding repayments and interest of the loans of USUG need
either to be paid or to be transferred by the MUB into investment funding. It is of
importance that the financial department keeps monitoring the key performance
indicators in order to provide management of USUG with the necessary information in
order to set up measures for improvement of operations of USUG.
396. How to make USUG profitable again is not an easy task. The 2010 tariff increase
gave a temporary relief and profit, but salary increases quickly used up all benefits.
Assuming a gradual increase in tariffs, in line with overall inflation in Mongolia and a
slower increase in costs would bring USUG slowly back on the path to profitability. The
graph below shows that by 2017, USUG could break even and make profits thereafter.
Saving energy, as proposed in this report, would help, but only little, despite the high
IRR that can be achieved. Applying all cost saving measures would only help to achieve
profitability halfway 2016, 6 months earlier, as shown in the chart below. It should be
noted that, in the scenarios shown in the chart, debt service (which may, or may not,
RETA 7918 Final report Page 138
need to be paid by USUG) was not yet included. Including debt service would require
drastic additional tariff measures.
The graph below only goes up to 2021 as it remains uncertain how the tariff reform and
debt service will evolve over time. However it shows the positive impact of the project
on the operations of USUG.
Figure 56 Chart with future Revenues of USUG for all Scenarios
RETA 7918 Final report Page 139
XIV. Long-term investments
A. Background
397. Long-term master planning was not part of the RETA 7918 project. At the request
of the ADB, the study team reviewed the needs and possibilities for long-term invest-
ments and based itself thereby mainly on the JICA-supported “Study on the Strategic
Planning for Water Supply and Sewerage Sector in Ulaanbaatar City in Mongolia”22. This
report shows the large investments that would be of interest for any possible future
loans and for the financial planning of USUG and the city administration.
398. In addition, possibilities for smaller downstream investments were identified,
mainly for the improvement of operations at USUG.
B. Priority Investments
399. The JICA-study report identifies water resources development, water supply
extensions and improvements, sewerage and wastewater treatment, as well as water
supply and sanitation projects in the Ger areas.
400. Most of the components identified in the JICA-report are included in a priority
project proposal, of which the investment costs are summarized below.
Table 52 Priority project components Water Supply & Wastewater management
Description Details
USD
mio ~2020 ~2025 ~2030
Water Source
Development Surface dam development 375 188 188
Underground dam development 49
24 25
Water supply Rehab distribution 35 35
Strengthen w/s facilities 154 75 49 30
Wastewater CWWTP 586 145 57 384
Nisekh WWTP 101 49 10 42
Industrial area/transfer to Emeelt 39 39
Reuse of effluent / sludge 58
58
TA Capacity building CWWTP 4 4
Sewer rehab 79 12 12 55
Sewer improvement 31 27 4
Sewer extensions 132 28 28 76
TA Industrial wastewater 4 4
Ger improvement Pipe connection to kiosks 28 2 10 16
Discharge pipes from sub-centers 28 11 8 9
Water supply & sewerage dev. 570 190 190 190
Totals Water Supply 613 110 261 243
Wastewater 1,034 308 111 615
Ger areas 626 203 208 215
Grand Total 2,273 621 580 1,073
401. The total investments required are well over USD 2 billion over a period of about
20 years, of which almost half is earmarked for wastewater collection and treatment.
22 Interim report, dated October 2012
RETA 7918 Final report Page 140
The largest single investment identified is for the Central Wastewater Treatment Plant
CWWTP, with a capital requirement of almost USD 600 million.
402. Much of the investment earmarked for the CWWTP is for a large-scale renewal
around the year 2030, or even later. As stated in paragraphs 215-217, an entirely new
wastewater treatment plant should probably best be designed and built in the coming 5-
10 years, rather than in 20-30 years. Thus, the large investments for the CWWTP would
likely be required much earlier than shown in the table above.
C. Investments in improved operations (near future)
403. Some smaller investments, mainly for operational improvements, are
summarized in the table below. They are all related to USUG’s water supply operations.
Table 53 Possible investments in operational improvements (next 10 years)
Location Description USD mio
Industrial PS Renewal electrical installations 1.0
Upper Frequency converters 1.3
Booster stations Pumps and frequency converters 1.5
Distribution system Measuring equipment 2.0
Pressure and flow control 1.0
Smart metering at large customers 1.5
Asset management and spare parts 0.5
Operation Control Centre Real time control software 0.3
Pressure control/reservoir operation 0.5
Expansion of SCADA 0.5
Total operational improvement next 10 years 10.1
RETA 7918 Final report Page 141
XV. Design and Monitoring Framework
A. Benefits
404. The proposed project will have significant benefits for USUG’s control over the
water and wastewater systems. Once the network is separated in pressure zones,
SCADA has been installed on the different booster stations and staff has been trained
accurate control will ensure optimal operations. Staff of the OCC will have the tools and
with training the ability to optimize pressure and flow.
405. The same applies for the CWWTP. With SCADA installed and improved technical
equipment the environmental benefit will be substantial. As shown in table below.
406. NRW benefits will amount to a better use of resources. It is to be expected that
the level of NRW for USUG will decrease from 19 to 14 % or an equivalent of 2.75 mio
m3/year. This also saves energy costs for pumping and reduces carbon output.
