The Study of Water Use and Treated Wastewater Discharge Charge

The Study of Water Use and Treated Wastewater

Discharge Charge

Treated Wastewater Discharge Charge

Final Report

Submitted to

Federal Democratic Republic of Ethiopia

Awash Basin Authority MelkaWerer, Ethiopia

Prepared By School of Civil and Environmental Engineering Addis Ababa Institute of Technology (AAiT) Addis Ababa University P. O. Box. 385, Addis Ababa, Tel. + 251- 111-232437

October, 2018 Addis Ababa

Awash Basin Authority: The Study of Water Use and Wastewater Discharge Charge

WP4: Treated Wastewater Discharge Charge (WP4)

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Generated by:

1. Dr. Agizew Nigussie (Team Leader)

2. Dr. Assie Kemal

3. Ato Zerihun Getahun

4. Ato ZerihunAbate

Approved by: Dr. Geremew Sahilu



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Contents 1 INTRODUCTION ............................................................................................................................................. 5

1.1 BACKGROUND .................................................................................................................................................. 51.2 THE PROBLEM ................................................................................................................................................... 61.3 GOALS AND OBJECTIVES OF THE STUDY .................................................................................................................. 61.4 STRUCTURE OF THE REPORT ................................................................................................................................. 7

2 LITRATURE REVIEW ........................................................................................................................................ 8

2.1 WATER POLLUTION CONTROL .............................................................................................................................. 82.2 ENVIRONMENTAL AND HEALTH EFFECTS OF WATER POLLUTION ................................................................................... 82.3 PRINCIPLES WASTEWATER MANAGEMENT ............................................................................................................ 102.4 EFFLUENT CHARGE .......................................................................................................................................... 12

2.4.1 Guiding principles for effluent charges .................................................................................................. 132.4.2 Effluent Charges: Fines or Taxes ............................................................................................................. 132.4.3 Effluent Charge per Unit of Pollution ..................................................................................................... 14

2.5 INTERNATIONAL EXPERIENCE WITH EFFLUENT CHARGES .......................................................................................... 152.6 WATER POLLUTION CHARGING SYSTEMS ............................................................................................................... 172.7 COMPLIANCE AND MONITORING ......................................................................................................................... 19

3 METHODOLOGY ........................................................................................................................................... 20

3.1 DESCRIPTION OF THE STUDY AREA ...................................................................................................................... 203.1.1 Location ................................................................................................................................................. 203.1.2 Physiography .......................................................................................................................................... 213.1.3 Climate ................................................................................................................................................... 213.1.4 Landcoverandsoil ................................................................................................................................... 233.1.5 Population and Socio-Economy .............................................................................................................. 243.1.6 Water pollution and control ................................................................................................................... 25

3.2 CONCEPTUAL FRAMEWORK ............................................................................................................................... 253.1 THE PROPOSED CHARGE MODEL ........................................................................................................................ 273.3 CHARGING PARAMETERS ................................................................................................................................... 303.4 CLASSIFICATIONS OF THE INDUSTRIES AND TOWNS .................................................................................................. 303.5 DATA COLLECTION AND ANALYSIS ........................................................................................................................ 31

3.5.1 Data collection instrument development process .................................................................................. 313.5.2 Method of Data Analysis ........................................................................................................................ 363.5.3 Findings .................................................................................................................................................. 37

4 CHARGE SETTING ......................................................................................................................................... 42

4.1 INTRODUCTION ............................................................................................................................................... 424.2 FIXED FEE ...................................................................................................................................................... 42

4.2.1 Elements of the fixed fee ........................................................................................................................ 424.2.2 Treated wastewater dischargers ............................................................................................................ 43

4.3 VARIABLE FEE ................................................................................................................................................. 444.3.1 Variable fee valuation approaches ........................................................................................................ 444.3.2 Abatement Cost Estimation ................................................................................................................... 46

4.4 SITE AND ECONOMIC FACTORS ............................................................................................................................ 494.5 AFFORDABILITY AND WILLINGNESS TO PAY ............................................................................................................. 494.6 PROPOSED EFFLUENT CHARGE ............................................................................................................................ 50

4.6.1 Fixed Feed .............................................................................................................................................. 504.6.2 Variable Fee ........................................................................................................................................... 50



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4.6.3 Total charge ........................................................................................................................................... 52

5 IMPLEMENTATION CONSIDERATIONS ........................................................................................................... 54

6 CONCLUSION AND RECOMMENDATION ....................................................................................................... 55

REFERENCES ......................................................................................................................................................... 56

List of Figures and Tables

Table 2-1 Water pollution charge scheme in OECD countries .................................................................... 18

Table 3-1 Categories of towns .................................................................................................................... 31

Table 3-2 Conventional MWWTPS in Addis Ababa ..................................................................................... 34

Table 3-3 Industries Visited for Data Collection ......................................................................................... 36

Table 3-4 Wastewater characteristics of Heineken Brewery ...................................................................... 39

Table 3-5 Effluent discharge limits .............................................................................................................. 39

Table 4-1 Estimated annual costs for water quality management related activities ................................. 43

Table 4-2 Number of large and medium manufacturing industries ........................................................... 44

Table 4-3 Details of the wastewater treatment plants considered in the study ........................................ 47

Table 4-4 Unit price for removal of pollutants ........................................................................................... 48

Table 4-5 Site factors for different segment of the main Awash River ...................................................... 49

Table 4-6 Distribution of fixed fee among dischargers ............................................................................... 50

Table 4-7 Proposed effluent standards ....................................................................................................... 51

Figure 3-1 Location map of Awash River Basin ........................................................................................... 20

Figure 3-2 Physiography of Awash Basin .................................................................................................... 21

Figure 3-3 Land cover map of Awash Basin ................................................................................................ 24

Figure 3-4 Conceptual Framework for Treated Wastewater Discharge Charge ......................................... 26



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1 INTRODUCTION

1.1 Background

This report focuses on setting of charges for treated industrial and domestic wastewater

discharges. In Ethiopia there are a number of existing industrial establishments of different

types. There are also ongoing and planned projects for development of industrial parks and

major urban centers. The existing and planned industries and major urban centers require a

large amount of water for the various processes and generate huge amounts of wastewater.

The practice of wastewater management so far is very poor as the majority of industries and

urban agglomerations discharge their untreated effluents into the environment. It is therefore

timely to protect and sustain our freshwater resources through the use of appropriate

economic and legal instruments. In Ethiopia, use of economic instruments like water supply and

wastewater discharge charges, have policy and legal backings.

In order to be sustainable, wastewater management does not only have to provide for the

protection of human health and environment, but also has to do this in a manner that is

economically and socially feasible in the long-term. Economic instruments, such as service fees

and effluent charges can complement the use of institutional, regulatory, and technical tools to

foster sustainability in wastewater management.

A basic principle of economic instruments used in environmental management is the

“polluter-pays-principle”. This principle states that anyone whose actions pollute or

adversely affect the environment should pay the cost for remedial action. Consequently,

activities which are less damaging will incur a lesser cost, and therefore be more

economically justifiable.

The water policy of Ethiopia recognizes water as an economic good that requires proper

protection and management. In line with this, the Awash Basin Authority, in consultation with

the Ministry of Water, Irrigation and Electricity, has commissioned a study for setting water use

and wastewater discharge charges.



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1.2 The problem Though the water policy of Ethiopia regards water as economic good, absence of functional

water and wastewater discharge charges make its implementation far from reality. There is a

need to develop and enforce sustainable charge structures for the various water uses and

effluent discharges to ensure protection and use of the limited water resources of the country.

Considering the ongoing and planned urban and industrial developments of the country, it is

timely to set and implement charges for domestic and industrial wastewater effluent

discharges.

1.3 Goals and Objectives of the Study

1. Raise revenues and recover environmental remediation costs:

The study aims at setting wastewater charge structure that contributes to the protection of our

limited freshwater resources through the following three mechanisms.

2. Set incentives for water conservation and pollution prevention: This provides an economic

incentive for water users to use water carefully, efficiently, and safely in order to save water

resources and prevent pollution. If discharge of industrial wastewater into the sewerage

system or the environment is linked with increasing wastewater bills, people might change

their behavior or industrial processes in order to produce less wastewater to save costs.

The most obvious reason

for using economic instruments, such as wastewater servicefees or effluent charges, in

wastewater management is to raise revenue forfinancing service infrastructure or remedial

actions for environmental damage.

3. Awareness raising and economic efficiency: Economic instruments can also be introduced

in order to raise awareness on the relationship between water use and resulting

environmental and/or social impacts. In order to attain economic efficiency, prices for

wastewater discharge should reflect to consumers all the financial, environmental, and

other costs that their decision to use water (and produce wastewater) imposes on the rest



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of the system and the economy.

The specific objectives of the study include: (a) To set appropriate treated industrial and domestic wastewater effluent discharge charges

1.4 Structure of the report

(b) To develop guidelines and systems that enable implementation of the proposed wastewater

effluent discharge charges.

The report is organized in six chapters. The first chapter presents the purpose and scope of the

study. The second chapter gives a literature review on relevant topics that include guiding

principles, effluent charge bases and systems and practices in other countries. The

methodological framework and data used to conduct the study are presented in Chapter 3. The

fourth chapter is dedicated to setting of treated wastewater charge for Awash River Basin. A

framework for the implementation of the proposed charge is presented in Chapter 5. The last

chapter gives a national guideline for treated wastewater discharge charge.



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2 LITRATURE REVIEW

2.1 Water Pollution control Water is a universal solvent which makes it highly vulnerable to get polluted. Water is generally

considered polluted when it gets changed in its quality or composition either naturally or as a

result of human activities so as to become less suitable for drinking, domestic, agricultural,

industrial, recreational, wildlife and other uses for which it would have been otherwise suitable

in its natural or modified state.

A water pollutant can be defined as a physical, chemical, or biological factor causing aesthetic

or detrimental effects on aquatic life and on those who consume the water. Occasionally,

pollution may derive from natural processes such as weathering and soilerosion. In the vast

majority of cases, however, impairment of water quality is either directly or indirectly the result

of human activities. One of the major being wastes released from municipal water and

wastewater treatment facilities.

