Veolia Water Romania Water Supply in the city of Bucharest
Short presentation
APA NOVA BUCHAREST In charge of the operation of the water and waster
water public services for the city of Bucharest APA NOVA PLOIESTI In charge of the operation of the water and waster
water public services for the city of Ploiesti
VEOLIA APA SERVICII In charge of the development in Romania
(Municipal) Operation of water and wastewater public services
in the cities around Bucharest Operation on water and wastewater industrial
services (international Airport….) Development of services for cities and private
persons (cleaning network, cleaning tanks, after meters….)
A little history
1997 Creating of C.E.S.E.R. (Compagnie d’Exploitation des Services
d’Eau en Roumanie)
2006 C.E.S.E.R. became V.A.S. (Veolia Apa Servicii)
1999 International tender organized by World Bank for the delegation of
the water and waste water public services of the city of Bucharest International consultation by the Municipality of Ploiesti for the
delegation of the water and waste water public services
2000 In March Compagnie Générale des Eaux (now VEOLIA) won the
tender in Ploiesti - Beginning of the concession contract In November Compagnie Générale des Eaux won the tender in
Bucharest – Beginning of the concession contract
Focus on the concession contract of BUCHAREST
APA NOVA BUCHAREST Company full dedicated for the operation of the water and waste water public services of the city of BUCHAREST
Location : South-East of Romania Population : 2,5 Millions habitants S.A.: Shareholders 73% VEOLIA WATER – 17% City of BUCHAREST –
10% employees of ANB
Focus on the concession contract of BUCHAREST
BUT WHY CHOOSE TO ENTRUST TO A PRIVATE COMPANY THE OPERATION OF A SO
STRATEGIC PUBLIC SERVICE ?
FOR OUR EXPERIENCE ?
OUR REPUTATION ?
OUR EFFICIENCY ?
YES BUT…
Focus on the concession contract of BUCHAREST
IMPORTANT DIFFICULTIES TRIGGERS THE PROCESS OF PUBLIC SERVICES DELEGATION
Water Municipal Company in a very bad financial situation does not allow to provide the service
Many technical problems disrupt the continuity and the quality of the service
Problems of water quality
Focus on the concession contract of BUCHAREST
WE ARE FLEXIBLE
ADAPTATION OF CONTRACT PROPOSED
BUCHAREST PERFORMANCE CONTRACT WITH THE OBLIGATION TO REACH AND
MAINTAIN 24 LEVELS OF SERVICE WITH A SYSTEM OF BONUS/MALUSDE (ANGLO-SAXON MODEL)
THE MUNICIPALITY REMAINS THE OWNER OF THE INFRASTRUCTURE AND IS SHAREHOLDER OF THE COMPANIES
Focus on the concession contract of BUCHAREST
WHAT INITIAL OBSERVATIONS ?
Inadequate organization/ Overstaffing
Discontinuity in the services provided
Billing not based on the meter readings
Average consumption > 400 l/d/capita
Lake of security in the drinking water supply
Efficiency of the network < 50%
Lake of protection of the workers
Old technical works
Lake of customer orientation
Lake of tools and work equipment
Lake of knowledge of the networks
Focus on the concession contract of BUCHAREST
WHAT HAVE WE MADE TO IMPROVE THAT ?