407. Once all apartments are metered and average customer consumption is actually
at the targeted 130 l/c/d then another 6.20 m3/year can be saved. Adding to the
reduction of needed resources. This will however have no financial benefit as the actual
amount paid by unmetered customers is at the moment 285 l/c/d whereas their
consumption is 255 l/c/d.
Table 54 Benefits
Item Grant Costs
(USD)
Benefits
Financial
(USD/year)
Environmental
SCADA
1,169,011
115,914 USD
Energy saving of 5 % overall
which is equal to 1,817,750
kWh/year or 1,222 tonnes
CO2/year.
Energy saving
660,969 (Industrial)
Meat 15,434 USD
Industrial 11,094 USD
Upper Source
Central
242,041 kWh/year or 163
tonnes CO2/year
173,967 kWh/year or 117
tonnes CO2/year
1,252,775 kWh/year or 842
tonnes CO2/year
2,924,712 kWh/year or 1,967
tonnes CO2/year
CWWTP 857,764
Cost benefit is limited
to easier operations
Reduced output of COD and
impact on the environment
Industrial
metering
Increased income
Improved influent at the
CWWTP
NRW
management
605,000
121,000 USD
Reduced water losses of 2.75
mio m3/year and 1.86 mio
kWh/year, reduction of 1,251
tonnes/year CO2 emission
RETA 7918 Final report Page 142
Item Grant Costs
(USD)
Benefits
Financial
(USD/year)
Environmental
Water demand Water metering
program
No financial benefit Reduced water consumption of
6.2 mio m3/year and 4,2 mio
kWh/year, reduction of 2,823
tonnes/year CO2 emission
Capacity building 216,000 No Financial benefit Capacity of the staff improved
B. Design and monitoring framework
408. To ensure the results that are foreseen in the project will also be achieved a
design and monitoring framework (DMF) is prepared. Based on the original design
framework prepared in 2011. In Appendix 4 the DMF is presented.
409. The Urban Environment Infrastructure Fund (UEIF) under the Urban Financing
Partnership Facility( UFPF) will provide a grant investment to finance;
(i) operations improvement of the central wastewater treatment plant (CWWTP)
and drinking water supply network;
(ii) introduction of local control and central operational control systems;
(iii) implementation of a domestic and industrial water metering programme; and
(iv) a program for Non-Revenue Water (NRW) and water consumption reduction
for apartment dwellers.
410. The investments aim to deplete the need of primary energy resources for water
and wastewater systems operations, save water at both customer and supply level
ensuring more sustainable use of available water resources, decrease wastewater
pollution and promote a more reliable and more efficiently run utility.
411. Through selection of these KPI’s the technical performance and result of the
project can be measured and monitored. These being the energy consumption per m3
water distributed to customers, the average consumption per customer, the influent and
effluent quality of the CWWTP (influent saying something about the effectiveness of the
Khargia and industrial wastewater), compliance with flow and pressure set points in the
network, the NRW percentage.
RETA 7918 Final report Page 143
Appendix 1 Proposed Improvements – water supply
The following list gives a description per location of the activities to be undertaken. All
the activities consist of supply and installation unless otherwise stated.
A. Pumping Stations
Industrial Pumping station23
• Installation of a complete PLC logic controller system with I/O and SCADA
control system and PC for local SCADA control, the installation shall be
installed in a cabinet inside the pumping station.
o Complete programming of the SCADA system including all elements:
▪ Main pumps including PID controller for pressure set point
▪ All flow, pressure, reservoir levels and temperature sensors
▪ Database and graphics capable with minimum 1 month buffet
of all data
▪ Refer to the signal list for the parameters.
▪ SCADA must comply with the existing SCADA software in USUG
• Replacement of measuring equipment for Flow, Pressure and reservoir level in
the pumping station and the two reservoirs
• Replacement of four main pumps and electric motors complete with shielded
cables including installation and connection to the existing two frequency
controllers in the pumping station. A selector for switching between pumps
and converter must be installed to switch between two pumps for each
frequency converter.
• A complete telemetry system via fiber optic cables for communication
between the main PLCPLC in the pumping station and the server in the OCC
department in the main office of USUG. A fiber optic connection point is
present in the building next to the pumping station about 250 meters away
from the main building.
• Supply and installation of 16 new submersible pumps in the existing
boreholes for energy efficient water production.
• For each of the 16 boreholes supply and installation of control panel with PLC
for borehole control.
• Installation of fiber optic cables between all boreholes and the pumping
station building for communication between boreholes and main PLC for pump
regime.
• Replacement of an existing chloride dosing system by a fully automated
dosing system based upon existing chlorine gas cylinders. A dedicated
ventilated space for this installation is present at the pumping station.
• Reconstruction of pipelines and control valves of pumping station for energy
saving reasons refer to the attached drawing of this reconstruction.
Nisekh Pumping station
• Supply and Installation of a complete power MCC with main switch and fuses
to be installed in a new cabinet
• Supply and Installation of three new soft starters for the main pumps
• Installation of a complete PLC logic controller system with I/O and SCADA
control system and PC for local SCADA control, the installation shall be
installed in a cabinet inside the pumping station.
23 Two frequency controllers for the main pumps at Industrial station have already been
installed in the Industrial pumping station.
RETA 7918 Final report Page 144
o Complete programming of the SCADA system including all elements:
▪ Main pumps including PID controller for pressure set point.
▪ All flow, pressure, reservoir levels and temperature sensors
▪ Database and graphics capable with minimum 1 month buffet
of all data
▪ Refer to the signal list for the parameters.
