2008 - 2009 - Pinsent Masons Water Yearbook 2012 - 2013

PART 1: THE WORLD OF WATER 2008-2009
In reality, full reporting of service extension data has not taken place. It is likely that the real
figure is between 25.0 and 27.5million people via a smaller number of connections. In addition,
population growth within a contract’s operating area means new connections being made and
more people served per connection, but these will not usually be classified as service extension.
Service extension also excludes people being provided water by bulk water provision and water
treatment contracts, where the company is mobilizing new water resources but is not
responsible for distributing water to the customers.
Suez has provided additional access to water for nearly 8million people in developing countries
and a further 1.8million via standpipes in South Africa by 2005 and 9.2million home
connections and 1.8million standpipe connections by 2007 (Suez, 2007 & Aquafed, 2007).
While Veolia supplies water to 9million people in developing economies in Africa and Asia
excluding China, including 3.5million people who have benefited from new household and
standpipe connections 1 (Veolia, 2007).
International companies have played a significant role both in the global impact of water PSP in
developing economies and in assisting to deliver service extension. But in the context of the
needs of the Water & Sanitation Millennium Development Goals, let alone the World Water
Vision, it can be argued that they need to be encouraged to make a greater contribution. These
are some personal observations of the author.
Some water PSP case studies in service extension
Casablanca – block tariffs and service extension
In 1997, Lyonnaise des Eaux de Casablanca (LYDEC) lead by Suez (France) was awarded the
30 year Urban Community of Casablanca (UCC) concession contract. During 1998-06,
LYDEC’s water and sewerage activities accounted for 30-35% of LYDEC’s turnover and 60-
70% of investment, reflecting the need to upgrade and extend the city’s water and sewerage
services. By 2004, leaks generating 25million m 3 pa of water losses had been repaired,
equivalent to the water needs of 800,000 people.
Service development 1997 2002 2005
Water connections 440,000 590,000 710,000
Unaccounted for water 38.9% 27.7% 22.2%
Application of cross subsidies is via block tariffs. Block tariffs are based on consumption per
month, with the first 8m 3 costing 2.92 Mdh/m 3 (USD0.39) and subsequent usage above this
figure rising in thee stages to 13.25Mdh/m 3 (USD1.79) for water above 40m 3 per month.
Most of the water (649million m 3 out of 814million m 3 in 1999) is bought from ONEP, the
National Drinking Water Administration, for 3.95Mdh/m 3 (USD0.53) meaning that water for
essential use is directly subsidised by LYDEC. As a result, 50% of customers pay less than
USD3 per month. At the start of 2007, 145,000 low income households without adequate
access to water and sanitation were identified. LYDEC plans to connect them by 2010 at a total
cost of USD137million.
14% of LYDEC’s equity was sold on the Casablanca Bourse on 18 th July 2005, 80% of the
shares being bought by local investors. Suez continues to hold 51% of LYDEC, with the
remaining 35% being held by Moroccan institutions.
Sources: Djerrari, F (2003) Best practice in urban water resource management: Contribution of
LYDEC in Casablanca, World Bank Water Week, Washington DC, USA, 4-6 th March 2003
De Cazalet, B (2004) The role of Private Sector Participation in developing the water sector in
the Mediterranean Region: The example of Casablanca, FEMIP Expert Committee, Amsterdam
25-26 October 2004.
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Pinsent Masons Water Yearbook 2008-2009