BUSINESS PLAN FOR WATER SUPPLY AND IRRIGATION SYSTEM OF TILTELSKI BREG

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January 2014.

INVESTOR: Public-Private Partnership Municipality of Titel and Aquaduct

Autors of a business plan:

Aquaduct doo, Belgrade o Zeljko Mardesic o Dragan Radovanovic o Mirjana Stepanovic Minic

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Table of Contents
SUMMARY .............................................................................................. 5 NATIONAL DEVELOPMENT STRATEGY OF IRRIGATION................................. 7 VOJVODINA BASIC FACTS ....................................................................... 9 BASIC DATA OF PROJECT AREA .............................................................. 10 GOALS OF THE STUDY .......................................................................... 11 THE TASK FOR THE STUDY ELABORATION ............................................... 11 BASIC DATA USED FOR THE ELABORATION OF STUDY .............................. 12 METHODOLOGY BASED FOR THE CALCULATION OF THE STUDY ................. 13 DESCRIPTION OF THE PROJECT IDEA...................................................... 14 Principles of irrigation system .............................................................. 14 Implementation in stages .................................................................... 16 Stage I - Development of the primary water supply network ................. 16 Stage II - Development of the submain network ................................. 17 Stage III - Organizations and User Education ...................................... 17 SIGNIFICANCE WITHIN THE SYSTEM - NETWORK ..................................... 17 INVESTMENTS...................................................................................... 18 COSTS INVESTMENT BALANCE - PROFITABILITY ................................... 19 DYNAMIC PLAN OF THE FACILITY CONSTRUCTION.................................... 27 SOCIALLY AND ECONOMIC EFFICIENCY ................................................... 29 SHARE OF AGRICULTURE ...................................................................... 29 ECONOMIC JUSTIFICATION ................................................................... 30 CONCLUSIONS ..................................................................................... 30

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Table of Figures
Figure 1 Landscape of irrigation area ....................................................... 8 Figure 2 Map of Vojvodina ....................................................................... 9 Figure 3 map of Republic of Serbia ......................................................... 10 Figure 4 Map of Titelski Breg .................................................................. 10 Figure 5 coordinates of project area longitude and latitude ..................... 10 Figure 6 Villages population .................................................................. 11 Figure 7 irrigation system hydomodule .................................................... 13 Figure 8 sub systems CS1 power plant 1, CS2 - power plant 2, CS3 power plant 3 ................................................................................................ 15 Figure 9 Position of main line, blocks and hydrants in subsystem ................ 15 Figure 10 Soil characteristic or project area ............................................. 16 Figure 11 Investment calculation per Pumping Plant ................................. 18 Figure 12 Graphic of structure of Investment calculation ........................... 18 Figure 13 cash flow graphic of system .................................................... 23 Figure 14 balance of investment of whole system ..................................... 24 Figure 15 cash flow of pumping plant 1 ................................................... 25 Figure 16 cash flow of pumping plant 2 ................................................... 25 Figure 17 cash flow of pumping plant 3 ................................................... 26 Figure 18 graphic of balance for pumping plant 1,2,3 ................................ 26 Figure 19 dynamic plan of project ........................................................... 28