▪ SCADA must comply with the existing SCADA software in USUG
• Replacement of measuring equipment for Flow, Pressure and reservoir level in
the pumping station and the two reservoirs
• A complete telemetry system via GPRS for communication between the main
PLCPLC in the pumping station and the server in the OCC department in the
main office of USUG.
• For each of the 16 boreholes supply and installation of control panel with PLC
for borehole control.
• Installation of fiber optic cables between all boreholes and the pumping
station building for communication between boreholes and main PLC for pump
regime.
• Replacement of an existing chloride dosing system by a fully automated
dosing system based upon existing chlorine gas cylinders. A dedicated
ventilated space for this installation is present at the pumping station.
• Supply and installation of three new drainage pumps including float switch.
Sharkhad Booster station
• Supply and Installation of a complete power MCC with main switch and fuses
to be installed in a new cabinet
• Installation of a complete PLC logic controller system with I/O and SCADA
control system and PC for local SCADA control, the installation shall be
installed in a cabinet inside the pumping station.
o Complete programming of the SCADA system including all elements:
▪ Main pumps including PID controller for pressure set point.
▪ All flow, pressure, reservoir levels and temperature sensors
▪ Database and graphics capable with minimum 1 month buffet
of all data
▪ Refer to the signal list for the parameters.
▪ SCADA must comply with the existing SCADA software in USUG
• Replacement of measuring equipment for Flow, Pressure and reservoir level in
the pumping station and the reservoir
• A complete telemetry system via GPRS for communication between the main
PLC in the pumping station and the server in the OCC department in the main
office of USUG.
• A complete telemetry system via GPRS for communication between the main
PLC in the pumping station and the Sharkhad reservoir.
Tolgoit Reservoir and Booster station
• Supply and Installation of a complete power MCC with main switch and fuses
to be installed in a new cabinet
• Installation of a complete PLC logic controller system with I/O and SCADA
control system and PC for local SCADA control, the installation shall be
installed in a cabinet inside the pumping station.
o Complete programming of the SCADA system including all elements:
▪ Main pumps including PID controller for pressure set point.
▪ All flow, pressure, reservoir levels and temperature sensors
▪ Database and graphics capable with minimum 1 month buffet
of all data
▪ Refer to the signal list for the parameters.
▪ SCADA must comply with the existing SCADA software in USUG
RETA 7918 Final report Page 145
• Replacement of measuring equipment for Flow, Pressure and reservoir level in
the pumping station and the reservoir
• A complete telemetry system via GPRS for communication between the main
PLC in the pumping station and the server in the OCC department in the main
office of USUG.
Meat pumping station
• A complete telemetry system via fiber optic cables for communication
between the main PLC in the pumping station and the server in the OCC
department in the main office of USUG. A fiber optic connection is present in
west booster station about 3500 meters away from the main building. This
work includes excavation of the cables.
• For each of the 16 boreholes supply and installation of control panel with PLC
for borehole control.
• Installation of fiber optic cables between all boreholes and the pumping
station building for communication between boreholes and main PLC for pump
regime.
Upper Source pumping station
• A complete telemetry system via cable and satellite for communication
between the main PLC in the pumping station and the server in the OCC
department in the main office of USUG. For the pumping station to the top of
a hill about 500 meters by cable from these continued by GPRS to the main
office.
• Supply and installation of satellite communication.
Chingeltei, Selbe, Bayanhoshuur upper and lower booster stations, total four
(4) locations
• Extension of the existing PLC for two way communication between the station
main PLC and the main office OCC for control from the OCC. This extension
needs to be compatible with the existing GE Fanuc PLC.
B. Distribution Network of Ulaanbaatar
Construction of 20 control valves for the distribution network
• Construction of manholes with lid see drawing for specifications
• Installation of a PLC logic controller system with I/O and SCADA control
system the installation shall be installed in a cabinet inside the manhole.
o Complete programming of the SCADA system including all elements:
▪ Refer to the signal list for the parameters.
▪ SCADA must comply with the existing SCADA software in USUG
• Replacement of measuring equipment for Flow, Pressure and reservoir level in
the pumping station and the reservoir
• A complete telemetry system via GPRS for communication between the main
PLC in the pumping station and the server in the OCC department in the main
office of USUG.
• Installation of pressure control valves in the manhole
• Installation of two pressure sensors in the main pipe on both sides of the
valve.
RETA 7918 Final report Page 146
Construction of 10 new measuring points in the distribution network
• Construction of manholes with lid see drawing for specifications
• Installation of a PLC logic controller system with I/O and SCADA control
system the installation shall be installed in a cabinet inside the manhole.
o Complete programming of the SCADA system including all elements:
▪ Refer to the signal list for the parameters.
▪ SCADA must comply with the existing SCADA software in USUG
• Installation of measuring equipment for flow and pressure
• A complete telemetry system via GPRS for communication between the main
PLC in the pumping station and the server in the OCC department in the main
office of USUG.
Reconstruction of 10 measuring points in the distribution network
• Installation of a PLC logic controller system with I/O and SCADA control
system the installation shall be installed in a cabinet inside the manhole.
o Complete programming of the SCADA system including all elements:
▪ Refer to the signal list for the parameters.
▪ SCADA must comply with the existing SCADA software in USUG
• A complete telemetry system via GPRS for communication between the main
PLC in the pumping station and the server in the OCC department in the main
office of USUG.
