Veolia Water RomaniaA 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

Veolia Water Romania Water Supply in the city of

Bucharest

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Veolia Water Romania

Where we are ?

Where we are?

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Short presentation

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….)

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A little history

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

«4


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


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…


ABOVE ALL THERE WAS :

A WILL

A NECESSITY

A SOLUTION


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


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


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


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


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


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


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


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)


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LOSSES IN THE NETWORK (in Millions m3)

ANB LOSSES IN THE NETWORK (inMillions m3)


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ANB TOTAL ENERGY CONSUMPTION (in MWh/y)

ANB TOTAL ENERGYCONSUMPTION (in MWh/y)


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2002 2004 2006 2007 2008 2009 2010 2011

ANB CUSTOMER SATISFACTION (in %)

ANB CUSTOMER SATISFACTION(in %)


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 ?


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


« 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

http://www1.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/home


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


MULTUMESC

THANK YOU

Documents

Veolia Water RomaniaA 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