2005 - 2006 - Pinsent Masons Water Yearbook 2012

FRANCE PART 3 (i): COMPANY ANALYSIS: MAJOR PLAYERS
These sales involved a total write-down of US$4.5 million between 2000 and 2004. VE’s water
revenues in the USA will be US$700 million per annum, post these divestments.
International alliances and JVs
United Water: The JV between VE and Thames Water. This alliance is for all bids by the two
companies in Australasia. Its first success was the Adelaide, South Australia contract in 1995.
OMSA: A JV in Mexico with ICA, serving 7.8 million people in the country.
Proactiva: Proactiva Medio Ambiente is a 50:50 JV between VE and FCC, for all water and waste
management contracts in Latin America. It is still being used post the FCC stake sale.
RWE/Berliner Wasser Betriebe: A joint bid gained the Budapest sewerage concession in 1997.
Since 2000, it has been used on a number of occasions.
China: VE has a number of local partners in China. Major contracts have recently been gained with
Citic Pacific and Beijing Capital Group.
France
Générale des Eaux started operating in France in 1853. By 1953, the company provided water to 8
million people and by 1980, it supplied water to 19.8 million people and sewerage to 6.9 million.
Currently, the figure is 26 million water customers and 17 million sewerage customers, 16 million of
whom have their sewage effluents treated. VE has retained the Générale des Eaux name for its
operations in France, which currently has 4,000 contracts with 8,000 municipalities in France. The
sewerage market is seen as growing at an appreciably faster rate than the water market, because of
the low penetration of sewerage networks and sewage treatment in France at a time when the country
must comply with the EU’s Urban Waste Water Treatment Directive’s obligations between 2000 and
2005.
In France, the company has to concentrate on consolidating its water contracts in an unprecedented
competitive and critical atmosphere. As part of the company’s responses to these challenges,
customer service charters for 10 million people were issued by the end of 1996, with all customers in
France being covered by 1999. A €115 million cost cutting programme from 1996-2000 was 70%
achieved by the end of 1999. At the start of 1997, Générale des Eaux was awarded two 12 year water
treatment contracts for the management of two wastewater treatment works in Tougas and Petite
Californie, serving 21 urban communes centred in Nantes. Générale des Eaux is replacing Suez for
these contracts, a notable event in a country which has previously been characterised by consensual
competition.
Générale des Eaux: 2000 2001 2002 2003 2004
Contract renewal rate 90% 77% 92% 80% >90%
New contracts gained in each year have at least cancelled out contract losses in each of these years.
For example, 53 contracts were lost in 2003, but 35 new contracts were gained. The average
weighted time before the expiration of long term contracts is 12 years. Total revenues for the 211
contracts regained and 35 new contracts in 2003, are approximately €90 million per annum. 39
contracts were lost in 2004, equivalent to 0.15% of annual revenues in France, while renewals
generated revenues of €730 million per annum. Major contract renewals in 2004 included: Rennes
(water provision, €150 million for 10 years), Chartres (water and sewerage, €85 million for 10 years)
and SIAEP Tremblaye Claye Souilly (management oif water services, €47 million for 12 years).
Denmark
One contract for water provision to 60,000 people via VE’s I Krüger AS. Krüger specialises in the
manufacture of advanced sewage treatment systems and engineering consultancy.
The Netherlands
2002 Delftland 30 year DBFO 1,700,000 sewage treatment
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Pinsent Masons Water Yearbook 2005 – 2006