Municipal wastewater consists of waterborne wastes originating primarily from residence,

commercial areas, and institutions. It contains about 99% of water and 1% of solids. Of these

solids, 70% are organic and 30% are inorganic in nature. In most cases municipal wastewaters

are generally discharged as such in the untreated, treated, or potentially treated form into

nearby water bodies like rivers, lakes etc where it can cause severe sanitary and water pollution

problems. The major problems associated with wastewater are production of odors and spread

of enteric diseases, besides organic pollution which leads to oxygen depletion and fish kill.

2.2 Environmental and Health Effects of water pollution

The general effects of water pollution can broadly be classified into physico-chemical,

biological, toxic and pathogenic.



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Physico-chemical effects

A large number of pollutants can impart color, tastes and odors to the receiving waters, thus,

making them unaesthetic and even unfit for domestic consumption. The changes in oxygen,

temperature and pH affect the chemistry of waters often triggering chemical reaction resulting

in the formation of unwanted products. The addition of organic matter results in depletion of

oxygen. The direct addition of nutrients through various sources enhances algal and other

biological growths which when die and decompose, further deplete the oxygen. The

decomposition of excessive organic matter, when undergoes in the absence of oxygen, results

in odorous and unaesthetic condition.

Biological effects

The addition of pollution leads to the shift in flora and fauna due to self regulating factors

operating in the aquatic systems. Most freshwater algae are highly sensitive to pollutants and

their elimination modifies the prey-predatory relationships breaking down the food chains.

Toxic effects

These are caused by pollutants such as heavy metals, cyanides and other organic and inorganic

compounds which have detrimental effects on organisms. These substances have usually very

low permissible limits in waters and their presence beyond these limits can render the water

unfit for organic aquatic biota and human use. These chemicals are toxic to the aquatic

organisms and many of them, especially those non-degradable accumulate in the body of

organisms and biomagnify along the trophic levels causing long term effects.

Pathogenic Effects

In addition to the chemical substances, a few wastes like sewage, also contain several

pathogenic and nonpathogenic microorganisms. Many waterborne diseases like cholera,

typhoid, paratyphoid, colitis and infective hepatitis are spread by consumption of sewage

contaminated waters.



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2.3 Principles Wastewater Management The following guiding principles provide a suitable basis for sound management of water

pollution. This is adopted from International Best Practices, developed by UNEP in 2010 for

wastewater management.

Prevent pollution rather than treating symptoms of pollution

Researches showed that remedial actions to clean up polluted sites and water bodies are

generally much more expensive than applying measures to prevent pollution from occurring.

Although wastewater treatment facilities have been installed and improved over the years in

many countries, water pollution remains a problem, including in industrialized countries. In

some situations, the introduction of improved wastewater treatment has only led to increased

pollution from other media, such as wastewater sludge. The most logical approach is to prevent

the production of wastes that require treatment.

Thus, approaches to water pollution control that focuses on wastewater minimization, in-plant

refinement of raw materials and production processes, recycling of waste products, etc., should

be given priority over traditional end-of-pipe treatments.

Use the precautionary principle

There are many examples of the application and discharge of hazardous substances into

the aquatic environment, even when such substances are suspected of having

detrimental effects on the environment. Until now the use of any substance and its

release to the environment has been widely accepted, unless scientific research has

proved unambiguously a causal link between the substance and a well-defined

environmental impact. However, in most cases it takes a very long time to establish such

causal links, even where early investigations suggest clear indications of such links.

Apply the polluter-pays-principle



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The polluter pays principle, where the costs of pollution prevention, control and

reduction measures are borne by the polluter, is not a new concept but has not yet

been fully implemented, despite the fact that it is widely recognized that the perception

of water as a free commodity can no longer be maintained. The principle is an economic

instrument that is aimed at affecting behavior, i.e. by encouraging and inducing

behavior that puts less strain on the environment. Examples of attempts to apply this

principle include financial charges for industrial waste-water discharges.

Apply realistic standards and regulations

An important element in a water pollution control strategy is the formulation of realistic

standards and regulations. However, the standards must be achievable and the

regulations enforceable. Unrealistic standards and non-enforceable regulations may do

more harm than having no standards and regulations, because they create an attitude

of indifference towards rules and regulations in general, both among polluters and

administrators. Standards and regulations should be tailored to match the level of

economic and administrative capacity and capability. Standards should be gradually

tightened as progress is achieved in general development and in the economic capability

of the private sector. Thus, the setting of standards and regulations should be an

iterative and on-going process.

Balance economic and regulatory instruments

Until now, regulatory management instruments have been heavily relied upon by

governments in most countries for controlling water pollution. Economic instruments,

typically in the form of wastewater discharge fees and fines, have been introduced to a

lesser extent and mainly by industrialized countries.

Compared with economic instruments, the advantages of the regulatory approach to water

pollution control is that it offers a reasonable degree of predictability about the reduction of

pollution, i.e. it offers control to authorities over what environmental goals can be achieved and

when they can be achieved.



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A major disadvantage of the regulatory approach is its economic inefficiency. Economic

instruments have the advantages of providing incentives to polluters to modify their behaviour

in support of pollution control and of providing revenue to finance pollution control activities.

In addition, they are much better suited to combating nonpoint sources of pollution. The

setting of prices and charges are crucial to the success of economic instruments.

If charges are too low, polluters may opt to pollute and to pay, whereas if charges are too high

they may inhibit economic development. Against this background it seems appropriate,

therefore, for most countries to apply a mixture of regulatory and economic instruments for

controlling water pollution. In developing countries, where financial resources and institutional

capacity are very limited, the most important criteria for balancing economic and regulatory

instruments should be cost-effectiveness (those that achieve the objectives at the least cost)

and administrative feasibility

2.4 Effluent Charge The effluent charge is an economic instrument that provides an incentive to reduce discharges

or polluting effluents from point sources. It works through several links to pollution reduction,

interacting with tariffs and having possible significant affects through the revenue use (RU) of

the effluent charge revenue collected by a regulatory unit. As in the case of the tariff, the

effluent charge can also have impacts beyond pollution control: on behavior, budgets, and

other dimensions of service.

The advantages of different effluent charge designs will depend on the objective of the effluent

charge. One objective may be to raise the effluent charges so high that municipal water and

wastewater utilities (MWWU) are "forced" to install tertiary treatment on all wastewater

discharges. Another objective might be to set an efficient effluent charge by equating the

charge with the marginal social damages of the effluent. Another objective may be to maximize

the revenue of the RU(s) that receives the effluent charge payments as income. In the following

we discuss some design alternatives, but, to keep from getting overburdened and too



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hypothetical, do not try to construct analyses that relate to each of these objectives

(UNDP/GEF, 2004).

2.4.1 Guiding principles for effluent charges Principle 1: Effectiveness The treated wastewatercharge level should be such that it encourages dischargers to minimize

the volume and pollution loads using best available technologies. It should ensure that

pollution control more profitable than high releasing it unabated.

Principle 2: Self-sufficiency The revenue obtained through pollution charges should at least support the basin in covering

some of the costs associated with administration of the charge system.

Principle 3: Fairness The pollution fee system should not provide a competitive advantage to a subset of firms at the

expense of other firms within the same industrial sector. It should not also hinder

theinternational competitiveness of industrial sectors.

Principle 4: Simplicity The pollution fee system must be simple to comprehend for those implementing the system

and the targeted facilities. This is particularly important in situations where pollution charges

are new.

Principle 5: Feasibility An effective pollution fee system could not target a very large number of pollutants and a very

large number of industrial facilities. Hence, choices will have to be made aiming at limiting the

number of pollutants and polluters targeted by the pollution fee system. Coverage is then likely

to increase as experience and capacity both increase.

2.4.2 Effluent Charges: Fines or Taxes



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Since most effluent emissions are subject to operating permits reflecting point or ambient

emission standards or regulations, a main feature of effluent charge design is whether the

charge should only be levied for effluent discharges more than the permit or on all effluent

discharges, even those within “permitted” levels. In the former case, the effluent charge design

operates more like a fine for exceeding permitted effluent levels. This kind of design

encourages effluent control only up to the point of the permitted discharge. At the same time,

the design limits the financial burden the effluent charge places on an MWWU. The merit of

this design – its effectiveness, proportionality, and feasibility - depends not only on the level of

the charge relative to the cost of abatement and the damage of the effluent but on the set-

points established by the permit.

An effluent charge that applies to all effluent flows, whether within permitted levels or not, is

more of an effluent tax. It provides an incentive for effluent abatement below permitted levels

and is a cost to the MWWU regardless of the extent of treatment or care taken in operation. If

a country wants to design the effluent charge so that a charge is paid on all effluents, a legal or

ethical issue may arise as to the validity and meaning of the permits that had granted MWWUs

the “right” to produce effluents up to the permitted level. Such an effluent charge begins to

look and behave more like a simple tax than an incentive to reduce effluents to efficient levels,

especially if there is no attempt to link the effluent charge to the recreational, ecological or

other damages caused by the effluent (UNDP/GEF DANUBE REGIONAL PROJECT, 2004).

2.4.3 Effluent Charge per Unit of Pollution Most effluent charges are, in principle, levied per unit of pollution. Making them operational,

however, requires the identification and measurement of pollutants, selection of pollutants to

assess the charge on, and setting the charge level itself.

2.4.3.1 Load or Concentration? The measurement of the concentration of pollutants in a wastewater stream is difficult and

often costly. Combined with enough flow data, concentration data can be used to estimate the

"load" – usually denominated in some weight of mass per unit of time - of a pollutant in a



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wastewater stream. Both measures, however, may be important in estimating the damage

associated with the release of the pollutant in a water body. If one wants an effluent charge

design that signals the severity of the threat to the receiving water body, one probably needs to

not only select effluent charges that vary with the pollutant, but also one that varies with both

the concentration and load.

Indeed, it can even be the case that some effluents are beneficial up to a point. For example, a

certain level of nutrient load is necessary for a healthy ecosystem since many species depend

on the small animals that are nourished by the nutrients in the water column.