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SUMMARY
Agriculture at the Titel plateau has a considerable scope for increasing production and efficiency, and the appropriate support could become a growth engine of the regional economy. Earlier attempts towards the development of irrigation Titelskog Brega not give noticeable results. Based on past experience, it is clear that the complex problem of introducing irrigation as permanent measures can be effectively and efficiently solved only in a systematic and comprehensive manner. For this reason, it made feasibility study of irrigation of Titel hill, whose objectives are: define the production program of construction of new irrigation systems Infrastructural irrigation equipment, define a new concept of sustainable use of protected goods, Define the concept of sustainable management of natural resources, Provide new concept of agriculture and market opportunities as a result of irrigation, Economic viability of investments in irrigation in the project area, attracting foreign capital, Scope of the study is thus not limited to the issue of installing irrigation equipment, because such a practice resulted in several failures. Instead, the study responded to much broader complementary questions, such as: the development of producer associations, farmer education, post - harvest activities, operation and maintenance of equipment, marketing and others. System is adapted for safety in food production, to assure the efficient use of water resources, as well as adapting to climate conditions and the quality of the soil. In terms of climate, soil and hydrological conditions in the territory of Titel hill there are good opportunities for the development of irrigation. Previous experience with the development of irrigation caution that is necessary rational approach, which is achieved through the phased development, which results in the following: Investments are deferred and will be implemented in the later stages of construction, At the same time generating income for the further expansion of the system, Gain the valuable experience related to the development, use and management systems. Surfaces covered by the plan for irrigation development are shown in Figure 1
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Assessing the profitability of the project was conducted in order to test the viability of the irrigation project Titel hill. Criteria for the economic analysis are: phased implementation of the project - PP1 , PP2 , PP3 (PP pumping plant) water Supply the secondary network each block the distribution network of farmers Involvement of water users is the scheme the first year of construction 50 % of the area is irrigated the second year of construction joining another 40 % of the surface, or up to 90 % the third year after construction source include the last 10 % of the area or the total projected area under the system Energy consumption is calculated according to the same scheme kosiscenja water (fee collection of used water) Price of electricity consumption is the actual current market prices Operation and Maintenance Team 15 workers In orchards and vegetable gardens made the correlation with various fruits , vegetables and vineyards . The main effects of irrigation of crops: Irrigation allows the use of an additional 20 % of the land for a double harvest. The share of traditional crops is drastically reduced, Land used for the production of fodder crops was reduced by 45%. In other words, the same amount of food can be produced on the surface of the previous 55 %. As a result, more land will be allocated for the production of industrial crops. When we add 20 % of the second harvest, area under commercial crops will grow. The main effects of irrigation of orchards and vegetable gardens: fruits and egetables positively respond to controlled water supply, combined with the plication of liquid fertilizer - fertigation. For this reason is the additional yield that can be expected outstanding, a net bonus of quality can create 40-50 % higher profits, thanks in part to the long shelf life of healthy fruits and vegetables Calculations of profitability show that the project profitable in the designed period, and that the investment will be returned within the time period of 10 years. General conclusions: 1. Cost-benefit analysis provides a clear and strong ability of the program to be sustainable. 2. Great social and economic benefits are potential new jobs in agriculture and even more in related sectors.

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3. The project provides significant stability of agriculture and agro industrial sector. 4. Analysis of risk factors does not indicate a serious threat.

NATIONAL DEVELOPMENT STRATEGY OF IRRIGATION

After the democratic changes in Serbia, one of the main tasks of the new government is the revival and development of the economy, ruined during the period of the previous regime. In this context, agriculture is of special importance because it is the industry based on the total development of the economy and society. On the other hand, it is evident that an increase in agricultural production can not be imagined without irrigation development. Hence, it is understandable that irrigation development in Serbia is one of the priorities of agricultural policy in the Ministry of Agriculture and Water Resources. Bearing in mind the structure of our population and the characteristics of their land development plans for irrigation must be adapted to the specific conditions of Serbian agriculture. Hence, it is important that future development of the irrigation plans in two main technical directions, one of which included the construction of large systems , an area of several thousand hectares (which now belong to the plant in socially owned ), while the other was related to smaller systems on the area up to 100 ha. Based on the known physical-geographical characteristics of the Serbian and distribution, quantity and quality of land and water resources, made to the plan implementation phase of the irrigation system. It is understandable that the first build irrigation systems that would provide the largest and fastesteffects, which is very important in terms of promoting a new approach to the development of irrigation. The current status of irrigation in Serbia does not match the potential economic and social importance of these activities. Irrigation with us is treated as an additional measure of stabilization of agricultural production, which offset the adverse effects of drought. This, narrow view of irrigation, with irrigation at campaign approach implies retention of traditional agriculture and the classic structure of production. The new, modern approach to irrigation, involves major changes in the entire agricultural sector and the government policy in agriculture. It is necessary to
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create such a framework to irrigation rationally fit into the whole system of agricultural production and becomes an important factor in the development of the agricultural sector. This approach requires a transformation of the food industry and dependent industries. Intensive irrigation development, together with a significant increase in agricultural production conditions, and proper adjustment of the structure of the food industry is a way to achieve real economic effects and justify the investment in the construction of irrigation systems. National Irrigation Strategy can be implemented through appropriate structural measures of state policy in agriculture. In this regard, it should be noted that the strategy of intensive irrigation development implies a change in the attitude of society towards agro - complex. The vision of Serbia in the coming decades, agro - complex should occupy the place it deserves, considering the natural and social conditions and level of development of our country.

Based on "Spatial Development Strategy of the Republic of Serbia" in accordance with the vision, objectives and spatial concept development, longterm vision of the Republic of Serbia by 2020, we made project of irrigation of Titelski Breg plateau.

Figure 1 Landscape of irrigation area

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VOJVODINA BASIC FACTS

Vojvodina is autonomous province of citizens who live in it is a constituent part of the Republic of Serbia. It is mostly a low-lend area, intersected by three navigable rivers - the Danube, Tisa and Sava, as well as a canal network, roads and railways, thus connecting the Central and Western Europe to the Balkans and the Middle East. The most significant links are Corridor X for the road transport and the Danube, the Pan European Transport Corridor VII for the water transport. Vojvodina also has the oldest National Park Fruska Gora, the hills on whose slopes 17 monasteries have been built over the centuries. Vojvodina is characterized by arable land of good overall economic and cultural development, great population density and demographic diversity. Vojvodina is a region which traditionally fosters multi lingualism, multi culturalism and multi confessionalisam. The basic facts: Capital: Novi Sad, population 298 139 Total area: 21 506 sq km

Precipitation: annual rainfall as 686 mm, with 122 rainy days.

