1 / 22

The French Water Services: Main present challenges

The French Water Services: Main present challenges. Table of contents: main present challenges. Introduction : Veolia Environment and Veolia Water. Part I : Based on principles of the Delegation of Public Services (DSP) and on hydrographic division of the French territory…

dinos
Download Presentation

The French Water Services: Main present challenges

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. The French Water Services: Main present challenges

  2. Table of contents: main present challenges Introduction: Veolia Environment and Veolia Water. Part I: Based on principles of the Delegation of Public Services (DSP) and on hydrographic division of the French territory… Part II: … the French Water services face 2 main water challenges: • 1rst challenge: to cope with huge investment requirements during the next 10 years imposed, for a large part, by new environmental regulations but also by maintenance obligations, … • 2nd challenge: …without being obliged to increase too dramatically the tariff levels. Part III:China, an application in relation with the local constraints.

  3. Introduction ( 1 ) Veolia Environment • Veolia Environnement, the n°1 provider of environmental services to municipal and industrial clients in the world (Power, Facilitiesmanagement) (PublicTransport) (Solid Waste) (Water) N° 1 in the world N° 1 in Europe for energy services N° 2 in the world Private operator N° 1 in Europe Veolia Environment is the only company to operate in all environmental services: water, waste management, energy services and passenger transportation

  4. Introduction ( 1 ) Veolia Environment Veolia Environment Main Figures Placed 128th among Global 500 companies in 2004 Operator in over 75 countries on the 5 continents Revenue of € 24.7 Billion (€ 22.3 Billion excluding third party revenue) 270,000 employees Connex : 9% Veolia Water 40% Dalkia : 27% Onyx 24%

  5. Introduction ( 2 ) Veolia Water Veolia Water Main Figures More than 110 Million people served Operator in over 55 countries Revenue of € 9.8 Billion (€ 7.6 Billion excluding third party revenue) 67,800 employees Technical solutions and construction: 19 % Industrial: 4 % Municipal: 77 %

  6. Part I The principles of Public Service Delegation and of the decentralised hydrographic regional organisation

  7. A – The Delegation of Public Services (1): 3 mains principles • Equality of access • Continuity, mutability and sustainability of Public Services • Transparency of relations between the actors

  8. A – The Delegation of Public Services (1): the contract Municipality Water assets Municipal budget Subsidies Long term borrowing Private operators Consumers:tariff x volume Scope of the agreement: • Global or partial management Responsibilities: • Technical • Financial • Services Responsibilities: • Institutional responsibilities • Tariff to end users • Ownership of assets Lease payment “DSP” Contract Revenues Sources of financing:

  9. A – The Delegation of Public Services (1):VEOLIA Environnement extensive lease contract experience • In France: 90% of the PPPs are “lease contracts” WATER WASTE WATER 18% 14% 7% 1% Veolia Water 38% Ondeo (Suez) 21% Saur 10% Other private 1% (26 million customers) (17 million customers) PRIVATE SECTOR 70% 40% PUBLIC SECTOR Local Authorities 30% 60% • VEOLIA Water manages around 4 000 contracts with more than 8 000 Municipalities. • In 2004, VEOLIA Water contract renewal rate was 86%.

  10. B – An investment decision process based on 6 decentralised hydrographic agencies

  11. B – An organisation based on 6 natural hydrographic regions (“Agences de l’Eau”) • The 1964 Law has divided France into 6 hydrographic administrative Regions, based on the 6 main rivers (Seine, Loire, Rhône, Garonne, Rhine and the Northern area) • Each of this Region is managed by a Committee with representatives from: • The different municipalities • The end users • Different public organisations designated by the State • The hydrographic Regions responsibilities are threefold: • Design the investments program according to the needs defined by the municipalities, end users, and various professionals (among which private operators) • Define the amount of taxes which should be paid by the end users (through the tariff) in order to finance (or to contribute to finance) the part of the investments program • Control the execution of the program

  12. Part II 1rst challenge: the investment requirements and its global financing structure

  13. A – Structures of the investments requirements (1) • Ex Year 2000: Global water financial needs Euro 17.8 billions Out of which: Operational costs needs: Euro 11.7 billions Investments financing: Euro 6.1 billions Out of which  Drinking water: Euro 2.7 billions (Network: 1.8 billion – Treatment: 0.9 billion)  Sanitation: Euro 3.4 billions (Network: 2.4 billion – Treatment: 1 billion) Source: National Audit Court December 2003

  14. A – Structures of the investments requirements (2) • Financial needs for the next 10 years • New mandatory investments imposed by environmental regulations over 10 years - Drinking water: Euro 12.1 billions Out of which  Treatment: Euro 4.5 billions  Network: Euro 7.6 billions - Sanitation: Euro 9.15 billions (Mainly networks – Cities over 2,000 inhabitants) • Regular maintenance investments: total Euro 3 billion a year (on average) - Drinking water: Euro 1.5 billion a year (mainly network) - Sanitation: Euro 1.5 billion a year (mainly network) • Operational costs: between Euro 10 and 12 billions a year Source: National Audit Court December 2003

  15. B – Structures of the financing sources GLOBAL NEEDS (Ex: year 2000) THE MAIN SOURCES 80 % END USERS: (Tariff x Volume) • Operational needs: Euro 11.7 bilions • Investments: Euro 6.1 billions Total: Euro 17.8 billions SUBSIDIES FROM PUBLIC AUTHORITIES: 5 % • Department: 3 % • Region: 1 % • Municipal budget: 1 % SUBSIDIES OR SUBSIDISED LONG TERM LOANS: 15 % • Subsidies (Infrastructures funds): 2 % • Long term loans from Hydrographic Regions: 13 % Source: BIPE - December 2003 (one of the leading European providers of forward-looking economic analyses and consulting services)

  16. Part II 2nd challenge: how to cope with the investments and cost challenges without being obliged to increase dramatically the tariffs levels ?

  17. Water bill – What costs are covered ? How are they evaluated ? • What costs are covered by the tariff structure ?(Based on year 2000) • 42 % Treatment and distribution of drinking water • 31 % Sanitation costs • 17 % Hydrographical Agencies • 10 % VAT + Tax • Tariff structure • 2 principles: - 1 water tariff by municipality or group of municipalities - Full cost recovery • 2 methods: - Tariff directly linked with the volumes (with differences by levels of the volumes used) - Tariff calculated in 2 parts: a fixed part (17%)+ a proportional part linked to the volumes used (83%) Drinking water: 90 % of municipalities are using the 2nd tariff structure Wastewater: 38 % of municipalities are using the 2nd tariff structure

  18. Factors which impacts the tariff level of each municipalities ? DRINKING WATER SANITATION • Origin of the resources • Treatment process before distribution • Network length • Rate of network maintenance • Nature of the end users: • corporates, industrials, etc • impact of the tourist season • Treatment process • Network: unique or separate • Network length • Wastewater collection efficiency • % of wastewater collected

  19. Evolution of the water tariff, all factors being considered • From 1995 to 2004: • The global costs of the water services has increased by 16 % • Compared to a price index which has only increased from 6 % during the same period • But yearly tariff increase has been decreasing: • 1990 – 1994: + 15% • 1994 – 1995: + 6.5% • 1995 – 2004: + 1.7% • Presently, the tariff levels allow to cope with the investments and operational cost requirements.

  20. Water Tariff in 5 French cities / areas

  21. Part III : China, an application in relation with the local constraints

  22. Thank you for your attention

More Related