2.4.3.2 Selection of Pollutants The selection of pollutants against which to apply an effluent charge can be all embracing or

reflect a few “criterion” pollutants that are indicators of others. The pollutants subject to

effluent charges might also be determined by their toxicity, the threat they pose to a given

water body, and, perhaps most importantly, the cost of measuring the concentrations and

volumes accurately. The most common pollutants are measures of the amount of organic

compounds in water (such as BOD, COD), phosphorus, nitrogen and suspended solids. Fees are

charged on the basis of weight (as in British Columbia, Denmark, Estonia or Hungary) or, less

frequently, on specific pollutant units that correspond to the toxicity of effluent loads (as in

Germany, the Netherlands or Slovenia). Reductions in pollutant charges are often tied to

improvements that reduce effluent loads. Reduced charges are also often applied when plants

agree to adopt best available technologies, implement new procedures or engage in pollution

reduction programs generally or where firms bring their emissions below relevant effluent

limits.

2.5 International Experience with Effluent Charges This part focuses on the experience of EC countries with effluent charges. According to the

review of different country effluent charge practices, there are no instances that shows the

effluent charge is used strictly as an incentive tool for pollution reduction. The effluent charge is

almost invariably imposed in tandem with effluent standards and often serves to supplement



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other penalties for non-compliance with these standards. As noted in a recent study of

environmental taxes and charges in EC countries (Ecotec Research and Consulting, 2001) in

Germany and Denmark the effluent charge designs are based on the “fine” design and are

sharply reduced on effluents that are within standards. Ecotec’s elaboration regarding the

German design is that, “emphasis …is on the technical discharges… and the tax (effluent charge)

is a supplementary instrument used more or less as a penalty for non-compliance”.

In the Netherlands, France, Spain, and Belgium the effluent charges are considered primarily as

revenue instruments and incentive effects are “unclear but probably low” (Barde and Smith,

1997). The revenues are used for water pollution control measures. In England and Ireland, the

effluent charges are designed to collect revenues, but rates are set to cover the cost of

operating the effluent standards program (Ecotec Research and Consulting, 2001).

When it comes to the effects of effluent charges via the “cost side” i.e., the incentive to reduce

costs, it is almost impossible to untangle the effects of the effluent charges from the standards

and their enforcement. Most examinations, in fact, focus on the effects of effluent charges in

general and not on municipal wastewater sources. Since most sources are industrial point

sources, the role effluent charges have played in reducing municipal wastewater pollution is

further obscured. In some instances, e.g., Denmark (Ecotec, 2001), the effluent charges include

special considerations for different affected sectors. This is probably a good design feature but,

again, one that makes it difficult to assess the effectiveness of the effluent charge in the

municipal setting.

Finally, it is also difficult to assess the effluent charge experience of those countries whose

designs focus on the “revenue side” because, of course, the merit depends on the amount of

revenue produced and how that revenue is allocated. Some of the effluent charge programs

e.g., France, Netherlands, have been on-going for some time and appear to have passed the

test of effectiveness at some very basic level: they have generated revenues and have survived.

At the same time, however, one doesn’t know whether the programs have been

“proportionate” or how they would fare upon careful comparison to a counterfactual.



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Some European countries have some innovative features in their effluent charges. Denmark, for

example, designed its program as a “green tax” and revenues accrue to the general budget. It

also makes substantial distinctions in the effective effluent charge rate based on the sector and

the amount of household wastewater in the effluent stream. In Belgium, Italy, and Spain the

effluent charge system is not national but they differ by region.

2.6 Water pollution charging systems Water pollution charging systems in OECD (Organization for Economic Co-operation and

Development) member states are designed to fulfill different functions. The schemes can be

broadly categorized to fall under two categories. Schemes that are designed to act:

Mainly as an incentive for pollution abatement (Czech Republic, Denmark, Estonia,

Germany, Poland, Slovak Republic, and Slovenia); or

Mainly as a financial instrument to fund pollution control, water quality measures, and

infrastructure investments (Belgium, France, Hungary, the Netherlands, and Spain).

Pollutants

In general, only a small number of pollutants are liable for wastewater effluent charges. The

most common pollutants are measures of the amount of organic compounds in water (such as

BOD, COD), phosphorus, nitrogen and suspended solids. Absorbable Organic Halogens and

metals can also be subjected to effluent charges.

Some countries such as Poland, Germany, the United States (Maine) and Korea charge for

various other pollutants in effluent, including temperature, changes in pH, phenols and other

contaminants.Other notable pollutants levied include fish toxicity in Germany and aquaculture

discharges in Poland. A few countries include a catch-all pollutant, such as the inclusion of

“contaminant not otherwise specified” in the British Columbian scheme. Aragòn (Spain) charges

a pollutant fee categorized as “inhibiting matters.”



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Effluent charges are most commonly calculated on the basis of measured quantities of specific

pollutants in the effluent. Quantities are charged on the basis of weight (as in British Columbia,

Denmark, Estonia or Hungary) or, less frequently, on specific pollutant units that correspond to

the toxicity of effluent loads (as in Germany, the Netherlands or Slovenia). Schemes in the

Czech Republic, Belgium, California and Maine also charge polluters according to the volume of

wastewater produced. The Flanders region in Belgium used to levy nitrogen and phosphorous

content as part of a manure fee, but this fee was discontinued in 2007.

In many parts of the world, economic instruments are used for water management and

protection and these include fixed service charges (drinking water treatment and distribution,

and sewage network and wastewater treatment), various water charges, taxes, penalties and

allowances (bonus). The major aim is to have a rational and economical management of waters

to ensure that users respect the quality limits for water discharges, to prevent the depletion of

the water resources and to avoid quality damage, and resource conservation. There are cases

where the following pricing instruments have been used:

Charges/tariffs - are levied on water pollution to reduce suspended and oxygen-

depleting substances in river flows using limits set by the law. If the limits are exceeded,

fines or penalties are levied.

Fines are levied for violation of the laws, standards, regulations;

Penalties are levied for discharging larger amounts of pollutants;

Bonuses are granted to water users that take measures to protect waters and discharge

less pollutants that the level granted by the concerned authorities.

In South Africa, the waste discharge charge system (WDCS) is based on the polluter pays

principle and provides an economic instrument to assist other regulatory tools in moving

towards (or maintaining) the desired state of surface water resources. According to the national

water act of the country, the pricing strategy may provide for a differential rate for waste

discharges, taking into account the characteristics of the waste discharged, the amount and

quality of the waste discharged, the nature and extent of the impact on a water resource



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caused by the waste discharged, the extent of permitted deviation from prescribed waste

standards or management practices, and the required extent and nature of monitoring the

water use.

The WDCS is levied on water quality variables that critically impact on the river quality

objectives which will be selected with due consideration to the type of waste discharge sources,

the nature of the waste typically discharged, and the cost-effectiveness of monitoring different

variables.

The WDCS may, amongst others, be levied on the following water quality variables:

Nutrients: phosphate, nitrate and ammonium

Salinity: Total Dissolved Solids, Electrical Conductivity, chloride, sodium &sulphate

Heavy Metals: arsenic, cadmium, chromium, copper, mercury, lead, nickel & zinc

Organic material: Chemical Oxygen Demand

The WDCS comprise of two distinct water use charges, either or both of which may be applied

in a specific catchment. These are the Waste Mitigation Charge (WMC), which will cover the

quantifiable costs of mitigating waste discharge related impacts, and the Waste Discharge

Levy(WDL), that will provide a disincentive for the use of the resource as a means of disposing

waste.

The Waste Mitigation Charge will facilitate the recovery of the full costs to mitigate the impacts

of waste discharge on surface water resources. It will be a charge to registered water users,

discharging waste in the impacted catchments, and will be dependent on the net waste load

(load in discharge, less load in intake) in the return flows and not on the concentration.

In the Netherlands, water price mechanism is in accordance with the principle of full cost

recovery. The classification of the water price is that: a) the surface water pollution act charge;

b) the water levy body; c) ground water abstraction charge; d) sewerage levy e) drinking water

price; f) general taxes g) groundwater abstraction tax.



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The surface water pollution act charge finances surface water quality management. The

revenue of the charge will be used for three purposes; to cover the cost of activities to reduce

surface water pollution by imposing the charge; to pay the charges imposed on the body

imposing the charge, and to subsidize measures to reduce surface water pollution.



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Table 2-1Water pollution charge scheme in OECD countries

Country Liable activities Incentive Basis Thresholds/exemptions Revenue Belgium Flat charges based on pollution

units. Determined according to flow, COD, SS and thermal pollution

Exemptions of for sewage treatment plants and industrial plants with less than 7 employees. In Wallonia agricultural polluters that emit <45 pollution units/are taxed at domestic levels

Revenues fund general policies and investments in wastewater infrastructure

Canada( British Colombia)

Industrial effluent Base fee flat+ discharge fees that vary by pollutants

Exemptions for government permit holders. Certain industries are exempt if they operate according to an approved industry code practice

100% earmarking for environmental programmes

Canada (Quebec)

Wastewater treatment plants

Flat Discharge fee per pollutant *weighting factor ranging from 1-1000

100% earmarking for environmental programmes

Czech Republic

Discharge volume fee*flat pollutant charges that vary by pollutant

Fees payable if pollutant concentration and volume thresholds are exceeded. Volume threshold is 30,000m3

100% earmarking to state Environmental fund

per year. Denmark wastewater treatment

plants and industrial effluent point and diffuse effluent

Germany Industrial effluents Differential charge based on pollution units. Charges vary according to pollutant, plant size and facility type.

Exemptions for rainwater discharges from industrial plants not exceeding the size of 3ha, water used for mining and discharged into artificial waters, certain rainwater discharges, and water that has not been changed in character by use

All revenue earmarked to finance programs to improve water quality, infrastructure, and administration costs

Hungary Industrial effluent Differential charges across range of pollutants. Fees based on emission volume *specificpollutant rate*area sensitivity *sludge disposal factors

Exemptions for pollutants in wastewater existed originally and rain water diversions



19

2.7 Compliance and monitoring Many countries allow for self-monitoring of discharges and self-assessment of charges. The

schemes in the Czech Republic, France, Germany, Hungary, the Netherlands and Poland

place the responsibility on polluters to monitoring discharge volumes and pollutant

concentrations. In Hungary and Poland the polluters are also expected to calculate the

charges due.