Figure 2 Map of Vojvodina

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BASIC DATA OF PROJECT AREA

Municipality of Titel, Titel city, located at the mouth of the river Begej in Tisa, not far from where it flows into the Tisa Basin, on the southern slopes of the plateau Titelski breg.

Figure 4 Map of Titelski Breg

Figure 3 map of Republic of Serbia

Coordinates of project North East West South 451749.57 451225.67 451657.85 451225.67

Figure 5 coordinates of project area longitude and latitude

Near the town of Titel is palced tableland (elevation 110 130 m above sea level which extends between Moorin, Lok, Vilovo, Titel and river near Titel,

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Tisea. Titel is also the seat of the municipality in which, near the town of Titel, find and villages Vilovo, Gardinovci, Lok, Moorin and ajka. In the municipality of Titel live 15 554 inhabitants according to the census of 2011, as follows:

VILAGE Titel Sajkas Mosorin Gardinovci Lok Vilovo

No inhabitants 5547 4337 2563 1282 1112 1013

Figure 6 Villages population

The number of unemployed, according to data of Nacinal Employment Service is 1399.

GOALS OF THE STUDY

The primary objective is the development of agricultural production in Titel plateau and with the use of comparative advantages and in attracting foreign capital, infrastructure equipment, the definition of new concepts of sustainable use of protected goods, defining the concept of sustainable management of natural resources.

THE TASK FOR THE STUDY ELABORATION

On the basis of the decision to approach the problem of stabilization of agricultural production in Titel plateau, municipal authorities have decided to solve the problem of water supply. It should be noted that the growing season in 2012 was particularly unfavorable.

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Area which is planned to bring water consists mainly of private property residents Titel, Lok, Vilovo and Moorin. Gross area of Titel plateaul is 8000 ha, and all area is designed for intensive production. Intensive farming, vegetable and fruit production, in order to obtain maximum yield and quality in the long run, it is necessary to design an irrigation system. The project envisages bringing water to certain points, hydrants, center of block, for filtration and flow control, than delivered thru submains to each farmer field. The system will be sized based on climate data, soil analysis and available resources. The irrigation systems will be carried out in stages. Each stage will be a functional unit.

BASIC DATA USED FOR THE ELABORATION OF STUDY

For elaboration of the preliminary design for irrigation of Titelski breg the following base was used: Maps 1:5000 Pepublic Geodetic Authority Belo Blato 21, 22, 23, 24, 25, 31, 32, 33, 34, 35, 36, 41, 42, 43, 44, 45, 46, 47; Petrovaradin 30, 40; Slankamen 2, 3, 4, 5, 6, 7 Elevation interval 0.5 m The terrain topography is flat with pronounced micro denivelations of the terrain 3 m. General elevation is betveen levels 128 m to 114m with general gradient from northeast to southwest Climate data get from Republic Hidrometeorological Service of Serbia Soil data form: Soils of Vojvodina, Novi Sad

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METHODOLOGY BASED FOR THE CALCULATION OF THE STUDY

Monthly evapotranspiration calculated by Penman-Monteith method FAO 56
Jan precipitation deficit 1 Corn 2 wheat 3 sunflower 4 soybeen 5 vegetable 6 apple 7 potato 8 alfa alfa 9 beans 10 vegetale 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Feb 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Mar Apr Maj 5.6 50.7 0.0 0.0 12.1 30.7 12.0 39.7 3.0 0.0 0.5 15.3 0.06 85.0 0.07 Jun 88.0 5.9 57.0 0.0 54.9 78.2 91.3 70.3 36.9 0.0 Jul 134.8 0.0 127.8 0.0 113.9 106.8 128.1 98.2 113.0 71.0 Avg Sep Okt 0.0 1.1 0.0 5.3 0.0 0.0 0.0 0.3 0.0 0.0 Nov 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Dec 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 8.9 34.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.2 0.0 14.5 0.0 0.0 0.0 0.0

92.5 6.0 0.0 0.0 95.6 1.1 42.6 64.2 74.1 0.0 54.3 0.0 72.6 0.0 87.0 43.7 53.1 0.0 94.2 53.6

nett irrigation requirements mm/day 0.0 mm/month 0.0 l/s/ha 0.00 covered area % 0.0 Hydromodul(l/s/ha) 0.00