The expertise of Veolia • Methodology – Good practices
A deep reorganization of the municipal company became private company • Services restructuring – creating new jobs
Staffing resources required to perform operational tasks • Nearly 41 M€ of investments in equipment – tools - vehicles
The introduction of flexibility in our daily works • Less« specialists » - flexibility in our operations
Significant investments in the infrastructures • Nearly 244 M€ of investments in water treatment plants and networks
Significant investments in professional training programs (internal or external) • 4 M€ invested in training programs in all the subjects
A significant social progress for the employees of our companies • Social fund = 9% of Wage Bill – employees shareholders of the
company– medical protection
Focus on the concession contract of BUCHAREST
THE STAKEHOLDERS OF THE CONTRACT
BUCHAREST
Municipality of Bucharest - Owner of the infrastructure - Monitors the performance of the contract and the investments
APA NOVA BUCHAREST - Insures the operation and maintenance of infrastructures serving customers - Manages the infrastructures of the service, enhances, restores and maintain the operating assets
Focus on the concession contract of BUCHAREST
THE STAKEHOLDERS OF THE CONTRACTS
BUCHAREST
TECHNICAL REGULATOR (AMRSP – Municipal institution) - Monitoring and certification to obtain the levels of service - Assists ANB in its relations with the third parts
ECONOMIC REGULATOR (ANRSC – State institution) - Verification of the correct application of the tariff adjustment mechanisms in accordance with the concession contract
THE EXPERTS PANEL (independent) 3 independent international experts (neither Romanian nor French), each with specific competences (a water engineer, an economist, a financial analyst) Examines and approves for extraordinary tariff adjustments by ANB
Focus on the concession contract of BUCHAREST
Municipal authority for the regulation of public utilities Bucharest – AMRSP Established by the Municipality as independent body Financed by a regulatory levy included in the water and sewerage tariff,
collected and transferred by ANB to AMRSP Responsible for monitoring the overall development of the concession on
behalf of Municipality Responsible for the assessment and certification of the achievement of the
LoS Responsible for proposing penalties in case of ANB default in achieving the
LoS Status of LoS certification: all due LoS have been certified as achieved
TECHNICAL REGULATOR
Focus on the concession contracts of PLOIESTI and BUCHAREST
National Authority for regulation of public utilities – ANRSC Established by the Romanian Government Financed by all operators based on a regulatory levy Responsible for the evaluation and approval of all tariff adjustments Responsible for the evaluation of the requests and evidences for
issuing the license of operation for all operators Status of tariff adjustment requests: all adjustments have been
approved Status of licensing process: licenses issued
ECONOMIC REGULATOR
Focus on the concession contracts of PLOIESTI and BUCHAREST
Experts Panel consisting of 3 independent individual experts (neither Romanian nor French), each with his own particular expertise field: hydro-technical engineer regulatory economist financial analyst
Responsible for the evaluation and conclusion regarding the fairness and accuracy of the extraordinary tariff adjustments
Responsible for mediation on disputes between parties on contractual issues. Examples
of issues submitted for mediation: methods and details on LoS assessment (A4, A5, A7, A8, B2, C1) responsibilities for environmental restoration risks penalty claims
Status regarding the agreement on the extraordinary tariff adjustments: all implemented as recommended
Status of mediation reports: conclusions and recommendations accepted by the parties
INTERNATIONAL REGULATOR
Focus on the concession contract of BUCHAREST
AFTER 12 YEARS WHAT IS THE RESULT ?
Continuity of the service 24h / 24h
Water complying with European standards
Billing based on meter readings
Average consumption 180 l/d/capita
Productive and modern working methods
Security and autonomy in the water supply
Improvement of the efficiency of the network (decrease of losses with 180 Mm3)
Security on the perimeter of the works
Improvement of the working conditions and social progress
Certifications ISO 9001-2000 / ISO 14001-2004 / OHSAS 18001-1999 (AFAQ)
Focus on the concession contract of BUCHAREST
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LOSSES IN THE NETWORK (in Millions m3)
ANB LOSSES IN THE NETWORK (inMillions m3)
Focus on the concession contract of BUCHAREST
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ANB TOTAL ENERGY CONSUMPTION (in MWh/y)
ANB TOTAL ENERGYCONSUMPTION (in MWh/y)
Focus on the concession contract of BUCHAREST
30
40
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2002 2004 2006 2007 2008 2009 2010 2011
ANB CUSTOMER SATISFACTION (in %)
ANB CUSTOMER SATISFACTION(in %)
Focus on the concession contract of BUCHAREST
CONCLUSION AFTER 12 YEARS
VEOLIA PROVIDES IN BUCHAREST A VERY EFFICIENT WATER AND WASTE WATER
SERVICE IN ROMANIA
But is it enough to say that ?
Not exactly !
Because what about the cost of the service ?
Focus on the concession contract of BUCHAREST
BUCHAREST : 5,85 RON with VAT / m3
whether 1,34 € / m3
or 0,585 bani / l
or 0,134 cent / l
BOTTLE OF WATER : 2 RON / l or 200 bani / l
Focus on the concession contract of BUCHAREST
« By 2008, efficiency gain had produced cost savings totalling US$ 349 Millions. The Concessionaire has financed US$ 259 Millions in investment, without public subsidy, while keeping tariffs well below the Romanian average. Not all water concessions have been as successful. »
Communication of International Finance Corporation part of World Bank Group February 2011 about the concession contract of Bucharest
Focus on the concession contract of BUCHAREST
SECOND CONCLUSION AFTER 12 YEARS
VEOLIA PROVIDES IN BUCHAREST A VERY EFFICIENT WATER AND WASTE WATER
SERVICE IN ROMANIA
With an affordable price for the population