Studies indicated that self-monitoring and self-assessment is one of the weakest

implementation factors in the Polish system of discharge permits. Provincial inspectorates

lack staff resources and face a huge burden monitoring and verifying self-reported

discharges. Some firms violate the scheme by not acquiring permits in the first place, as they

know regulators are under-staffed and under-financed.



20

3 Methodology

3.1 Descriptionofthe Study Area

3.1.1 Location

TheAwashBasinispartoftheGreatRiftValleyinEthiopialocatedfrom 7ο52'12-12ο08'24"Nand

37ο56'24-43ο17'24"E.Itcoversatotalareaof116,220km2 ofwhichabout70831km2 isthe

westerncatchmentdrainingtothemainriveroritstributaries.Theremaining45389km2,mostof

whichcomprisestheso-

calledEasterncatchment,drainsintoadesertareaanddoesnotcontribute to

themainrivercourse.TheAwashBasinhasbeentraditionallydividedintofourdistinctzones.

These are: Upper basin, Upper valley, Middle valley and Lower valley (Figure 1.1).

Administratively, the basincoverspartsof Afar,Amhara,Oromiaand SomaliRegionalStates,

and Addis Ababaand DireDawaCityAdministrations ofthe country.

Figure 3-1 Location map of Awash River Basin



21

3.1.2 Physiography Awash Basin comprises highlands escarpments and rift (Fig. 1.2) The main physiographic

units include the north-western and south-eastern highlands (plateaus and escarpments),

and the features intheAddisAbaba riftembaymentand partsofcentral-

westernhighlandsthatform part of the upperAwash Basin.

Figure 3-2 Physiography of Awash Basin

Thenorth-westernandsouth-easternhighlandsofthebasinaremainly escarpments,highto

mountainousrelief hillsandrivergorgesof major tributaries.Asthewide escarpment zone

stepsdowntowardstherift,moderatereliefstructuralandresiduallandforms,mainlyhills

andparallelridgesoccur.Theupperbasinincludesmainlyslightlydissectedplateausthat

progressively becomemoderately dissectedplainstowardstheriftwhencutby faultsand

streams.

3.1.3 Climate



22

The climate of theAwash Basin comesunder the influence of theInter-

TropicalConvergenceZone (ITCZ).Thiszoneof low-pressuremarkstheconvergenceofdry

tropicaleasterliesandthemoist equatorialwesterlies.

Theseasonalrainfalldistributionwithinthebasinresultsfrom theannual

migrationoftheITCZ.InMarch,theITCZadvancesacrosstheBasin from thesouth,bringing the

smallorspringrains. In JuneandJulyit reaches itsmostnortherlylocation beyond theBasin

thatthen experiences the heavy or summer rains. It thenreturns southwards during

August to October, restoring

thedriereasterlyairstreams,thatprevailuntilthecyclerepeatsitselfinMarch.Theannual

rainfalldistributionresultingfromthiscycle isexhibitedmostclearlyinthe two

distinctrainyperiods,

whicharecharacteristicofthenorthernplainsofthebasin.Movingsouthwardsthemoreprolong

ed exposuretothemoistair-

streamisevidentinthetendencyforthetwodominantrainyperiodsto

mergeintoacontiguousdistribution.OnthehighplateautothewestofAddisAbaba,therainfall

distributionshowsacontinuousincreasefrom thespring rainsto thesummerpeak rainfall.The

distributionofrainfallover thehighlandareas ismodifiedby orographiceffects

andissignificantly correlated with altitude (ADF 2003)

Themeanannualrainfallvariesfrom

about1600mmatAnkober,inthehighlandsnortheastofAddis

Ababa(westlimitofthebasin)to160mm atAsayitaonthenorthernlimitoftheBasin.AddisAbaba

receives90%ofitsannualrainfallbetweenMarch andSeptember.AtDubti,thesameoverall

proportionisreceivedduring thetworainy periods,distributed30%and60%respectively.

Themean

annualrainfallovertheentirewesternCatchmentis850mmandovertheheadwatersoftheAwas

h, asgaugedatMelkaHomboleitis1216mm.Overthe

EasternCatchment,themeanannualrainfallis estimatedtobe 456mm.Theannualandmonthly

rainfallsare characterizedby highvariability.Mean annualwindspeedat

Kokaaverage1.2m/s,thewindiestmonthsbeing Juneand July withmean



23

monthlyvaluesof1.9and1.6m/srespectively.AtAmibara(downstream of Kokaand Kessem

reservoirs),themean monthlywind speed valuesinJuneandJulyareover2 m/s. Basedmainly

onaltitude, theAwashBasin is traditionally subdivided into fourdistinctzones. These

are:Upperbasin,UpperValley,MiddleValleyandLowerPlains.

3.1.4 Landcoverandsoil

According tothe2001landuse/covermapofMoARD(Figure1.3),thedominantland

use/landcoverofAwashBasinisexposedrock/sand(34.9%)followedby cultivatedland

(27%).There are alsoother landuses/coversthatinclude urbanareas,industrial zones,forest,

shrubland,grasslandandswamps.Majorurbancentersofthecountry likeAddisAbaba,Dire

Dawa,Adama,Bishoftu, Dessieand Semeraarelocatedin thebasin. Most manufacturing

industriesofEthiopiaareconcentratedintheAwashBasin.Itisalsocharacterized by land

transportroutesthathave hightraffic loads.AwashBasinisendowedwithvaluable terrestrial

andaquatic ecosystemslikeAwashNationalPark,GedebassaandBorkenaswamps,Bishoftu

andBeseka lakes.

Accordingtodifferentstudies,theAwashBasinexhibits28soiltypesdominatedbyLithic

Leptosols,EutricLeptosolsandEutricVertisols, whichcoverabout70%ofthetotallandarea

ofthebasin.



24

Figure 3-3 Land cover map of Awash Basin

3.1.5 Population and Socio-Economy

The populationof the Awash RiverBasinwasestimatedtobe more than15millioninone of

theprevious studies (Halcrow, 2010). Themain population centers liein theupperpart ofthe

basinmainly aboveanelevationof1,500m.Populationdensitiesvary from110-270persons

perkm2in thehighland to less than 1 person/km2 in thelowlands.

Agricultureisthemaineconomicandwaterusesectorinthebasin.Themajorsystemsof

productioninclude mixedrainfedagriculture-livestocksystemwhichispracticedinthe

highlands,irrigationandpastoralism. Small,mediumandlarge scale irrigationispracticedin

allpartsofthebasinwithmediumandlargescaleirrigationconcentratingalong AwashRiver

andsmallscaleirrigationschemesdispersedin thesub-basins.Themasterplanstudy report

indicated availabilityofsome200,000 ha of suitablelandforirrigation.



25

Therearealso severalmanufacturing andagro-processingindustriesthatcontributeto

economic development of the co u n t r y . They include tanneries and

l e a t h e r p ro ce s s i n g factories,foodandbeverage

industries,textiles,metalandchemicalindustries,sugar and cementfactories.

3.1.6 Waterpollutionandcontrol The waters of Awash Basin are used for various purposes that include domestic and

ecologicaluses,irrigation,recreationalandindustrialuses. Theseusesare,however,under

threatduetopollutionofsurfaceandgroundwatersofthebasinfrompointandnonpoint

sources.The major pollutantsof concernare sediments,nutrients,biodegradable organic

wastes,salinity,heavy metals,andpathogens.Themajorsourcesofpollutionincluderunoff

from agricultural and urban areas, and discharge of untreated domestic and industrial

effluents,irrigation drainage andLakeBeseka.

Although there are policy and legal tools relevant to water pollution control, there is

weaknessinenforcing them.Examplesofrelevantpolicy andlegalinstrumentsincludethe

ConstitutionandEnvironmentalPolicy ofFDRE,EnvironmentalImpactAssessment

Proclamation(proc №299/2002),andEnvironmentalPollutioncontrolProclamation(proc. No.

300/2002).

3.2 Conceptual Framework The conceptual framework for the development of the treated wastewater charge system is

depicted in Figure3.4. The framework captures the six main factors that determine the

proposed charge systems: namely source categorization and Awash River classification, best

charging system option analysis, financial and economic analysis of the selected charge

system, social concern, environmental consciousness, and institutions.

The first factor is the source of the treated wastewater and the quality of the receiving

water body which may show spatial variation. Review of international practices show that,

the charge to be levied for treated wastewater discharge is a function of the pollutant type

and the assimilative capacity of the receiving water body. While the type of pollutant that is



26

released to the water environment is governed by the source, the amount that can be safely

discharged is governed by the existing quality of the receiving water body which indicates

the assimilative capacity of the river. Generally, two major sources of wastewater are

envisioned in this study: municipal and industrial. These sources may need to be further

categorized on the basis of size and type of industry. The water quality of the river along the

whole reach is classified in terms of their assimilative capacity and this can be introduced in

the charge system as site factor.

The second factor addresses the selection of the best method and model for the charge

system. As indicated in Chapter 2, there are several international practices for the charge

system. These include a flat administrative fee coupled with a variable charge depending on

the volume of treated wastewater released or concentration of the pollutants released or

the load of the pollutants released or a combination. It has been shown in Chapter 2 that, a

flat administrative fee coupled with a variable pollutant load base charge has wider

application and is adopted for further investigation.

Figure 3-4Conceptual Framework for Treated Wastewater Discharge Charge



27

The third factor is concerned with the financial and economic analysis of the charge system.

For the setting of the administrative fee, capital costs and recurrent operation and

maintenance costs is considered. In the first, costs for such activities as setting up a

competent laboratory are covered. In the latter, recurrent costs that the Authority will incur

to implement the permit and charge system such as the inspection and monitoring regime is

covered. For the setting of the variable load base charge, various approaches are

investigated. One of the most commonly used approaches is to assess what it will cost to

bring the pollution load of an industry to a value that is achievable using best available

treatment technologies, and charge the industry for the load in excess of that is achievable

by the best available technology. The other approach is based on assessing the externalities.

The charges thus arrived are further analyzed to establish their affordability and willingness

to pay.