0.0 0.0 0.1 0.0 0.4 1.9 0.00 0.00 0.01 0.0 5.0 8.0 0.00 0.03 0.09

1.7 2.9 1.7 0.3 0.0 0.0 0.0 66.1 107.1 72.1 8.9 0.1 0.0 0.0 0.26 0.40 0.27 0.03 0.00 0.00 0.00 87.0 92.0 93.0 54.0 7.0 0.0 0.0 0.29 0.43 0.29 0.06 0.01 0.00 0.00

Figure 7 irrigation system hydomodule

Low frame in project area: o The Law on Planning and Construction o New regulations about contents, scope and mode of designing of prefeasibility study and feasibility study for construction structures o The Law on Occupational Safety and Health o The Fire Protection Law o The Water Act o The Law on Water Regime o The Law on Environmental Protection o The Regulations on the Contents of Technical Documentation to be Submitted in the Procedure for Obtaining the Water Management Approval and Water Management Permit

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DESCRIPTION OF THE PROJECT IDEA

For the intensive crop farming, vegetable growing and fruit growing, and for the purpose of getting maximal and quality yield in a longer time period, it was necessary to design irrigation system. Based on the decision to address the issue of stabilization of agricultural production on Titelski breg, the administration of the Municipality Titel has reached the decision to solve the problem of water supply. The area planned to be supplied by water consists primarily of private properties held by the inhabitants of Titel, Lok, Vilovo and Mosorin. Gross area of Titelski breg is 8000 ha, and whole area is planned for agricultural production with irrigation. In accordance with this decision, the Aquaduct has made preliminary design for water supply of Titelski breg plateau.

Principles of irrigation system

The irrigation system of Titelski breg plateau is based on the use of natural resources, water from Tisa. Water tapping would be at the banks of the river Tisa and pumps would elevate it onto the higher grounds of Titelski breg, and then, by pipeline water would be supplied to users. This project foresees the supply of water up to specified points, hydrants, and from there to each individual property, i.e. farmers field. Total surface is divided into three subsystems, i.e. pump stations (PP 1-3) that operate independently, or as one system. To put idea in life, and to encourage farmers to participate in system, basic parameters are:

All farmers get water under the same condition Irrigation interval 1-3 days Water delivered up to the field, including on farm equipment Bill for used water depend on consumption o Water meter positioned on power plant o Hydrants on center of block o On infield head control water meter for every farmer
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Education of farmers for new technology, acceptance of new rules and standards All flow measurements in real time visible on central controller

Figure 8 sub systems CS1 power plant 1, CS2 - power plant 2, CS3 power plant 3

Primary pipeline is distributed among existing roads hydraulically connected into the ring. At certain places, hydrants are going to be placed supplying surfaces of 80 up to 150 ha with water. Places, where hydrants are located, are positioned in central places of fields and cover two lengths of fields 2x400m.

Figure 9 Position of main line, blocks and hydrants in subsystem

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The system is sized according to the climate data, soil analysis and available resources. Soil is CHERNOZEM, first class with best mechanic, chemical and water content characteristics.

Figure 10 Soil characteristic or project area

The system is designed to work in two ways: As a fully automated with remote control or The Full manual on request and optionally of each user Fertilization is done centrally for each field, so that a group of users using the same equipment for the implementation of chemicals. Monitoring water consumption is done centrally and through the water meter at each pumping station, ie water meters set by sections, fields. According to the capabilities and needs of investors, the system can be done in stages. Each stage is functional by itself and the realization of all phases or performance of the whole system, get the right performance and operating characteristics of the system.

Implementation in stages
Irrigation system Titelski Breg plateau will be implemented in stages: Stage I - Development of the primary water supply network Pumping plant The primary pipeline
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Hydrant inf the fields Stage II - Development of the submain network Secondary network to the farmers field Development of executive control units Set up automatic and measuring equipment Stage III - Organizations and User Education Definition of the operation and maintenance of the primary network Defining the rules of use of irrigation water community Organize regular work User education for operation and maintenance of the irrigation system using modern technology

SIGNIFICANCE WITHIN THE SYSTEM - NETWORK

For the already existing production at Titelski breg, apart from the direct sales, there is also the possibility of further processing accompanied by reaching higher processing level and thereby also increase in sales. In the municipality Titel, there is a fruit and vegetable processing factory "Titel Brand" doo, established in 1961 as a plant belonging to the agricultural producers' cooperative in Titel. New facilities were built in 1977 and they operate today within those frameworks and installed capacities. Production plants, cooler, head office building, storages etc. are located in a tarred street, with regulated infrastructure, pavement, street lighting on one hand, and on the other they are located immediately beside the railway line. The communications of the plateau and pavements within the facility complex are appropriately regulated and they provide communication between all parts of it as well as between plots as a whole. Plant is build for fruit and vegetable processing and preservation.