C. Operational Control Centre (OCC) at USUG’s main office
• Equipment for dispatch centre control and monitoring
o Renewal OCC server (RAID 4)
• Personal computers, display’s see specifications
• Office network improvement and expansion
o Renewal office network server for the Integrated Data Base(RAID 2)
• Software for computer managed maintenance program
o Upgrade of the existing MP2 Maintenance program
• Telemetry to network connection equipment for pumping station control
• Reprogramming of the existing SCADA software in the OCC office to include
all the parameters from the pumping stations in this tender.
• Equipment for Engineering station for energy saving scenario’s
o PC with software and connection to server
RETA 7918 Final report Page 147
Appendix 2 Proposed improvements - wastewater
A. Proposed improvements at the CWWTP
• The existing SCADA system needs to be repaired and reprogrammed. This
means some equipment has to be replaced and the software needs repair.
• Supply and installation of a new PC for the SCADA system to be installed in
the WWTP control room and a second PC with SCADA connection in the head
engineer’s office in the WWPT.
• Replacement of 20 existing Dissolved oxygen sensors in the aeration tanks
• Supply and installation of 5 ultrasonic sludge level sensors in the secondary
settlers, these new to be installed sensors need to be integrated in the
existing SCADA software
• Supply and installation of analysing equipment for several parameters the
effluent stream of the treatment plant
• Construction of a selector in the treatment plant
• Replacement of existing old air diffusers in the aeration tanks and replace
them with 10,000 new diffusers24.
B. For measurement of industrial wastewater flows
• Supply of 10 portable wastewater flow meters for measuring in industrial
sewers
24 Replacing the old diffusers with 6,000 larger air diffusers is still under consideration. Using the larger
diffusers could save time of installation and money.
RETA 7918 Final report Page 148
Appendix 3 Largest industrial water users
This appendix provides details on several important industries.
Distilleries/Vodka/Beer
Name of company MCS Spirit bal
buram Jem international APU-2
Type of industry Vodka Vodka and beer Alcohol
Water use
m3/month (av
Jan-Aug)
3,595 55,014 156,484
Phone 88102000 98133133 91113656
Flows-Incoming-
USUG USUG USUG USUG
Well No No Yes (not using)
Process that use
water: For products
For products (transfer
from well. Dari-Ekh) Products
1 Washing bottles Washing bottles Washing bottles
2 Cleaning Cleaning Cooling
3 Cooling Cleaning
… Domestic Domestic Domestic
Wastewater
coming from each
process
Any treatment Mechanical Mechanical
Effluent to sewer
Amount of
wastewater
(m3/month)
3,595 (Jan-Aug) 55,014 (Jan-Aug) 166,562 (Jan-Aug)
Effluent Test From USUG No From USUG
Time of test Every month Every month
Date last sample:
COD (mg/l) 967
Suspended solids 28.5
Ammonia (mg/l) 15 0.24
Can we install a
meter somewhere Yes Yes Yes
Diameter of
wastewater pipe
(mm)
150 150 250
RETA 7918 Final report Page 149
Name of company MCS Spirit bal
buram Jem international APU-2
Location of
wastewater
manhole
Outside of the
industry (RS)
Outside of the industry
(RN)
Outside of the industry
(R)
Name of employer
Oyunbaatar
(technology
engineer)
Galdan (plumb) Batbayar (plumb)
Date 2-Oct-12 2-Oct-12 2-Oct-12
Note:
Capacity: About
20000
bottles/day.
Pumping station of
Cashmer holding
company-CWWTP
Industry have 2 water
supply. USUG-using
for technology, well
(Dari-Ekh)-for
products. 3
wastewater line-
domestic, beer
industry and vodka
industry
Water: 75 % for
products. 25 % for
technology. Resued
water. Alcohol:15000
l/day
Tanneries
Name of company MLG (Surai invest) Elire Fure
Type of industry Tannery Tannery
Water use m3/month (av
Jan-Aug) 6,153 7,972
Phone 91911600, 88894188 99111889, 99229130
Flows-Incoming-USUG USUG USUG
Well No No
Process that use water: All wet technology All wet technology
1 Washing Washing
2 Soaking Soaking
3 Cleaning Cleaning
… Domestic Domestic
Wastewater coming from each
process All wet technology All wet technology
Any treatment Mechanical Mechanical
Effluent to sewer
Amount of wastewater
(m3/month) 6200 (Jan-Aug) 8020 (Jan-Aug)
Effluent Test From USUG From USUG
Time of test Every month Every month
Date last sample:
COD (mg/l)
RETA 7918 Final report Page 150
Name of company MLG (Surai invest) Elire Fure
Suspended solids
Ammonia (mg/l)
Can we install a meter
somewhere Yes Yes
Diameter of wastewater pipe
(mm)
Location of wastewater manhole
Name of employer Batbayar (technology
engineer)
Purevnyam,
Buyankhishig
(technology engineer)
Date 1-Oct-12 1-Oct-12
Note:
To process 600 skin one
week. Industry has 2
wastewater pipes.
(chrome-10% and
sulfide-90%)
Capacity: low season-
2500 skin/day, high
season skin/day.