The fourth aspect of the framework addresses social issues. The charge system that is

introduced is evaluated in terms of its fairness and equity. The fifth aspect underlines the

importance of environmental awareness. Society that is conscious of the environment is a

willing participant in the protection of the environment. The last factor is the institutional

factor. This factor addresses the presence or lack thereof legislations for the

implementation of the charge system. Particularly, the presence of environmental standards

for both municipal and industrial wastewaters released to surface water bodies without

which implementation of the charge system is problematic.

3.1 The Proposed Charge Model

The Treated Wastewater Discharge Charge, as defined in the proposed permitting system,

refersto the total fee paid by a discharger for use of a water body for wastewater disposal

purposes.

It shall be composed of two groups of fees: (a) administrative fee covering the minimum

administrative and inspection costs incurred by the Supervising Body for the industry and



28

Municipalities ; and (b) load based variable charge based on the volume and concentration

(or load) of the effluent discharged by the establishment.

The Administrative fee is based on the minimum administration costs, and has to be

reviewed annually. It is designed to provide the minimum financial requirement for

processing discharge permit application and inspection. It is computed by assuming

minimum personnel requirement, size of the facility, sampling requirement, and processing

fee according to the volumetric rate of discharge of a facility.

The load-based charge covers monitoring and other program costs based on the

pollutant load, i.e. the volume and concentration of particular pollutant and the current

ambient environmental quality and classification of the water body. It can accommodate

multiple pollutants by summing up the fees per pollutant.

This is collected for effluents containing Biochemical oxygen demand (BOD5) total

suspended solids (TSS), Total Nitrogen and Totalphosphorous. Further in the computation of

the load based fee, a correction factor, called stream factor or site specific factor is added to

account for the differences in ambient water quality of the receiving body. Indirectly, it

accounts for the environmental carrying capacity of these waters.

Computation of the total discharges fee is as follows:

𝐷𝐷𝑓𝑓𝑓𝑓 = 𝐹𝐹𝑓𝑓 + 𝐿𝐿𝐿𝐿𝑓𝑓 + 𝑉𝑉𝑓𝑓

Where:

Dfi= Total wastewater discharge permit fee per establishment of facility

Fi = Administrative fee per establishment of facility i per year in (birr/facility)

LBf = pollutant load-based fee

Vf

LB

= volume based fee

The load-based fee is computed using this formula:

f=

�[(𝑅𝑅𝑅𝑅𝑛𝑛

𝑅𝑅=1

∗ 𝐿𝐿𝑅𝑅) ∗ 𝐾𝐾]



29

Where:

n= number of pollutants

Rj = rate of charge per unit of load by pollutant j

in birr /unit of pollutant load

Lj = (Cj x Qj x N) / 106

K=1+ 𝐴𝐴𝐴𝐴−𝐴𝐴𝐴𝐴𝐴𝐴𝐴𝐴

Where;

K= site specific correction factor

Ac= the current ambient environmental quality of the receiving river or water body

At= the target ambient environmental quality based on the river or water body

Detailed calculation fee is made as follows:

F

(in kg) or the pollutant load j

K=site specific correction factor

The rate of charge or fee (Rj) for a given pollutant, is determined using results of the

surveyof abatement costs in the basin.

Pollutant load or Lj refers to the product of the establishment’s effluent concentration (Cj, in

mg/L), the volumetric flow rate (Qj, in liters per day), , and the number of operating days in

ayear (N).

The correction factor for the differences in ambient water quality or site specific

factoriscomputed as follows:

i+[LBf+ Vf]= Fi + {(V x*Vc) + [(SS * SSc) + (BOD x*BODc) ++(TP*TPc)+ (TN *TNc)]Kf}*Ef

Where;

V= the flow of the period

Vc= The unit flow charge Birr per m3

SS =the mass of suspended solids discharged for the period

SSc =the SS charge Birr per kg.

BOD = the mass of BOD discharged for the period.

BODc= the COD charge Birr per kg

TN = the mass of Total Nitrogen discharged for the period.



30

TNc = The TN charge Birr per kg.

TP= total phosphorous in period

TPc= total phosphorous charge Birr per kg

Kf = Site factor

Ef

3.3 Charging Parameters

= Economic factor

Flow Charge The magnitude of the unit charge is based on the annual costs associated with remediation

of the environment flow costs associated with the disposal system. The charge unit is

expressed as birr/m3.

Suspended solids Related to further purification and a portion of sludge treatment and disposal and a

portion of the odour control costs for the site. Suspended solids can be measured

directlyand a charge allocated. The charge unit is expressed as birr/kgSS

Organic load (BOD5

3.4 Classifications of the industries and towns

) charge

The charge unit can be calculated from the costof organic load removal in the secondary or

tertiary treatment processes, andother associated costs as defined from the proposed

treatment system. The chargeunit is expressed as birr/kg BOD.

Nitrogen and Phosphorus

Related to the cost of nitrogen and Phosphorus for further removal in the secondary or

tertiary treatment system and otherassociated costs. The charge is expressed as birr/kgTN

and birr/kgTP.



31

Depending on the available data manufacturing industries have been categorized into two:

medium and large scale and small scale industries. The major medium and large scale

manufacturing industries include

Leather industries

Textile industry industries

Food and beverage a industries

Chemical industries

Pulp and paper products

Metal industries

According to GTP-II, towns are categorized into different levels based on their population as shown in Table 3.1.

Table 3-1 Categories of towns

Town’s level Population size 1 >1,000,000 2 100,000-1,000,000 3 50,000-100,000 4 20,000-50,000 5 <20,000

3.5 Data collection and analysis As part of Setting of Treated Wastewater Charge for Awash River Basin, a comprehensive

data collection campaign was conducted in May, 2018. Different industrial establishments

and municipalities that have wastewater treatment facilities have been targeted. Experts

from the technical and socio-economic sub-teams as well as Awash Basin Authority

participated in the survey. Questionnaires, Key informant interviews and stakeholder’s

checklist were used as instruments to collect the required data.

3.5.1 Data collection instrument development process

Four data collection instruments, i.e., survey questionnaire, key informant interview, focus

group discussion and stakeholder analysis, were developed to collect the required data. For



32

convenience, the data to be collected were organized under four headings: technical, social,

economic, and institutional and legal. The instruments seek to get data and information

from utilities and industries that own and operate wastewater treatment facilities regarding

the quality of the raw and treated wastewater, the level of treatment, type of treatment

process/ technology employed, treated wastewater discharge mechanism, volume and

loads of treated wastewater discharge, practice of recycle, awareness on environmental

pollution, willingness to pay, etc.

Sources of treated wastewater include municipal wastewater treatment plants (MWWTPS)

and industries that have treatment facilities. MWWTPs are designed and constructed to

treat wastewater originating from residential, non-industrial businesses, and institutional

sources. They may also handle industrial wastewater after pretreatment.

The technical data that is required to determine the administrative fee is mostly the capital

and recurrence operation and maintenance costs that the Supervising Body incurs in setting

up and administering the permit system and the inspection and monitoring regime. The

main component of the capital cost is the cost towards setting up a competent laboratory to

carryout treated wastewater quality analysis which is an important part of the inspection

and monitoring regime. The capital cost is a one off cost. The recurrence operation and

maintenance cost is the cost the Supervising Body incurs on annual basis in order to

administer the permit system and run the inspection and monitoring regime. The cost

includes personnel cost, consumable and chemical cost, sampling cost etc.

The technical data that is required to determine the variable load based charge include

characteristics of treated wastewater discharged by MWWTPS and industries, types of

wastewater treatment technologies employed, capital costs of wastewater treatment

plants, and operation and maintenance costs. The primary sources for these data are

industries and utilities that own and operate wastewater treatment plants.

3.5.1.1 Treated Municipal Wastewater



33

From secondary data that was collected as part of this study, it was observed that there are

17 MWWTPs in Awash River Basin. These WWTPs are all found in Addis Ababa, and they are

owned by Addis Ababa Water and Sewerage Authority. No other City in the country has any

conventional wastewater treatment plant. Of the 17 MWWTPs, 13 are currently operational

while the remaining plants are still under construction. The MWWTPs that are currently

operational form the sampling frame. The treatment plants are of different capacities and

technologies. Accordingly, a stratified sampling was adopted. The MWWTPs were stratified

on the basis of capacities and technologies. Based on capacity, three strata were created:

large, medium and small. There is one large and 12 small MWWTPs. Based on technologies,

two strata were created: UASB based and MBR based technologies. The large plant is a

UASB based plant while the 12 small plants are MBR based plants. Considering the

homogeneity in terms of technology, the largest MWWTP and one of the smallest WWTP

were taken as representative samples for this study. The selected MWWTPs are the Kality

wastewater treatment plant that has a capacity of 100,000 m3/d serving more than 1 million

people, and the Bole Arabsa 1A wastewater treatment plant that has a capacity of 2,600

m3/d serving some 26,000 people.



34

Table 3-2Conventional MWWTPS in Addis Ababa

Table-1: WWTPs Names and Features S/No. Name of WWTP

Plant Design Flow (m3

Type

/d)

Current Status

1 Degnet 400 MBR plants with mechanical dewatering facility. The plants are Package plants and located at different condominium housing sites.

The plant is commissioned and currently under operation.

2 KaraKore 1 1000 ---- ditto ------- 3 MekanisaKotari 1700 ---- ditto ------- 4 Bole Arabsa 1A 2600 ---- ditto ------- 5 Bole Arbsa 2A 3600 ---- ditto ------- 6 Bole Arabsa 2B 4300 ---- ditto ------- 7 Tulu Dimtu 1 1980 ---- ditto ------- 8 Tulu Dimtu 2 1980 ---- ditto ------- 9 Tulu Dimtu 3 1000 ---- ditto ------- 10 Oromia 2600 ---- ditto ------- 11 Bole Bulbula 3000 Construction of the plant is

completed. Operation will start soon

12 Kilinto 4000 ---- ditto ------- 13 KoyeFetche 1 9,260 Extended Aeration

Activated Sludge plant with mechanical dewatering facility. The plant is a decentralized facility constructed to provide service to some portions of the Koye Fetch Condominium housing. . The plant is designed for BNR.