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INVESTMENTS
Total investment required for the water supply of Titelski breg from the river Tisa and the distribution of the irrigation system to each household in the area of 6325 ha is EUR 30 000 000.

INVESTMENT
A - DESIGN Survey Design A B - WATER SUPPLY SYSTEM Pumping plant Distribution system Block distribution network Automation for blocks Central unit automation B A+B C - ELECTRICITY SUPPLY D - ON FARM IRRIGATION SUM A+B+C+D

PP1 1,800 ha 150,000.00 150,000.00 300,000.00 900,000.00 2,600,000.00 1,900,000.00 20,000.00 50,000.00 5,470,000.00 5,770,000.00 1,000,000.00 2,500,000.00 9,270,000.00

PP2 2,765 ha 150,000.00 200,000.00 350,000.00

PP3 1,760 ha 150,000.00 150,000.00 300,000.00 800,000.00 2,800,000.00 1,700,000.00 20,000.00 50,000.00 5,370,000.00 5,670,000.00 1,000,000.00 2,400,000.00 9,070,000.00

SUM 6,325 ha 450,000.00 500,000.00 950,000.00 2,950,000.00 7,950,000.00 6,200,000.00 60,000.00 150,000.00 17,310,000.00 18,260,000.00 3,000,000.00 8,740,000.00 30,000,000

1,250,000.00 2,550,000.00 2,600,000.00 20,000.00 50,000.00 6,470,000.00 6,820,000.00 1,000,000.00 3,840,000.00 11,660,000.00

Figure 11 Investment calculation per Pumping Plant

20,000,000.00 18,000,000.00 16,000,000.00 14,000,000.00 12,000,000.00 10,000,000.00 8,000,000.00 6,000,000.00 4,000,000.00 2,000,000.00 PP1 PP2 PP3 SUM A - DESIGN B - WATER SUPPLY SYSTEM C - ELECTRICITY SUPPLY D - ON FARM IRRIGATION

Figure 12 Graphic of structure of Investment calculation

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COSTS INVESTMENT BALANCE - PROFITABILITY

Calculation of profitability of irrigation of Titelski breg plateau are based on criteria: 1. Period of investment is 10 years 2. Interest rate 1.5% 3. Contribution of farmers in system increasing in three years for every pumping plant 3.1. 50 % during the first year of operation, 3.2. 40% during the second year of operation and 3.3. 10 % during the third year 4. Electricity consumption increase in same pattern as farmer contribute in operating system 4.1. Electricity price high tariff 67% - 0.04 eur/kWh 4.2. Electricity price low tariff 33% - 0.013 eur/kWh 4.3. Consumed power 4.7 eur/kW installed power 5. Operation and maintenance team 15 skilled workers 5.1. Operation team increase according development of construction 6. Operation equipment and spare parts 0.5% of investment per year 7. Price of selling water depend on distributed volume 7.1. Maximum price of delivered water is 0.39 eur/m3 for 1,500 operation h/season

2014 No. 1 2 3 4 Pumping plant 2 Electricity supply On farm irrigation/PP2/ Interest 1,5%/per year Currency/Euro 6,820,000.00 3,000,000.00 1,920,000.00 675,000.00 12,415,000.00

Total investment

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2015 No. 1 2 3 4 Total 5 6 7

Pumping plant 1 On farm irrigation/PP1/ On farm irrigation/PP2/ Interest 1,5%/ per year investment (A) Operations team expenses Operations&maintenance exp. Energy consumption

Currency/Euro 5,770,000.00 1,250,000.00 1,536,000.00 675,000.00 9,231,000.00 60,000.00 50,000.00 119,499.00 229,499.00 9,460,499.00 1,341,015.00 1,341,015.00

Total other costs (B) TOTAL EXPENDITURE (A+B) 1 Income of selling water 0,39 /m3 TOTAL INCOME

2016 No. Pumping plant 3 1 On farm irrigation /PP1/ 2 On farm irrigation /PP2/ 3 On farm irrigation /PP3/ 4 Interest 1,5%/ per year 5 Total investment (A) Operations team expenses 6 Operations&maintenance exp. 7 Energy consumption 8 Total other costs (B) TOTAL EXPENDITURE (A+B) 1 Income of selling water 0,39 /m3 TOTAL INCOME

Currency/Euro 5,670,000.00 1,000,000.00 384,000.00 1,200,000.00 675,000.00 8,929,000.00 120,000.00 100,000.00 255,825.00 475,825.00 9,404,825.00 3,288,402.00 3,288,402.00

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2017 No. On farm irrigation /PP1/ 1 On farm irrigation /PP3/ 2 Interest 1,5%/ per year 3 Total investment (A) Operations team expenses 4 Operations&maintenance exp. 5 Energy consumption 6 Total other costs (B) TOTAL EXPENDITURE (A+B) 1 Income of selling water 0,39 /m3 TOTAL INCOME