Industry has 2
wastewater
pipe.(chrome-10%
and sulfide-90%) but
effluent mixed
Intestine cleaning
Name of company Gufan and
Gunua EECC
Mandakh
keizing
Type of industry Gut processing Gut processing Gut
processing
Water use m3/mth (av
Jan-Aug) 200-300 500-600 400-450
Phone 99155197 99907192,
99922130 88722468
Flows-Incoming-USUG USUG _ USUG
Well No well _
Process that use water: Gut processing Processing Gut
processing
1 Cleaning Domestic cleaning
2 sorting
3
…
Wastewater coming from
each process
Washing and
cleaning primary processing screen
Any treatment Have a screen Filter
Effluent to sewer
Amount of wastewater
Effluent Test From USUG From USUG From USUG
RETA 7918 Final report Page 151
Name of company Gufan and
Gunua EECC
Mandakh
keizing
Time of test every month every month every month
Date last sample:
COD (mg/l) 4012.8 729.6 748.8
Suspended solids
Ammonia (mg/l) 870 106 31
Can we install a meter
somewhere Can not yes Can not
Diameter of wastewater
pipe (mm) 100 100 150
Location of wastewater
manhole
Name of employer Master
Saruulchimeg
Employee
Oyunchimeg
Master
Davaanyam
Date 8-Oct-12 8-Oct-12 9-Oct-12
Note: 12000 tonne
products pre day
Cashmere/Wool
Name of company Khanbogd
Cashmere
Capital
factor Monfiya Jin korona
Cashmer
holding
Type of industry
Wool,
cashmere
washing
Wool,
cashmere
washing
Wool wash
Wool
cashmere
washing
Wool and
cashmere
Water use
m3/month (av
Jan-Aug)
12.2 50 1500 3000 8875
Phone 11635697 99087880 99113718 99998368 88002524
Flows-Incoming-
USUG USUG _ _ _ USUG
Well _ Well Well Well Yes, with
meter
Process that use
water: Washing
Washing
wool and
cashmere
Washing
wool
Washing
wool and
cashmere
1 Domestic Domestic Domestic Domestic Washing
2 Coloring
3 Cleaning
… Domestic
Wastewater
coming from each
process
Washing and
domestic
Technology
and
domestic
wastewater
Technology
and
domestic
wastewater
All wet
technology
Any treatment Screen bar
filter Screen bar mechanical mechanical Mechanical
Effluent to sewer 5-6 tonne
RETA 7918 Final report Page 152
Name of company Khanbogd
Cashmere
Capital
factor Monfiya Jin korona
Cashmer
holding
Amount of
wastewater
(m3/month)
14,736 (Jan-
Aug)
Effluent Test From USUG From USUG From USUG From USUG From USUG
Time of test every month every
month
every
month
every
month Every month
Date last sample:
COD (mg/l) 576 499.2 710.4 8400
Suspended solids
Ammonia (mg/l) 490 16 175 2353
Can we install a
meter
somewhere
Can not Can not Yes
Diameter of
wastewater pipe
(mm)
120 150 150 150 300
Location of
wastewater
manhole
Have a
pumping
station
Outside of
the industry
(RS)
Name of
employer
Employee
Erdenebaatar
Ulambat
and
Ganbold
HR
Enkhtaivan Gankhuyag
Altankhuu
(technology
engineer)
Date 9-Oct-12 9-Oct-12 10-Oct-12 10-Oct-12 2-Oct-12
Car wash
Name of company Khanbogd
Cashmere Khoty Chand traid
Type of industry Wool, cashmere
washing Car wash Car wash
Water use
m3/month (av
Jan-Aug)
12.2 500-600 650
Phone 11635697 99182620 94224321,
99183976
Flows-Incoming-
USUG USUG USUG USUG
Well _ No _
Process that use
water: Washing Car wash Car wash
1 Domestic Washing Washing
2 Cleaning Cleaning
3
…
Wastewater coming
from each process
Washing and
domestic Washing Washing
RETA 7918 Final report Page 153
Name of company Khanbogd
Cashmere Khoty Chand traid
Any treatment Screen bar filter Mechanical Screen, filter
Effluent to sewer
Amount of
wastewater From USUG
Effluent Test every month
Time of test
Date last sample:
COD (mg/l)
Suspended solids
Ammonia (mg/l)
Can we install a
meter somewhere Can not yes can not
Diameter of
wastewater pipe
(mm)
120 100
Location of
wastewater
manhole
Name of employer Employee
Erdenebaatar
administrator
Ariunbold
manager
Tsagaan
Date 9-Oct-12 8-Oct-12 8-Oct-12
Note 15 tonne
That car wash
center: 40-50 car
per day
RETA 7918 Final report Page 154
Appendix 4 Design and Monitoring Framework
Design Summary
Performance Targets/Indicators
Data Sources/Reporting Mechanisms
Assumptions and Risks
Impact Ulaanbaatar water and wastewater systems has a lower carbon footprint, better benefit to poor people, has a lower impact on available water resources.