The plant is currently under construction. It is expected to be operational in a year.

14 KoyeFetche 2 10,796 Moving Bed Biofilm Reactor (MBBR) - Activated Sludge plant with mechanical dewatering facility. The plant is a decentralized

The plant is currently under construction. It is expected to be operational in a year.



35

3.5.1.2 Industrial wastewater

facility constructed to provide service to some portions of the Koye Fetch Condominium housing. The plant is designed for BNR.

15 KoyeFetche 3 12,307 Conventional Activated Sludge (CAS) plant with mechanical dewatering facility. The plant is a decentralized facility constructed to provide service to some portions of the Koye Fetch Condominium housing. The plant is designed for BNR.

Construction of the plant is near completion. Operation will start soon

16 a Chefe WWTP – phase 1

12,500 UASB + Trickling Filter based plant. Sludge dewatering with drying beds. The plant is a decentralized facility constructed to provide service to some parts of the City.

Construction of the plant is completed. Operation will start soon

16 b Chefe WWTP – phase 2

12,500 The plant is under construction. It is expected be operational after two years.

17 Kality WWTP 100,000 UASB + Trickling Filter based plant. Sludge dewatering with drying beds. The plant is a decentralized facility constructed to provide service to some parts of the City.

The plant is commissioned and currently under trial operation.



36

Industries were selected following stratified sampling procedure and drawn proportionally

from each stratum. These strata were set based on the type of industry, their size and

location; for example, the pharmaceutical, food and beverage, textile, tannery and chemical

industries. Efforts were exerted to include industries from the upper, middle and lower

parts of the basin to address spatial representativeness. The survey team has identified and

visited 26 industries presented in Table 3.2.

Table 3-3Industries Visited for Data Collection

S.No. Industry Location 1. Meta Abo Brewery Factory Sebeta 2. Yes Bottling Factory Sebeta 3. Yalkoneh Flower Farm Sebeta 4. Ayka Addis Textile Factory Sebeta 5. Bole Lemi Industrial Park AA(Bole) 6. Heineken Brewery Factory AA(kilinto) 7. Awash Tannery(Elico) AA(Saris) 8. Nifas Silk Paint PLC. AA(Legahar) 9. Bekash Chemical PLC. AA(Megenagna) 10. Bole Arabsa 2B MBR (AWSSA) AA 11. Kality WWTP(AWSSA) AA 12. Addis Ababa Kera AA 13. Kadisco Hospital AA 14. Addis Ababa Glass Factory AA(Asko) 15. Methahara Sugar Factory Methara 16. Alha Food and Plastic Factory Adama 17. Wonji Sugar Factory Wonji 18. Ethio-Pulp & Paper share Company Wonji 19. Jianxin Zhang Crust & Finished Leather Mojo 20. Mojo Tannery Mojo 21. Elfora Bishoftu 22. Awash Melkasa Chemical Factory Awash 23. Abssina Steel Factory Bishoftu 24. Kombolcha Tannery Kombolcha 25. BGI Beer Factory Kombolcha 26. Kombolcha Textile Factory Kombolcha

3.5.2 Method of Data Analysis



37

The collected data must be analyzed in a scientific way to arrive at reliable results. The

economic efficiency, social equity and environmental sustainability as well as simplicity

were the key principles in the analysis. Due to lack of complete data on wastewater

discharge, two separate estimation procedures: the technical and economic estimation

approaches were applied. Both approaches followed the descriptive and econometric

methods in line with the data and objective at hand.

The descriptive analysis included summary statistics such as frequency, percentages,

proportions, means, ratios, etc. and presented in tables, figures and charts. The descriptive

analysis intensively used the primary data. The technical charge setting procedure employed

proportional allocations while apportioning cost of treatment plants to arrive at the target

level.

3.5.3 Findings

3.5.3.1 Socio-economic The findings from the qualitative assessment indicated that most industries are relatively

willing to pay for wastewater charge. However, information access, awareness, financial and

technological capacities were mentioned as important constraints. Industries and various

development actors residing in the upper part were found to be major polluters and hence the

charge levied on them should be relatively high.Knowledge to reuse treated wastewater was

also found to be so low. The willingness to conserve water sources and areas affected by

treated wastewater were also found to be relatively high.

3.5.3.2 Wastewater treatment Municipal Wastewater Treatment Utilities The following were some of the key findings:



38

• The MWWTP that are currently operated by the AAWSA are state of the art

conventional wastewater treatment plants that treat municipal wastewater to

secondary treatment level;

• Although there are no national environmental standards in the country, the selected

MWWTPs are expected to meet internationally accepted effluent limits. In fact, the

technologies that are employed at the smaller treatment plants produce treated

wastewater whose quality exceed what is traditionally expected from municipal

wastewater treatment plants;

• The MWWTPs discharge their treated wastewater to Akaki Rivers which is the

tributary either directly in the case of Kality WWTP or indirectly in the case of the

smaller plants;

3.5.3.3 Industrial Wastewater Treatment Facilities The team could learn that some of the visited industries have wastewater treatment

processes that enable them meet environmental standards. The treatment processes of

such industrial establishments are presented below.

1. Heineken Brewery factory

Process flow chart

WWTP wastewater characteristics

Effluent discharge limits

Pre-treatment system

Equalization/acidification tank

Calamity tank

Chemical dosing

Anaerobic treatment

Aerobic treatment

Phosphate reduction

Sludge treatment

Biogas



39

According to the information obtained from the factory, most of the time the existing

treatment plant fulfills the standards set by regulatory body

Table 3-4Wastewater characteristics of Heineken Brewery

Parameter Units Wastewater quantities and loads

Maximum Average Wastewater quantity m3 1,900 /d

-

COD-load Kg/d 5,700 4,000

COD concentration mg/l 3,000 2,100

BOD mg/l 5 1,800 1,300

TSS mg/l 500 300

TN mg/l 80 50

TP mg/l 30 20

Temperature o Range 25 - 38 C 34

Table 3-5Effluent discharge limits

Parameter Unit Limit value

Temperature o 40 C

pH - 6 - 9

BOD5 at 20o mg/L C 60

COD mg/L 250

TSS mg/L 50

Total ammonia (as N) mg/L 20

Total N (as N) mg/L 40

Total phosphorus (as P) mg/L 5

Oil, fats and grease mg/L 15



40

Mineral oil at the oil trap or interceptor mg/L 20

2. BGI Beer factory (located in Kombolcha)

Existing Components of the treatment plant

Screening

Grease and oil removal tank

Equalization tank

Calmity tank

UASB

Aeration Tank

Final settling tank

Bacteria reserve tank (the bacteria is imported from Kenya)

Sludge drying Bed

3. Diego Brewery Factory (META)

Upper level

Inlet works- removal of course solids and effluent sampling

Dewatering system- sludge and Kieselguhr

Kieselguhr offloading and storage system

Chemical storage and dosing facility

ETP Laboratory and Control Room

Middle level Sludge storage tank-Stores primary and waste activated sludge

AD sludge tank-Stores excess anaerobic sludge

Shielded Biogas flare

Anaerobic digester- primary effluent treatment process

Clarifier-treated effluent clarification prior to discharge

Lower level

High rate filter removal of fine solids prior to primary treatment



41

Equalization lagoon-effluent equalization and mixing

Degasifying tank-Effluent and recycle mixing to reduce chemical consumption

Aerobic Lagoon-Secondary effluent treatment process

Final lagoon-treated effluent discharge basin

Equalization lagoon

o pH neutralization

o Acidogenic fermentation

o Mixing of effluent to keep fine solids in suspension

o Calamity storage tank

Aerobic Lagoon o Final COD/BOD reduction process

o Effluent denitrification

o Phosphate precipitation

NB: Most of the other factories visited do not have up to standard treatment plants and

processes



42

4 Charge Setting

4.1 Introduction The proposed treated wastewater charge has two parts- fixed and variable fee. The fixed fee

is meant to cover costs associated with administration of the charge system and basic water

quality management activities.It is apportioned among dischargers that are expected to

have wastewater treatment facilities. The variable fee aims at encouraging use of best

available wastewater treatment technologies. The fee is based on load of selected

parameters and volume of the wastewater.

4.2 Fixed fee

4.2.1 Elements of the fixed fee In this study the fixed fee is related to costs incurred for water quality management

activities of the basin. Information on the planned activities and the corresponding

estimated costs could be obtained the basin’s five-year strategic plan. They consist of the

following items:

Permit fee: it correspond to issuance of permit to investment projects that potentially

have adverse impacts on water quality.

Capital cost: this includes costs related to establishment of water quality laboratories

and monitoring stations, purchase of vehicles, etc.

Operation and maintenance: this comprises purchase of chemicals for water quality

tests and running costs for sampling and analysis water samples

Research and development: Awash Basin Authority is expected to finance researches

and studies that aim at protecting and improving the quality of its water resources. Such

studies may include development of water quality standards and guidelines, problem

solving studies on water quality, technology transfer, etc.

Capacity building: this includes human resource skill upgrading and development,public

awareness, policy dialogue and establishment of pollution charge database.



43

Water resources management: This covers costs related to monitoring and management

of watershed development activities that contribute to water quality protection.

The estimated annual costs associated with each category of water quality management

costs is indicated in Table 4.1.

Table 4-1Estimated annual costs for water quality management related activities

No. Cost category Estimated annual cost, ETB 1 Establishment wastewater laboratories and stations 13,000,000 2 operation and maintenance of wastewater laboratories 7,000,000 3 Research and development 14,400,000 4 Watershed management 631,000 5 Capacity building 5,000,000

4.2.2 Treated wastewater dischargers The fixed fee needs to be fairly apportioned among treated wastewater dischargers. There

are several municipalities and industries that generate and discharge wastewater in the

Awash River Basin. It is expected that all Level 1 and Level 2 towns will have treatment

facilities by 2025. Addis Ababa will be the only Level 1 town and is expected to have 20

wastewater treatment facilities in different areas. The existing and ongoing wastewater

treatment facilities in Addis Ababa are shown in Table 3.1. It is also assumed that there will

be about 15 treatment facilities distributed in Level 2 towns of the basin. Level 2 towns of

the basinhaving a population of 100,000 to 1,000,000 by 2025 include Dire Dawa, Adama,

Dessie, Bishoftu, Kombolcha, Sebeta,Burayou, Mojo and Dukem. Each town is expected to

have 1 to 3 wastewater treatment facilities depending on its size and topography.