Currency/Euro 250,000.00 1,200,000.00 675,000.00 2,125,000.00 180,000.00 150,000.00 382,139.00 712,139.00 2,837,139.00 5,111,891.00 5,111,891.00

2018 No. 1 Interest 1,5%/ per year 2 3 4 1 Operations team expenses Operations&maintenance exp. Energy consumption Income of selling water 0,39 /m3

Currency/Euro 675,000.00 180,000.00 150,000.00 417,918.00 1,422,918.00 5,418,441.00 5,418,441.00

TOTAL EXPENDITURE TOTAL INCOME

2019 No. 1 Interest 1,5%/ per year 2 3 4 1 Operations team expenses Operations&maintenance exp. Energy consumption Income of selling water 0,39 /m3

Currency/Euro 675,000.00 180,000.00 150,000.00 424,869.00 1,429,869.00 5,528,136.00 5,528,136.00

TOTAL EXPENDITURE TOTAL INCOME

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2020 No. 1 Interest 1,5%/ per year 2 3 4 1 Operations team expenses Operations&maintenance exp. Energy consumption Income of selling water 0,39 /m3

Currency/Euro 675,000.00 180,000.00 150,000.00 424,869.00 1,429,869.00 5,528,136.00 5,528,136.00

TOTAL EXPENDITURE TOTAL INCOME

2021 No. 1 Interest 1,5%/ per year 2 3 4 1 Operations team expenses Operations&maintenance exp. Energy consumption Income of selling water 0,39 /m3

Currency/Euro 675,000.00 180,000.00 150,000.00 424,869.00 1,429,869.00 5,528,136.00 5,528,136.00

TOTAL EXPENDITURE TOTAL INCOME

2022 No. 1 Interest 1,5%/ per year 2 Operations team expenses 3 Operations&maintenance exp. 4 Energy consumption TOTAL EXPENDITURE 1 Income of selling water 0,39 /m3 TOTAL INCOME

Currency/Euro 675,000.00 180,000.00 150,000.00 424,869.00 1,429,869.00 5,528,136.00 5,528,136.00

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2023 No. 1 Interest 1,5%/ per year 2 Operations team expenses 3 Operations&maintenance exp. 4 Energy consumption TOTAL EXPENDITURE 1 Income of selling water 0,39 /m3 TOTAL INCOME

Currency/Euro 675,000.00 180,000.00 150,000.00 424,869.00 1,429,869.00 5,528,136.00 5,528,136.00

TOTAL INVESTMENT EXPENDITURE TOTAL INCOME OF SELLING WATER NET INCOME

42,689,726.00 42,800,430.00 110,704.00

CASH FLOW OF IRRIGATION PROJECT

sum investment expences 13,000,000 sum operation expences

8,000,000

3,000,000 110,704 2023

-2,000,000

2014

2015

2016

2017

2018

2019

2020

2021

2022

-3,987,564 -7,000,000 -8,085,831 -12,415,000 -12,184,098 -16,282,366 -20,534,484 -22,000,000 -24,376,156 -27,000,000 -26,650,907 -20,380,633

-12,000,000

-17,000,000

Figure 13 cash flow graphic of system

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2014
1 2 3 4 5 6 7 8

2015 5,770,000 5,670,000 250,000

2016

2017

2018

2019

2020

2021

2022
9

2023
10

SUM

6,820,000

3,000,000 1,250,000 1,536,000 8,556,000 675,000 9,231,000 675,000 675,000 675,000 675,000 60,000 50,000 119,499 119,499 120,000 100,000 255,825 97,051 158,774 1,200,000 1,450,000 675,000 2,125,000

YEAR INVESTMENT EXPENCES WATER SUPPLY PP1 WATER SUPPLY PP2 WATER SUPPLY PP3 ELECREICITY SUPPLY ON FARM IRRIGATION PP1 ON FARM IRRIGATION PP2 ON FARM IRRIGATION PP3 1,000,000 384,000 1,200,000 8,254,000 675,000 8,929,000 675,000 675,000 675,000 675,000

1,920,000

sum

11,740,000 675,000 12,415,000

675,000 675,000

675,000 675,000

5,770,000 6,820,000 5,670,000 3,000,000 2,500,000 3,840,000 2,400,000 30,000,000 6,750,000 36,750,000

Figure 14 balance of investment of whole system

12,415,000

229,499 9,460,499

475,825 9,404,825

180,000 150,000 382,139 128,948 168,593 84,599 712,139 2,837,139

180,000 150,000 417,918 136,922 168,593 112,403 747,918 1,422,918

180,000 150,000 424,869 136,922 168,593 119,354 754,869 1,429,869

180,000 150,000 424,869 136,922 168,593 119,354 754,869 1,429,869

180,000 150,000 424,869 136,922 168,593 119,354 754,869 1,429,869 5,528,136 -8,085,831

