Project No 2005/LV/16/C/PE/003 Development of water services in Riga, stage III This project helps to reduce economical and social disparities among the citizens of the European Union.

European Commission Decision signed on 21/12/2005 End date of eligible expenditure 31/12/2010 Total eligible expenditure of the project – EUR 69,221, CF funding – EUR 58,838, Absorbed funding ~ 15 % Progress in the project: 4 diesel generators supplied and installed in 2 water pumping stations and 2 sewerage stations. Status of agreements: 6 agreements are signed in the framework of the project (5 for works and 1 for services). In Q it is planned to launch 7 procurements. Implementation of 1 agreement for works is completed. General information

Components to be implemented from project funding 1.Replacement of strategic water supply system valves and creation of water consumption registration zoning 2.Reconstruction of steel pipelines of the water supply 3.Reconstruction of steel pipelines of the strategic water mains 4.Construction of sewage collector on Hanzas Street from KSS 1 to Eksporta Street 5.Construction of sewage collector on Lielirbes / Kalnciema Streets from Dreiliņu Street to K.Ulmaņa gatve 6.Separation of sewerage systems in Teika-Čiekurkalns – reconstruction of "Sirius" rainwater sewage collector 7.Separation of sewerage systems in Teika-Čiekurkalns – construction of industrial sewerage 8.4 diesel generators supplied and installed in 2 water supply pumping stations and 2 sewerage pumping stations 9.Reconstruction of non-pumped flow sewerage ceramic pipes 10.Reconstruction of reinforced concrete sewerage pipelines 11.Expanding water supply and sewerage systems in Šampēteris 12.Expanding water supply and sewerage systems in Dārzciems 13. Technical supervision of agreements on works

Key problems and risks 1.Potential delays in the approved project timeframe:  Reconstruction of reinforced concrete water mains,  Expanding water supply and sewerage systems in Šampēteris,  Separation of sewerage systems in Teika-Čiekurkalns – reconstruction of "Sirius" rainwater sewage collector. 2.Potential solution – extend the deadline for completion of works to 1 June 2010

Timeframe

Increase in cost in the project (price increase) as on 10/04/ /200512/2006 Supply planHYDER evaluation 1Replacement of strategic water supply system valves and creation of water consumption registration zoning 2,189,7653,442,094▲ 2Reconstruction of steel pipelines of the water supply4,749,7445,392,507▲ 3Reconstruction of steel pipelines of the strategic water mains 11,609,37313,223,117▲ 4Construction of sewage collector on Hanzas Street from KSS 1 to Eksporta Street 1,483,8992,389,319▲ 5Construction of sewage collector on Lielirbes / Kalnciema Str.from Dreiliņu Street to K.Ulmaņa gatve 2,099,6805,090,041▲ 6Separation of sewerage systems in Teika-Čiekurkalns – reconstruction of "Sirius" rainwater sewage collector 3,170,8722,821,529▼ 7Separation of sewerage systems in Teika-Čiekurkalns – construction of industrial sewerage 5,150,9891,322,747▼ 84 diesel generators supplied and installed in 2 water supply pumping stations and 2 sewerage pumping stations 867,563962,229▲ 9Reconstruction of non-pumped flow sewerage ceramic pipes 7,322,5836,049,728▼ 10Reconstruction of reinforced concrete sewerage pipelines 6,556,0217,708,299▲ 11Expanding water supply and sewerage systems in Šampēteris 11,149,96211,716,109▲ 12Expanding water supply and sewerage systems in Dārzciems 8,927,8787,545,394▲ 13Technical supervision of agreements on works3,943,3793,681,120▼ 69,221,70671,705,261 +3,4% 10/04/2008+/- Agreements% 7,460,985+57% 14,382, % 3,083, % 6,407,737305% 989,044+14% 13,984,383*+25% 11,622,276*+30% 3,681,120- 7% ,4%

Solutions to increase in costs Upon review of the informative report on increase in costs in EU Cohesion Fund projects the Cabinet of Ministers on 12/02/2008 supported covering the increase in costs of the project “Development of water services in Riga, stage III” in the amount of 30% (EUR 3,117,106.05) SIA “Rīgas ūdens” in cooperation with Riga City Council has supported covering of the remaining 70% of the increase in costs