Some Level 3 towns with population between 50,000 and 100,000 may be served by

wastewater treatment systems and hence expected to pay the appropriate charges. Level 2

and Level 1 town with population less than 50,000 are not expected to have standard

wastewater treatment facilities until 2025. They are, therefore,exempted from wastewater

discharge charge.



44

Awash Basin has a high concentration of small, medium and large scale manufacturing

industries. The number of small scale industries is not known and most of them do not have

treatment plants. Data on the number of large and medium manufacturing industries per

region could be obtained from MoI for the year 2015/16. Ethiopia is working to become a

lower middle income economy by 2025 with a per capita GDP of 1880 USD. The number of

large and medium industries in each administrative region is also assumed to grow

proportionally with the per capita GDP. The number of medium and large scale

manufacturing industries in regions that constitute parts of the Awash basin are indicated in

Table 4.2.

Table 4-2Number of large and medium manufacturing industries

Region Expected No. of industries in 2025 % of industries inAwash Basin Afar 13 50 Amhara 488 25 Oromia 1619 75 Addis Ababa 2108 100 Dire Dawa 171 100

4.3 Variable fee

4.3.1 Variable fee valuation approaches

The control of municipal and industrial effluent discharges to water courses imposes a

variety of financial costs on River Basin authorities or Regulatory Agencies. This includes

costs towards research, policy-making, the preparation of discharge licenses, monitoring

adherence to the standards set, etc.

In many countries, effluent charge systems / treated wastewater discharge charge systems

have two main objectives. The first is to raise fund to introduce and carryout water quality

management by a river basin authority or regulatory agency. This objective is referred as

hypothetcation objective, and the fixed fee component of a charge system is quite often

developed to meet this objective. Such a goal is probably the origin of effluent charge



45

system in every regional or basin authority in the world, where regulatory charges are

collected. The parallel here with fee payments for water abstraction licenses is evident.

But another goal for an effluent charge system seems to have developed in an evolutionary

manner from the hypothecation charge. It evolved from the observation that rivers provide

environmental services. They act as sinks for pollutants, and in doing so undergo quality

degradation. Therefore, at the most general level, the objective of regulatory standards on

municipal and industrial effluents has been to reduce pollution of the natural environment.

This has benefits not only of an environmental nature but also can increase gross domestic

product: by reducing the costs of in stream water users such as in fishing, leisure pursuits

and other ecosystem activities; and by cutting the costs of downstream water abstractors.

The charge that is levied on dischargers towards meeting this objective is variable, and

depends on the volume of wastewater or the mass of pollutants discharged to the river.

Several methods and approaches for valuation of environmental services exist. However, in

many cases information on actual costs of preventing or mitigating decline in environmental

quality is easier to obtain than data on observed or stated willingness to pay (WTP) or

willingness to accept (WTA) that reflect the value the society hold for (demand) such

environmental quality. In such situations cost-based approaches are common. Two

principles for the direct valuation of environmental degradation exist: damaged based and

cost based. The former is based on the benefits of averting damage incurred from

environmental degradation. The latter is based on the cost of preventing environmental

degradation and has been referred to in the past as the preventive expenditure (or

maintenance cost) approach.

The damaged based valuation approach measures the value of water’s waste assimilation

services in terms of the benefits from averting degradation and loss of this service. Damages

include human illness and premature death, increased in-plant treatment of process water

required by industry, increased corrosion or other damage to structures and equipment,

siltation of reservoirs, or any other loss of productivity attributable to changes in water



46

quality. However, measuring and valuing damage can be particularly challenging: damages

may not occur during the same accounting period as the change in water quality, there may

be great uncertainty about the degree of damage caused by a change in water quality, or

damages may occur further downstream. Even when damages can be measured, it is not

easy to value them, particularly environmental damages. In most instances, total cost of

damages are estimated and an average damage cost per unit of pollutant is estimated.

Like the damage-based valuation approach, the preventive expenditure / cost based

valuation approach is also based on environmental degradation, but rather than looking at

the cost of damages caused (that is, lost benefits from good environmental quality), it is

based on the cost of actions to prevent damage. This method assumes that an individual’s

perception of the cost imposed by adverse environment quality is at least as great as the

individual’s expenditure on goods or activities to avoid the damage. This means that a

society's perception of the cost imposed by adverse river water quality due to wastewater

discharge is at-least as much as the society's expenditure on wastewater treatment to avoid

the damage.

One of the most common preventive expenditure / cost based approach is what is

commonly known as the Abatement Cost Approach. The approach measures the cost of

introducing technologies, which includes both end of- pipe or change in process solutions,

to prevent water pollution.

4.3.2 Abatement Cost Estimation The abatement cost approach has been adopted in this study in order to develop the

variable cost component of the charge system. In this approach, data on capacity, influent

and effluent wastewater quality, capital cost, operation and maintenance cost, and

treatment efficiency of the various wastewater treatment plants found in the Awash River

Basin have been collected. These data were analyzed in order to determine the current unit

price for removing selected pollutants, i.e., unit price (ETB/kg) for removing TSS, BOD, TN &

TP, from wastewater. The assumption being that the unit cost imposed by adverse river



47

water quality due to the pollutants is at-least as much as the unit price expended to treat

the wastewater to remove these pollutants to avoid the damage.

It is worth noting that, despite the fact that the Basin is home to large number of industries,

there is hardly any data on industrial wastewater treatment and treatment facilities. The

only data that were available is data on municipal wastewater treatment and municipal

wastewater treatment plant facilities. Even these data were quite limited both in number,

spatial distribution, and type of technology. Complete data were obtained from only four

municipal wastewater treatment plants. All are found in Addis Ababa, and the plants are

UASB based and Activated Sludge based plants (Table 4.3).

Table 4-3Details of the wastewater treatment plants considered in the study

WWTPs Capacity (m3 Technology /d) Treatment

TSS BOD5 TN TP 1 9,270 EAAS-Activated Sludge X X X X 2 10,960 MBBR - Activated Sludge X X X X 3 12,307 CAS - Activated Sludge X X X X 4 100,000 UASB X X

The unit price for the removal of the selected pollutants and for managing the flow is

estimated as follows

1. The service life of the WWTPs were taken as 50 years;

2. The NPV of the capital cost of the plants is calculated. The capital cost is further

disaggregated to the cost of the various treatment units. This disaggregation to units

enables to associate the cost of the unit to the removal of a pollutant by that unit.

For example, the cost of primary sedimentation tank is associated with removal of

TSS. Accordingly, the NPV of the capital cost is divided in to the cost towards

removal of TSS, cost for removal of BOD5, cost for removal of TN, cost for removal of

TP, and cost for handling the influent volume.

3. The NPV of the operation and maintenance cost that will be incurred during the life

of the wastewater treatment plant. Appropriate discounting factor is used for this



48

purpose. As in the case of the capital cost, the operation and maintenance cost is

further divided in to the cost towards the removal of the various pollutants.

Accordingly, the NPV of the O&M cost is divided in to the cost for removal of TSS,

cost for removal of BOD5, cost for removal of TN, cost for removal of TP, and cost for

handling the influent volume.

4. The flow to the plant during the service life of the plant is also discounted to the

present. The mass of the pollutants removed is then calculated by considering the

difference in the concentration the pollutants at the Influent and effluent and

multiplying this with the flow.

5. The unit price for removal of the selected pollutant is obtained by dividing the sum

of the capital and O&M NPV for each pollutant calculated in step 2 & 3 by the mass

of each pollutant removed in step 4.

Table 4.4 provides the unit price for removal of the selected pollutants for discharging a

volume of wastewater in to a river (See Annex for details)

Table 4-4Unit price for removal of pollutants

Charge Parameter Unit Max Minimum Average

Volume ETB/m 1.85 3 0.29 1.30 TSS Removal ETB/Kg 2.14 0.51 1.55 BOD removal ETB/Kg 3.60 1.81 2.99 TN Removal ETB/Kg 37.71 30.99 34.73 TP Removal ETB/Kg 60.60 46.96 54.09

As described earlier, the assumption here is that the unit prices for the removal of these pollutants is at most as much as the unit cost that is imposed on the Basin Authority by adverse river water quality due to the pollutants. The computed variable fee rates were found to be below that of different countries as shown below.

Source: Drew and Emily, 2014



49

In addition to the above conventional parameters, a charge rate for salinity has been

recommended. Salinity is a major issue of concern in the middle and lower Awash River.

Both natural and anthropogenic sources contribute to the problem. It was not possible to

set unit charge for salinity based on empirical data. Effort was exerted to fix the unit rate

based on literature value and adjustment factor. The charge rate for salinity in Spain is 166

ETB per Siemens per cm and m3. This rate was multiplied by an adjustment factor

(0.37)which was computed from average rates obtained in this study and the literature

values for Spain. The charge rate for salinitywas therefore recommended to be 61.42 ETB

per Siemens per cm and m3

4.4 Site and economic factors

.

Rivers have natural purification capacities if their organic pollution assimilative capacity is

good. The assimilative capacity of Awash River varies from reach to reach depending on its

ambient water quality. The main river has been divided into three segments based on the

reported average dissolved oxygen concentrations: upstream of Addis Ababa, Addis Ababa-

Koka Dam and downstream of Koka Dam. The calculated site factors for the reaches are

indicated in Table 4.5. It is possible to calculate site factor for any tributary stream if

observed dissolved oxygen concentration are available. In general degraded streams have

site factor values greater than one.

Table 4-5Site factors for different segment of the main Awash River Reach

Observed DO

concentration, mg/L (A)

Desired DO concentration, mg/L

(B)

Site factor, K

=1+[(B)-(A)]/(B) Upstream of Addis Ababa 7.5 5 0.5 Addis Ababa-Koka Dam 4 5 1.2 Downstream of Koka Dam 6.5 5 0.7 The economic factor is dynamic and varies from 0 to 1.0. It reflects the capacity of the

discharger to pay for treated effluent and economic incentives granted to sectors.