180,000 150,000 424,869 136,922 168,593 119,354 754,869 1,429,869 5,528,136 -3,987,564

180,000 150,000 424,869 136,922 168,593 119,354 754,869 1,429,869 5,528,136 110,704

1,440,000 1,200,000 3,299,726 1,047,533 1,458,421 793,772 5,939,726 42,689,726 42,800,430

Business plan Irrigation system of Titelski Breg Page 24

INTEREST 1.5%/YEAR sum investment expences OPERATION EXPENCES OPERATION TEAM O&M EQUIPMENT ELECTRICITY CONSUMPTION ELECTRICITY CONSUMPTION PP1 ELECTRICITY CONSUMPTION PP2 ELECTRICITY CONSUMPTION PP3 sum operation expences TOTAL INVESTMENT INCOME SELL WATER 0.39 EUR/m3 BALANCE

1,341,015 3,288,402 5,111,891 5,418,441 5,528,136 5,528,136 -12,415,000 -20,534,484 -26,650,907 -24,376,156 -20,380,633 -16,282,366 -12,184,098

January 2014.

CASH FLOW FOR PUMPING PLANT 1

8000 6000 4000 000 EUR 2000 0 -2000 -4000 -6000 -8000 -10000 YEAR INVESTMENT INTEREST O&M ELECTRICITY CONSUPTION SELL WATER - INCOME BALANCE 150 2014 1 2015 2 150 2016 3 150 110 97 875 2017 4 250 150 110 129 150 110 137 150 110 137 150 110 137 150 110 137 150 110 137 150 110 137 1,246 2018 5 2019 6 2020 7 2021 8 2022 9 2023 10

7,020 1,000

1,574 1,749 1,749 1,749 1,749 1,749 1,749

-150 -7,320 -7,802 -6,867 -5,515 -4,163 -2,811 -1,458 -106

Figure 15 cash flow of pumping plant 1

CASH FLOW FOR PUMPING PLANT 2

15000 10000 000 EUR 5000 0 -5000 -10000 -15000 CASH FLOW PP1 YEAR INVESTMENT INTEREST O&M ELECTRICITY CONSUPTION SELL WATER - INCOME BALANCE 1 2014 1 150 2 2015 2 150 3 2016 3 384 150 110 159 4 2017 4 0 150 110 169 150 110 169 150 110 169 150 110 169 150 110 169 150 110 169 150 110 169 5 2018 5 6 2019 6 7 2020 7 8 2021 8 9 2022 9 10 2023 10

11,740 1,536

2,414 2,682 2,682 2,682 2,682 2,682 2,682 2,682 -11,890-13,576-11,965 -9,712 -7,458 -5,205 -2,951 -698 1,556 3,809

Figure 16 cash flow of pumping plant 2

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January 2014.

CASH FLOW FOR PUMPING PLANT 3

8000 6000 4000 2000 0 -2000 -4000 -6000 -8000 -10000 CASH FLOW PP1 YEAR INVESTMENT INTEREST O&M ELECTRICITY CONSUPTION SELL WATER - INCOME BALANCE -150 150

000 EUR

1 2014 1

2 2015 2 0 150

3 2016 3 150 0 0 0

4 2017 4 150 110 85 856

5 2018 5 150 110 112 987

6 2019 6 150 110 119

7 2020 7 150 110 119

8 2021 8 150 110 119

9 2022 9 150 110 119

10 2023 10 150 110 119

6,870 1,200

1,097 1,097 1,097 1,097 1,097

-300 -7,320 -8,009 -7,394 -6,677 -5,959 -5,241 -4,524 -3,806

Figure 17 cash flow of pumping plant 3

PP2 BALANCE 6,000,000 4,000,000 2,000,000 0 2014 -2,000,000 -4,000,000 -6,000,000 -8,000,000 -10,000,000 -12,000,000 -14,000,000 2015 2016 2017

PP3 BALANCE

PP1 BALANCE

2018

2019

2020

2021

2022

2023

Figure 18 graphic of balance for pumping plant 1,2,3

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January 2014.

DYNAMIC PLAN OF THE FACILITY CONSTRUCTION

Stage I Construction of the primary water supply network Water intake Primary pipeline Hydrant positions on fields

Time for completion of the first stage is three years. Stage II- Construction of the secondary network on fields The distribution of the secondary network on fields The construction of the executable control units Installing automation and measuring equipment

Time for completion of this stage is three years. Stage III Organization and education of users Defining the organization of production and maintenance of primary network

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January 2014.