By 2019 Greenhouse gas emission of the water and wastewater system is reduced by 15% City needs for new water resources is decreased by saving 25,000 m3 of water per day Water service coverage is extended in peri-urban areas 25,000 low income household Underground contamination is reduced
ADB and international sector assessment and progress report on Millennium Development Goals Ministry of Water Resources reports Business reports of USUG
Assumptions Investments and regulations enable improvement of urban and environmental infrastructures Macroeconomic factors continue to be robust Risks Political instability Infrastructure investments fall short of demands posed by rapid urban development and in-migration
Outcome Improved delivery, financial sustainability, operation and maintenance of water service in Ulaanbaatar City
By 2019 NRW in USUG decreased from 19% in 2012 to 14% in 2017 and 12 % in 2019 Water consumption in City formal area deceased from 262 l/c/d in 2009 to 160 l/c/d in 2017 and 130 l/c/d in 2019 By 2015 Energy consumption of water and wastewater scheme decreased of 15% Operation cost decreased by 5% Pollution from central WWTP to the Tuul River is reduced by 15% Solution for beneficiary reuse of sludge through biogas collection is developed
National statistics office, household socioeconomic survey Urban sector report of government and international organizations Water consumption measurement from USUG and OSNAAG Financial and business reports of USUG
Assumptions Pilot programs are extended to the whole City in cooperation with OSNAAG Awareness program is well understood by the population Strong government commitment from Government and agencies Risk Lack of effective government support and coordination among agencies
Outputs Operational control and management of the water distribution and wastewater schemes are improved
By 2015 Operational control equipment and procedures of 4 water pumping stations are upgraded 10.000 Diffusers are installed and 5 selectors are in place in the aeration tanks
2 new sludge return pumps and 2 frequency controllers
Tender documents and invoices for equipment Documentation of the Regulatory Committee, legislation of National Government Approval letters on proposed tariffs by the MUB, Regulator and relevant agencies such as the Fair competition agency
Assumptions All concerned government agencies provide full support to the TA All required information is available on time Risk Inadequate support and performance of the government and stakeholders
RETA 7918 Final report Page 155
Design Summary
Performance Targets/Indicators
Data Sources/Reporting Mechanisms
Assumptions and Risks
NRW and water consumption reduction program is implemented Capacity developed and institutions strengthened
are installed
20 dissolved oxygen sensors, control valves and actuators for the aeration system are installed
Measurement and monitoring devices are installed Water meters are installed in 200 apartments in selected pilot area Wastewater regulation and measuring equipment is in place to cater for appropriate wastewater tariffs Level of non-revenue water is accurately measured Program for reduction of non-revenue water is implemented in the selected pilot areas Proposal to install water meter to 41,000 unmetered apartments in cooperation with OSNAAG is developed Awareness program developed and implemented 2 years training program, with the target of 30% female participation, is developed and implemented Regulatory, institutional and price reforms for water supply and wastewater treatment are approved by the Government
Appendix 5 IRR tables
Table 55 Internal Rate of Return Scenario 1: Energy saving at Industrial and Meat PS only
Financial sustainability (in USD, 1 USD = ₮1380)
project year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
NON-FINANCIAL OPERATIONS
Cash inflow
Reduced energy costs - 26,527 27,853 29,246 30,708 32,244 33,856 35,549 37,326 39,192 41,152 43,210 45,370 47,639 50,021 52,522 55,148 57,905 60,800 63,840 67,032
Reduced NRW - 121,000 125,840 130,874 136,109 141,553 147,215 153,104 159,228 165,597 172,221 179,110 186,274 193,725 201,474 209,533 217,914 226,631 235,696 245,124 254,929
Benefits resulting from SCADA - 115,914 120,551 125,373 130,387 135,603 141,027 146,668 152,535 158,636 164,982 171,581 178,444 185,582 193,005 200,726 208,755 217,105 225,789 234,820 244,213
Total cash inflow - 263,441 274,244 285,492 297,204 309,400 322,098 335,321 349,089 363,426 378,355 393,900 410,088 426,946 444,500 462,780 481,816 501,641 522,285 543,785 566,174
Cash outflow grant 1):
Package A. SCADA 1,169,000
Package B. Mech. & Electrical works 661,000
Package C. Distribution improvement & NRW 604,000
Capacity Building 216,000
