STATE AUDIT OFFICE
- Press Release -

Skopje 10.03.2026

Public Enterprise “Kolektorski Sistem – Skopje” (Collector System – Skopje) Operating for Over 35 Years Without a Wastewater Collection, Conveyance, and Treatment Permit

In 2024, the Public Enterprise “Kolektorski Sistem – Skopje” (Collector System–Skopje) invoiced only 33% of the treated wastewater, and with accumulated liabilities of 493.108.000 denars (over 8 million euros) and a blocked bank account since its establishment, the enterprise faces serious financial challenges, reduced liquidity, and risks to the sustainability of its operations

The State Audit Office conducted an audit of the financial statements, together with a compliance audit, of the Public Enterprise “Kolektorski Sistem – Skopje” (Collector System – Skopje) for 2024.

Weaknesses, irregularities, and instances of non-compliance in the Public Enterprise’s operations were identified. Due to their significance, an adverse opinion was issued regarding the fairness and objectivity of the 2024 financial statements and compliance with legal regulations, guidelines, and established policies.

The Public Enterprise does not have a complete overview of receivables from related parties and, as of 31 December 2024, had not assessed their collectability or made any value adjustments. In the accounting records and financial statements as of 31 December 2024, receivables from related parties, Public Enterprise “Vodovod” (Water Supply) – Ohrid and Public Enterprise “Vodovod i Kanalizacija” (Water Supply and Sewage) – Struga are recognized for 364.491.000 denars (5.926.683 euros). These receivables were assumed because of a statutory change and relate to users connected to the collector system as of 30 June 2019.

The related parties have access to the connection databases and, until 2020, were responsible for preparing customer invoices. However, they have no economic incentive to take timely action to recover unpaid receivables, as these receivables represent obligations to the Public Enterprise “Kolektorski Sistem – Skopje”. In practice, they often write off such receivables. Due to a lack of analytical support and limited influence over the collection process, no assessment of the collectability of receivables was carried out, resulting in a misrepresentation of the enterprise’s financial position for 2024.

The infrastructure facilities (pipelines, pumping stations, and a wastewater treatment plant), constructed over 35 years ago at a value of 129.948.000 denars (2.112.976 euros), have not yet been registered in the Infrastructure Cadastre, which is part of the Real Estate Cadastre.

Picture 1_ Pumping Station Podmolje              Picture 2_Wastewater Treatment Plant Vraništa

Except for the 812 m² land plot at Pumping Station Podmolje, the Public Enterprise “Collector System–Skopje” does not hold property records for its infrastructure – 40.9 km of pipelines, pumping stations, and a wastewater treatment plant, including the land beneath them.

The portion of the charter capital amounting to 251.452.000 denars (4.088.650 euros), assumed through a status change – merger by acquisition of “Kolektor Struga” (Collector Struga) into the Inter-Municipal Public Enterprise “Proakva” in June 2019, has not yet been registered in the Central Registry of the Republic of North Macedonia.

In 2024, lump-sum legal fees of 519.000 denars (8.439 euros) were paid without supporting documentation under a contract concluded in 2020 for a 10-year term. The contract imposes unfavorable contractual obligations and carries significant financial implications. In case of unilateral termination, the enterprise must provide a 90-day notice and pay a one-time compensation of 1.440.000 denars plus VAT, in addition to the monthly lump sum and related costs during the notice period.

Since its establishment to the date of the audit, the enterprise has not obtained a wastewater collection, conveyance and treatment permit, issued by the Ministry of Agriculture, Forestry and Water Economy (MAFWE). The collector system is not equipped with flow meters to measure wastewater inflow volume and lacks a SCADA system for full operational control and monitoring. The enterprise also lacks backup power generators and does not operate its own information system to record users of the collector network, relying on the systems of the public enterprises “Vodovod” (Water Supply) Ohrid, “Vodovod i Kanalizacija” (Water Supply and Sewage) Struga, and the Public Utility Company “Debarca” for this purpose.

In 2024, only about one-third (33%) of treated wastewater was billed (3.736.453 m³ billed versus 11.300.390 m³ discharged), indicating significant technical and physical deficiencies in the network and high levels of non-revenue water.

Volume of billed and discharged water in m³ for 2024

The data indicate that when groundwater and stormwater are present[1], the ratio of billed to discharged water is higher, whereas when groundwater levels are low, and stormwater is not entering the system, the ratio decreases[2].

Through their action plans and investment programs, the public enterprise, its founder, and the regional municipalities have made insufficient progress in wastewater collection and treatment, and in protecting Lake Ohrid.

The 2024 financial indicators, in relation to total liabilities of 493.108.000 denars (8.018.016), indicate an increased risk of reduced liquidity for the enterprise. The accounts payable period to suppliers is 1.139 days, or over three years, while the average collection period for receivables is 333 days, or approximately one year. Liquidity is further constrained by rent obligations on expropriated land hosting infrastructure and by the enterprise’s bank account, which has been blocked since 2020, immediately after its establishment. The enterprise operates with a minimum monthly cash balance of 10.800.000 denars, in accordance with the decision of the Basic Court of Ohrid.

The audit highlights the need to develop a financial stability plan, which should include a realistic assessment of liquidity risks, a timeline for unblocking the bank account and settling obligations, measures to reduce reliance on short-term borrowings, prioritized collection of receivables, and cost optimization, to ensure the enterprise’s long-term stability and operational sustainability.

Recommendations have been made to address the identified issues, urging the relevant institutions and responsible officials to take the necessary actions.

Press Contact:

Albiona Mustafa Muhaxhiri +389 72228 203 [email protected]
Mijalche Durgutov +389 70 358 486 [email protected] 
Martin Duvnjak   +389 75 268 517 [email protected]