4.5 Affordability and willingness to pay



50

Benefit cost analysis using data of some industries in the basin resulted in a Benefit-Cost

Ratio of 2.3 and profitability index, PI, of 1.0. This indicates that the industries afford to pay

for pollution charges levied upon them. The survey data also showed that the industries are

fairly willing to pay for treated wastewater discharge charge.

4.6 Proposed effluent charge

4.6.1 Fixed Feed

The total fixed fee has been apportioned among the treatment facilities considering their

financial capacities and the level of laboratory services provided. Accordingly, the fixed

charges for each discharge category was computed as indicated in Table 4.6.

Table 4-6Distribution of fixed fee among dischargers

Discharger category No. of wastewater treatment facilities

Annual fixed fee per establishment, ETB

Medium and large scale manufacturing industries

3500 10,000

Level 1 town (Addis Ababa) 20 10,000 Level 2 towns 15 8,000 Level 3 towns 12 3,000

4.6.2 Variable Fee The variable fee has two parts: the load based and the volumetric based.Load based fee has

been estimated for four commonly measured water quality parameters, i.e. Total

Suspended Solids (TSS), Chemical Oxygen Demand (COD), Total Nitrogen (TN) and Total

Phosphorus (TP).

4.6.2.1 Load based The load based variable discharge fee that a discharger pays depends primarily on the mass

of pollutants it discharges to the river. The discharger shall be subjected to fee for the mass

/ concentration which is over and above a limit that is set either by the Basin Authority or

Environmental Regulators. In many countries, national environmental standards concerning



51

the release of pollutants to fresh water is available. This, however, is not the case in the

country. To date there is no national environmental standard concerning the release of

pollutants to fresh water, although this is in of the Ministry of Water, Irrigation and

Electricity. If this charge system is to be effective, it is important that the MoWIE introduces

these environmental standards. For this study we propose the following standards for

pollutants that are considered. The first, i.e., (A), is a less stringent limit and can be

achievable by conventional treatment facilities with nutrient removal. The second, i.e. (B), is

very stringent and is only achievable by best technologies. The choice depends on the Basin

Authorities water quality goals.

Table 4-7Proposed effluent standards

The recommended effluent standard for salinity measured as Electric conductivity is

0.7dS/cm.

The variable fee concerning release of the pollutants shall then be determined by first

calculating the mass of the pollutant which is above the limit of applicable standard which is

calculated by multiplying the difference between the effluent concentration and the limit

(mg/l or g/m3) by the flow of the effluent (m3

Parameter

/d). This gives the mass of the pollutant in

g/day or Kg/ annum. The annual variable fee is then calculated by multiplying this mass by

the unit price determined in section.Excess charges are payable if emissions exceed 30% of

maximum allowable effluent limit corresponding to conventional secondary treatments.

(A) Maximum limit with conventional

secondary treatment (mg/l)

(B) Maximum limit with best technologies

(mg/l) TSS 35 10 BOD5 30 10 TN 15 5 TP 2 1



52

4.6.2.2 Volumetric based The volumetric based variable discharge fee that a discharger pays depends primarily on the

volume of effluent it discharges to the river. The discharger shall be subjected to fee for the

volume in proportion to the mass / concentration which is over and above a limit that is set

either by the Basin Authority or Environmental Regulators.

4.6.3 Total charge The total charge is the sum of fixed and variable fee with the applicable site and economic

factors. Different charge options (See Table 4.8) can be identified depending on the charging

parameters that are included and the effluent standard and rate used for variable fee

computation. The effluent standard can be related to pollutant concentration limits attained

by either conventional wastewater treatment technologies or best available technologies.

The variable fee rate for each charging parameter can correspond to the minimum, average

or maximum values presented in Table 4.4.

Table 4.8 Possible charge bases

LMI: Large and medium industries; SI: Small industries; L4/5-T: Level 4 and 5 towns

Depending on their capacity to pay the charges and the government’s policy direction, dischargers may be required to cover fixed fee component and variable fees of all or some parameters. For instance, Table 4.9 indicates possible options in which medium and large scale manufacturing industries are required to pay both fixed fee and variable fees corresponding to all parameters (Option 6). Wastewater treatment facilities in Level 1 towns may cover fixed fee and variable fees for BOD, TSS and volume (Option 3). Only fixed fee and variable fees corresponding to BOD and Volume are proposed for Level 2 towns (Option



53

2). Level 3 towns may cover only the fixed fee part (Option 1). Small industries and Level 4 and 5 towns are exempted from the charge. Table 4.9 Possible charge equations for different dischargers

Discharger Base Annual Charge formula** Large and Medium Manufacturing Industries 5

𝑫𝑫𝒇𝒇 = 𝟏𝟏𝟏𝟏,𝟏𝟏𝟏𝟏𝟏𝟏 + �[𝟏𝟏.𝟓𝟓𝟏𝟏 × 𝑻𝑻𝑻𝑻𝑻𝑻 + 𝟏𝟏.𝟖𝟖𝟏𝟏 × 𝑩𝑩𝑩𝑩𝑫𝑫𝟓𝟓 + 𝟑𝟑𝟏𝟏.𝟗𝟗𝟗𝟗 × 𝑻𝑻𝑻𝑻 + 𝟒𝟒𝟒𝟒.𝟗𝟗𝟒𝟒 × 𝑻𝑻𝑻𝑻] × 𝑲𝑲𝒇𝒇 + 𝟏𝟏.𝟐𝟐𝟗𝟗 × 𝑽𝑽𝑽𝑽𝑽𝑽𝒑𝒑} × 𝑬𝑬𝒇𝒇

Small industries 0 Exempted Wastewater treatment facilities in Addis Ababa 5

𝑫𝑫𝒇𝒇 = 𝟏𝟏𝟏𝟏,𝟏𝟏𝟏𝟏𝟏𝟏 + �[𝟏𝟏.𝟓𝟓𝟏𝟏 × 𝑻𝑻𝑻𝑻𝑻𝑻 + 𝟏𝟏.𝟖𝟖𝟏𝟏 × 𝑩𝑩𝑩𝑩𝑫𝑫𝟓𝟓 + 𝟑𝟑𝟏𝟏.𝟗𝟗𝟗𝟗 × 𝑻𝑻𝑻𝑻 + 𝟒𝟒𝟒𝟒.𝟗𝟗𝟒𝟒 × 𝑻𝑻𝑻𝑻] × 𝑲𝑲𝒇𝒇 + 𝟏𝟏.𝟐𝟐𝟗𝟗 × 𝑽𝑽𝑽𝑽𝑽𝑽𝒑𝒑} × 𝑬𝑬𝒇𝒇

Wastewater treatment plants in Level 2 towns 3

𝑫𝑫𝒇𝒇 = 𝟖𝟖,𝟏𝟏𝟏𝟏𝟏𝟏 + �[𝟏𝟏.𝟓𝟓𝟏𝟏 × 𝑻𝑻𝑻𝑻𝑻𝑻 + 𝟏𝟏.𝟖𝟖𝟏𝟏 × 𝑩𝑩𝑩𝑩𝑫𝑫𝟓𝟓] × 𝑲𝑲𝒇𝒇 + 𝟏𝟏.𝟐𝟐𝟗𝟗× 𝑽𝑽𝑽𝑽𝑽𝑽𝒑𝒑} × 𝑬𝑬𝒇𝒇

Wastewater treatment plants in Level 3 towns 1 𝑫𝑫𝒇𝒇= 3,000

Wastewater treatment plants in Level 4 towns 0 Exempted

Wastewater treatment plants in Level 5 towns 0 Exempted

** Notes: Df

Units of water quality parameters is kg/year and can be computed as the product of volume of discharge per year and concentration of parameters in kg/m

= Total annual charge in ETB per discharger

Vol

3 p

K

is the discharge volume that is proportional to the maximum excess pollutant concentration for which charge is levied

f

E

is the site factor which varies with the discharge reaches of the basin(K = 0.5 upstream of Addis Ababa; K = 1.2 between Addis Ababa and Koka Dam; K = 0.7 downstream of Koka Dam)

f = Economic factor which equals 1.0.



54

5 Implementation considerations Implementation of the proposed charge requires strong institutions, adequate legislation

and effective monitoring and enforcement. Moreover, relevant socio-economic

considerations and capacity buildings should be made. The proposed effluent charge should

be used in conjunction with the available command and control as well as public awareness

instruments.

The proposed effluent charge supports the polluters-pay principle that is clearly stated in

the Environmental Policy of Ethiopia. For the charge to be effective there have to be well-

crafted effluent charge acts and legislations. Setting ambient river water quality standards

that reflect the purposes of the river water at different locations is also a requirement.

Development of wastewater effluent standards that gives due consideration to water

quality protection is another key task. The Awash River Basin should also institute a strong

unit that is dedicated to the implementation and monitoring of the effluent charge. Self-

monitoring and reporting of discharge volumes and pollutant concentrations should also be

encouraged.

Strong capacity building programs that targetall levels, from decision-makers to technicians,

as well as technical capacities iskey to the success of the proposed treated wastewater

charge system.The focus areas include:

Public awareness to reduce resistance against the proposed charge and increase the

willingness to pay

High level policy dialogue and co-ordination to promote and ensure effective

implementation of the proposed charge

Human resource development andcapacity upgrading in the areas of monitoring,

charge calculation and collection

Well-equipped laboratories for sampling and analysis of wastewater samples

Database establishment for pollution charge



55

6 Conclusion and Recommendation The various legal and policy documents of Ethiopia clearly stipulate the need for protecting

the natural environment against pollution. The proposed treated wastewater charge is one

important instrument that can contribute to clean and healthy water bodies. It has to be

used in conjunction with relevant legal instruments. The combined use of legal and

economic instruments will encourage industries and municipalities to properly collect and

treat their wastewater. The necessary legal frameworks, and institutional arrangements and

capacities should be in place to effectively implement the proposed charge.

Appropriate treated wastewater charge equations should be used based on the capacity of

the implementing body, the policy directions of the country and the characteristics of

dischargers. We recommend to start with charges calculated based on minimum variable

fee rates and effluent standards that can be attained using conventional technologies.



56

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