Contingencies 101,000
Cash outflow loan:
Package B: Mechanical and electrical works -
Package C: Distribution improvement and NRW 714,000
Contingencies 71,000
Total cash outflow 3,536,000 - - - - - - - - - - - - - - - - - - - -
1) Excluding CWWTP components
Cash balance before financing (3,536,000) 263,441 274,244 285,492 297,204 309,400 322,098 335,321 349,089 363,426 378,355 393,900 410,088 426,946 444,500 462,780 481,816 501,641 522,285 543,785 566,174
Accumulated cash balance (3,536,000) (3,272,559) (2,998,315) (2,712,823) (2,415,619) (2,106,219) (1,784,121) (1,448,800) (1,099,712) (736,286) (357,931) 35,969 446,057 873,003 1,317,503 1,780,283 2,262,099 2,763,740 3,286,025 3,829,810 4,395,984
FINANCIAL OPERATIONS
Cash inflow
Grant by ADB (Urban Environment Infrastructure Fund) 2,751,000
Loan International Banks 785,000 - -
Total cash inflow 3,536,000
Total cash inflow for repayment 785,000 - - - - - - - - - - - - - - - - - - -
Cash outflow loan:
Repayment - - 78,500 78,500 78,500 78,500 78,500 78,500 78,500 78,500 78,500 78,500 - - - - - - - - -
Financing costs: fees 9,813 - -
Financing costs, Interest 18,212 18,212 16,391 14,570 12,748 10,927 9,106 7,285 5,464 3,642 1,821 - 0 0 0 0 0 0 0 0 0
Outstanding loan 785,000 785,000 706,500 628,000 549,500 471,000 392,500 314,000 235,500 157,000 78,500 0 0 0 0 0 0 0 0 0 0
Total cash outflow 28,025 18,212 94,891 93,070 91,248 89,427 87,606 85,785 83,964 82,142 80,321 78,500 0 0 0 0 0 0 0 0 0
PROJECT CASH BALANCE (2,779,025) 245,229 179,353 192,423 205,956 219,972 234,492 249,536 265,125 281,283 298,033 315,400 410,088 426,946 444,500 462,780 481,816 501,641 522,285 543,785 566,174
NPV (250,463)
Financial IRR 8.7%
Accumulated cash balance (2,779,025) (2,533,796) (2,354,442) (2,162,020) (1,956,064) (1,736,091) (1,501,599) (1,252,064) (986,938) (705,655) (407,622) (92,222) 317,867 744,812 1,189,312 1,652,092 2,133,909 2,635,549 3,157,835 3,701,619 4,267,794
Interest on accumulated cash balance 64,473 58,784 54,623 50,159 45,381 40,277 34,837 29,048 22,897 16,371 9,457 2,140 - - - - - - - - -
Accumulated cash balance (2,843,498) (2,657,053) (2,532,323) (2,390,059) (2,229,484) (2,049,789) (1,850,134) (1,629,646) (1,387,418) (1,122,506) (833,929) (520,668) (110,580) 316,366 760,865 1,223,645 1,705,462 2,207,102 2,729,388 3,273,172 3,839,347
RETA 7918 Final report Page 157
Table 56 Internal Rate of Return Scenario 2: Energy saving at Upper, Central, Industrial & Meat PS
Financial sustainability (in USD, 1 USD = ₮1380)
project year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
NON-FINANCIAL OPERATIONS
Cash inflow
Reduced energy costs - 292,917 307,563 322,941 339,088 356,042 373,845 392,537 412,164 432,772 454,410 477,131 500,987 526,037 552,339 579,956 608,953 639,401 671,371 704,940 740,187
Reduced NRW - 121,000 125,840 130,874 136,109 141,553 147,215 153,104 159,228 165,597 172,221 179,110 186,274 193,725 201,474 209,533 217,914 226,631 235,696 245,124 254,929
Benefits resulting from SCADA - 115,914 120,551 125,373 130,387 135,603 141,027 146,668 152,535 158,636 164,982 171,581 178,444 185,582 193,005 200,726 208,755 217,105 225,789 234,820 244,213
Total cash inflow - 529,831 553,953 579,187 605,584 633,198 662,087 692,309 723,926 757,005 791,613 827,822 865,706 905,344 946,818 990,214 1,035,622 1,083,137 1,132,856 1,184,884 1,239,329
Cash outflow grant 1):
Package A. SCADA 1,169,000
Package B. Mech. & Electrical works 717,000
Package C. Distribution improvement & NRW 604,000
Capacity Building 216,000
Contingencies 103,000
Cash outflow loan:
Package B: Mechanical and electrical works 1,238,000
Package C: Distribution improvement and NRW 714,000
Contingencies 195,000
Total cash outflow 4,956,000 - - - - - - - - - - - - - - - - - - - -
1) Excluding CWWTP components
Cash balance before financing (4,956,000) 529,831 553,953 579,187 605,584 633,198 662,087 692,309 723,926 757,005 791,613 827,822 865,706 905,344 946,818 990,214 1,035,622 1,083,137 1,132,856 1,184,884 1,239,329
Accumulated cash balance (4,956,000) (4,426,169) (3,872,216) (3,293,028) (2,687,444) (2,054,246) (1,392,159) (699,851) 24,076 781,081 1,572,693 2,400,515 3,266,221 4,171,564 5,118,382 6,108,596 7,144,218 8,227,355 9,360,211 10,545,095 11,784,424
FINANCIAL OPERATIONS
Cash inflow
Grant by ADB (Urban Environment Infrastructure Fund) 2,809,000
Loan International Banks 2,147,000 - -
Total cash inflow 4,956,000
Total cash inflow for repayment 2,147,000 - - - - - - - - - - - - - - - - - - -
Cash outflow loan:
Repayment - - 214,700 214,700 214,700 214,700 214,700 214,700 214,700 214,700 214,700 214,700 - - - - - - - - -
Financing costs: fees 26,838 - -
Financing costs, Interest 49,810 49,810 44,829 39,848 34,867 29,886 24,905 19,924 14,943 9,962 4,981 - 0 0 0 0 0 0 0 0 0
