Eastern European Markets
September, 21. 2005

St Petersburg's Southwest Wastewater Treatment Plant is seen to completion

St Petersburg's Southwest Wastewater Treatment Plant will be inaugurated on September 22, 2005. The plant is the most significant environmental investment to improve the state of the Baltic Sea in recent years. St Petersburg has the same size of population as the whole of Finland and prior to the completion of the plant almost 75% of city's wastewater has been treated. St Petersburg's new Southwest Plant will treat the wastewater of 713,000 inhabitants. Upon the completion of the plant, about 85% of the wastewater of St Petersburg's population will be treated.

Large-scale international cooperation in financing and implementation

The construction of St Petersburg's Southwest Wastewater Treatment Plant was actually started in the mid-1980s, but the works were gradually terminated in the early 1990s due to the shortage of financing. By then 30-40% of the concrete structures had been completed. After numerous trials, a new project preparation phase began in 2000 with technical studies commissioned by the Nordic Investment Bank (NIB), the Finnish Ministry of the Environment, the Swedish Agency for International Development Cooperation (Sida) and Vodokanal of St Petersburg. A workable implementation model was finally established during the first quarter of 2001, when the Nordic construction companies NCC, Skanska and YIT entered into an agreement with Vodokanal and City of St Petersburg to develop the project on a Public Private Partnership (PPP) basis. The Southwest Wastewater Treatment Plant is the first major PPP project carried out in Russia. The financing and implementation model was custom made for the purpose during a two-year negotiation period in 2001-2002.

The implementation and financing of the project entail large-scale international cooperation. The total price of the project will exceed EUR 190 million. The actual treatment plant is being financed by the Nordic Investment Bank (NIB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), Finnfund and Swedfund with loans totalling EUR 107.8 million. NCC, Skanska and YIT, the Nordic Environment Finance Corporation (NEFCO), and Vodokanal of St Petersburg set up a special purpose company LLC Nordvod and invested to that risk capital to the value of EUR 15.2 million. Finland, Sweden and the Northern Dimension Environmental Partnership (NDEP) supported the project with grants totalling EUR 26.8 million. As a part of the whole project Vodokanal of St. Petersburg has further invested about EUR 15 million on the influent infrastructures. Additionally, the sludge incineration plant will be financed with a grant of EUR 24 million from the European Commission and a loan of about EUR 6 million from EIB.

NCC, Skanska and YIT established a joint venture, SWTP Construction Oy, to handle the design and construction of the plant. Construction started at the beginning of 2003. Vodokanal has played a decisive role, particularly in seeking permits, liaising with the authorities and attending to public relations. The treatment plant was completed according to an agreed schedule in early September 2005 at a total cost of EUR 2 million under budget. The project includes a 12-year operation agreement. A company named Ekovod has been established for the purpose. It is owned by the same parties as LLC Nordvod.

The treatment plant reduces the nutrient loading of the Baltic Sea

The Southwest Wastewater Treatment Plant of St Petersburg is a modern biological plant utilizing a process for the biological removal of phosphorus and nitrogen. For the sludge handling, the construction of an incineration plant has just been started. It is planned to be completed in the first half of 2007.

The rated values of the Southwest Wastewater Treatment Plant are:

Average flow 330,000 m3/d 3.8 m3/s
Maximum flow (biological portion) 9.1 m3/s
Maximum flow (pre-treatment) 12.8 m3/s
Population equivalent 713,000 people
BOD5 load, inflow 45,420 kg/d
Total nitrogen, inflow 9,240 kg/d
Total phosphorus, inflow 1,520 kg/d

The contractor's guaranteed values for the treated wastewater are:

BOD5 15 mg/l
Total nitrogen 10 mg/l
Total phosphorus 1.5 mg/l

These values are achieved by means of a biological nutrient removal process supported with limited use of chemicals.

The decrease in wastewater loading will improve the condition of water bodies in the vicinity of the City of St Petersburg, the utility value of beaches and, over the longer term, the state of the Gulf of Finland and the Baltic Sea as a whole.

Project completion will reduce annual loading in the Gulf of Finland as follows:

organic loading reduction 16,600t BOD5*
nitrogen loading reduction 2200 t totN
phosphorus loading reduction 360 t totP
*BOD = Biochemical oxygen demand

The shallow Baltic Sea is sensitive to environmental changes

About 85 million people live in the Baltic Sea drainage basin. Agriculture is the major source of its nutrient loading. The Gulf of Finland is receiving annually over 6,000 tonnes of phosphorus and 120,000 tonnes of nitrogen originating from agriculture, habitation and industry as well as from the natural load from the areas of the coastal countries. By far the largest single point-source polluter is the city of St Petersburg.

The narrow and shallow Danish Straits are the Baltic Sea's only connection to the North Sea and the Atlantic. As a result, the water in the Baltic Sea basin changes very slowly, on average once in 25-30 years. The Baltic Sea is a shallow brackish water basin with an average depth of about 60 metres and a relatively small water volume. The water salinity is only one-fifth of that of the oceans. About 75 per cent of the freshwater entering the Gulf of Finland is originating from the River Neva and Lake Ladoga.

The stratification of the seawater hinders oxygen transfer to the bottom of the sea. The depths of the Baltic Sea have undergone repeated anaerobic periods. Due to the slow water change, nutrients and detrimental substances, such as chemicals and heavy metals, remain in the Baltic Sea for a long time. For this reason, the flora and fauna of the Baltic Sea are highly sensitive to environmental changes.

Blue-green algae thrive in nutrient-rich warm water. High concentrations of phosphorus in the water towards the end of the summer, coupled with warm weather, cause massive blue-green algal blooms. Under anaerobic conditions the seabed begins to release phosphorus. This chain of events is called internal loading. If phosphorus is transferred to the upper layer of the sea by the strong mixing of water masses, noxious algal blooms will occur.

The Southwest Wastewater Treatment Plant of St Petersburg will reduce the total phosphorous loading into the Gulf of Finland by about 5% and the amount of biologically active phosphorus by approximately by 8%.

About YIT
YIT is a versatile service company that offers technical infrastructure investment and upkeep services for the property and construction sector, industry and telecommunications. In all sectors of operations, the Group’s services cover the entire life cycle of projects. YIT’s main market areas are the Nordic countries, the Baltic States and Russia. The group has about 22,000 employees in eight countries. YIT's share is listed on the Main List of Helsinki Exchanges under the Other Services heading.

For further information:

Matti Rantala; General Director
tel. +7(812) 9434138
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