No

year

2014

2015

2016

2017

2018

2019 7 8 9 10 11 12

ACITIVITIES

5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6

1 SURVEY & DESIGN

2 ELECREICITY SUPPLY

3 CONSTARCTION OF SUBSYSTEM CS2

3.1 Water supply

3.2 ON FARM ACTIVITIES subsystem cs2

4 CONSTARCTION OF SUBSYSTEM CS1

4.1 Water supply

4.2 ON FARM ACTIVITIES subsystem cs1

5 CONSTARCTION OF SUBSYSTEM CS3

5.1 Water supply

5.2 ON FARM ACTIVITIES subsystem cs1

3.3 CS1 - INCOME 50%

50%

90%

100% 90% 50%

100% 100% 90%

100% 100% 100%

Figure 19 dynamic plan of project

4.3 CS2 - INCOME

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5.3 CS3 - INCOME

January 2014.

SOCIALLY AND ECONOMIC EFFICIENCY

The significance of agriculture for the economic structure of Serbia, measured by the share of GDP in total employment is very large. Since the beginning of 2000 the share of agricultural production in the achieved GDP is being permanently reduced. According to the official data, there is 21, 4% employees employed in the agriculture. During the period of transition, the ownership structure of agricultural land in Serbia has become very complex, namely: from micro-farms owned by farmers or heirs of the restituted land, through small family owned agricultural firms, up to large family estates. The largest number of agricultural estates practice self-sufficient farming, while only 20% is oriented to the market production. According to the data of Surveying Institute, privately owned is 67% of the land, state-owned are 30%, socially owned are 2% and other (cooperative, mixed etc.) is 1%. The main characteristic of changes within agricultural structure of Serbia during transition is that it was made by altering state or social ownership into private. Private estate was not the subject matter of significant transaction where large capital was involved. The implementation of this project would contribute to put private estates into the foreground. Correspondingly, new jobs would be created and the employment of local population would be increased. The use of modern agro technical measures, which in the surrounding agriculturally developed countries, give exceptional results, would make significant income of agriculture, which would be direct actuator of local development.

SHARE OF AGRICULTURE
Municipalities having less than 50 000 inhabitants are considered as rural areas. Taking the structure of employees in the municipality Titel as starting point, and bearing in mind that there is 10 % unemployed from the total number of inhabitants, it is necessary to open the appropriate number of jobs, which would, by introducing new technologies and by carrying out the preliminary design for irrigation of Titelski breg, be completely satisfied. We
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January 2014.

have to bear in mind current seed structure, which is chosen because there is no possibility of irrigation, and the yield practically depends on the weather conditions with no possibility to guarantee yield enabling higher and constant income from agriculture. The structure made of 40 45 sunflower and the rest is soy, significantly changed in view of technological measures and by higher and constant income. % of corn, 25 30 % of wheat, 15 % of clover, barley green beans could be seed cultures, which by using appropriate using irrigation system bring significantly

ECONOMIC JUSTIFICATION
The advantages of introducing the irrigation system for Titelski breg are as follow: Quality and constant production Apart from the irrigation system, the synergy of soil and weather conditions is going to result in the increase and continuity of production Possibility of finalizing products by using existing processing capacities Increase in consumption and social standard The possibility of export

CONCLUSIONS
The experiences in the world show that the development of irrigation has played crucial role in the increase of agricultural production and coverage of the needs of global population in food, which has rapidly grown in the 20th century. In the same period of time, the irrigation worldwide has experienced a large development, because, when compared to 50 million hectares at the beginning of the century, the surfaces being under irrigation systems were increased to 250 million hectares. The worldwide trend in the development of irrigation has, regretfully, not included our country. The irrigation systems already constructed cover only 180 000 hectares, and they are actually functioning on only 30 000 ha (that means on less than 1% of the available land). Serbia is yet to be included into the worldwide trend of the development of irrigation. The improvement of irrigation must be one of the priorities of the national policy for economic development.

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January 2014.

The agriculture is by far the largest consumer of the water worldwide, with annual consumption of 2500 cubic kilometers of water (which is approximately 70 % of the total water consumption worldwide). Precisely because of this fact, the subject matter of rationalization of water consumption used for irrigation is very pressing issue in the world. In this respect, two relatively new concepts in the development of irrigation in the world are being considered now. The first one is the concept of "water productivity", while the other one refers to the term "virtual water". In Serbia, for now, there is no question of rationalization of water consumption used for irrigation, nor is it necessary to improve water productivity due to the fact that the irrigation in our country is extremely underdeveloped. Those problems await us yet in the future, after the expected intensive development of irrigation. Water management in agricultural regions will have to be considered more seriously and rational consumption of water used for irrigation, by respecting criteria, will have to be planned.

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