Outstanding loan 2,147,000 2,147,000 1,932,300 1,717,600 1,502,900 1,288,200 1,073,500 858,800 644,100 429,400 214,700 0 0 0 0 0 0 0 0 0 0
Total cash outflow 76,648 49,810 259,529 254,548 249,567 244,586 239,605 234,624 229,643 224,662 219,681 214,700 0 0 0 0 0 0 0 0 0
PROJECT CASH BALANCE (2,885,648) 480,021 294,424 324,639 356,017 388,612 422,481 457,684 494,283 532,343 571,932 613,122 865,706 905,344 946,818 990,214 1,035,622 1,083,137 1,132,856 1,184,884 1,239,329
NPV (258,119)
Financial IRR 16.5%
Accumulated cash balance (2,885,648) (2,405,627) (2,111,203) (1,786,564) (1,430,548) (1,041,936) (619,454) (161,770) 332,514 864,856 1,436,788 2,049,910 2,915,616 3,820,959 4,767,777 5,757,991 6,793,613 7,876,750 9,009,606 10,194,490 11,433,819
Interest on accumulated cash balance 66,947 55,811 48,980 41,448 33,189 24,173 14,371 3,753 - - - - - - - - - - - - -
Accumulated cash balance (2,952,595) (2,528,385) (2,282,941) (1,999,750) (1,676,922) (1,312,483) (904,373) (450,441) 43,842 576,185 1,148,117 1,761,238 2,626,944 3,532,288 4,479,105 5,469,319 6,504,942 7,588,078 8,720,934 9,905,818 11,145,147
RETA 7918 Final report Page 158
Table 57 Internal Rate of Return Scenario 3: Energy saving at Upper (less water), Central (more water), Industrial and Meat PS
Financial sustainability (in USD, 1 USD = ₮1380)
project year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
NON-FINANCIAL OPERATIONS
Cash inflow
Reduced energy costs - 373,314 391,980 411,579 432,158 453,766 476,454 500,276 525,290 551,555 579,133 608,089 638,494 670,418 703,939 739,136 776,093 814,898 855,643 898,425 943,346
Reduced NRW - 121,000 125,840 130,874 136,109 141,553 147,215 153,104 159,228 165,597 172,221 179,110 186,274 193,725 201,474 209,533 217,914 226,631 235,696 245,124 254,929
Benefits resulting from SCADA - 115,914 120,551 125,373 130,387 135,603 141,027 146,668 152,535 158,636 164,982 171,581 178,444 185,582 193,005 200,726 208,755 217,105 225,789 234,820 244,213
Total cash inflow - 610,228 638,370 667,825 698,654 730,921 764,696 800,048 837,053 875,788 916,335 958,780 1,003,212 1,049,725 1,098,418 1,149,395 1,202,762 1,258,633 1,317,127 1,378,369 1,442,488
Cash outflow grant 1):
Package A. SCADA 1,169,000
Package B. Mech. & Electrical works 717,000
Package C. Distribution improvement & NRW 604,000
Capacity Building 216,000
Contingencies 103,000
Cash outflow loan:
Package B: Mechanical and electrical works 1,238,000
Package C: Distribution improvement and NRW 714,000
Contingencies 195,000
Total cash outflow 4,956,000 - - - - - - - - - - - - - - - - - - - -
1) Excluding CWWTP components
Cash balance before financing (4,956,000) 610,228 638,370 667,825 698,654 730,921 764,696 800,048 837,053 875,788 916,335 958,780 1,003,212 1,049,725 1,098,418 1,149,395 1,202,762 1,258,633 1,317,127 1,378,369 1,442,488
Accumulated cash balance (4,956,000) (4,345,772) (3,707,402) (3,039,577) (2,340,923) (1,610,002) (845,306) (45,258) 791,795 1,667,583 2,583,918 3,542,698 4,545,910 5,595,635 6,694,054 7,843,448 9,046,210 10,304,843 11,621,970 13,000,339 14,442,827
FINANCIAL OPERATIONS
Cash inflow
Grant by ADB (Urban Environment Infrastructure Fund) 2,809,000
Loan International Banks 2,147,000 - -
Total cash inflow 4,956,000
Total cash inflow for repayment 2,147,000 - - - - - - - - - - - - - - - - - - -
Cash outflow loan:
Repayment - - 214,700 214,700 214,700 214,700 214,700 214,700 214,700 214,700 214,700 214,700 - - - - - - - - -
Financing costs: fees 26,838 - -
Financing costs, Interest 49,810 49,810 44,829 39,848 34,867 29,886 24,905 19,924 14,943 9,962 4,981 - 0 0 0 0 0 0 0 0 0
Outstanding loan 2,147,000 2,147,000 1,932,300 1,717,600 1,502,900 1,288,200 1,073,500 858,800 644,100 429,400 214,700 0 0 0 0 0 0 0 0 0 0
Total cash outflow 76,648 49,810 259,529 254,548 249,567 244,586 239,605 234,624 229,643 224,662 219,681 214,700 0 0 0 0 0 0 0 0 0
PROJECT CASH BALANCE (2,885,648) 560,418 378,841 413,277 449,086 486,335 525,091 565,424 607,410 651,126 696,654 744,080 1,003,212 1,049,725 1,098,418 1,149,395 1,202,762 1,258,633 1,317,127 1,378,369 1,442,488
NPV (257,384)
Financial IRR 19.6%
Accumulated cash balance (2,885,648) (2,325,230) (1,946,389) (1,533,113) (1,084,026) (597,691) (72,601) 492,823 1,100,233 1,751,359 2,448,013 3,192,093 4,195,305 5,245,030 6,343,448 7,492,843 8,695,605 9,954,238 11,271,365 12,649,734 14,092,222
Interest on accumulated cash balance 66,947 53,945 45,156 35,568 25,149 13,866 1,684 - - - - - - - - - - - - - -
Accumulated cash balance (2,952,595) (2,446,123) (2,112,438) (1,734,730) (1,310,793) (838,324) (314,918) 250,506 857,916 1,509,042 2,205,696 2,949,776 3,952,988 5,002,713 6,101,131 7,250,526 8,453,288 9,711,921 11,029,048 12,407,417 13,849,905