|
Country |
Case study |
Estonia |
Tallinn |
Finland |
Tampere, Hämeenlinna |
France |
Grenoble |
Germany |
Berlin, Munich |
Hungary |
Budapest, Debrecen, Szeged |
Italy |
Arezzo, Bologna, Milan, Rome |
Lithuania |
Kaunas, Vilnius |
Netherlands |
Rotterdam |
Poland |
Gdansk, Lodz, Warsaw |
Romania |
Bucharest, Timisoara |
Spain |
Cordoba, Madrid, Palma de Mallorca, Gran Canaria |
Sweden |
Stockholm |
UK |
Cardiff, Edinburgh, Leeds |
City in Time (historical aspects of the
29 case studies) |
Case studies and national context reports
(downloadable below) are generally 500-1000 kb.
|
Around 93% of the population is connected to the public
water supply system in Estonian towns and bigger settlements.
The Public Water Supply and Sewerage Act enacted in February
1999 stipulates the rights and obligations of state, local
government, water supplier and consumer. Local councils have
to establish 12-year development plans for their public water
supply and sewerage system, and regulate prices. There are
31 public water supply companies belonging to the Association
of Water Works providing water services to more than 30 bigger
settlements. These enterprises are mostly undergoing a privatization
process from former municipal institutions and are operating
now in co-operation with local government.
Tallinn
Case Study
The City of Tallinn incorporated its water and sewerage
undertaking in May 1997. After the establishment of
Tallinna Vesi, the City Government made several proposals
regarding the partial sale of the shares of the company
to an international “strategic investor”
in 1997-1998. Both Tallinn Waterworks and Sewerage Municipal
Enterprise and Tallinna Vesi were involved in development
cooperation activities, for instance, with Swedish and
Finnish water undertakings and enterprises, and the
European Bank for Reconstruction and Development (EBRD)
has given loans for investments since 1994. Finally,
the City Council narrowly voted on 15 June 2000 to sell
50.4 percent of Tallinna Vesi's share capital by international
tender. The privatisation contract between the City
and International Water UU was signed on 24th January
2001.
|
|
top
|
In international comparison Finnish water undertakings
are small. Municipal water undertakings supply over 90 per
cent of the total amount of water. About 90 per cent of the
population is covered by (public) water distribution systems,
and nearly 80 per cent is covered by sewerage systems. Yet,
competitive outsourcing of services – especially non-core
services – of public water undertakings in Finland is
very extensive. Outsourced services can form as much as 60-80
percent of turnover in many public undertakings, including
nearly 100 percent of capital investment.
Hameenlinna
Case Study
The first water works for the Town of Hämeenlinna
were constructed in the early 1900s. Supramunicipal
cooperation with the neighbouring municipalities has
been developed since the late 1990s. Intermunicipal
cooperation had first begun in the 1960s, when a neighbouring
municipality decided to collaborate with Hämeenlinna
Town in wastewater treatment. As a final phase, a supramunicipal
water and wastewater services joint-stock company owned
by Hämeenlinna Town and five neighbouring municipalities,
Hämeenlinna Region Water Ltd., was established
in 2001. The company nowadays provides water services
to 4 municipalities in the Hämeenlinna Region,
and wastewater services to 6.
Tampere
Case Study
Tampere Water is responsible for the water services
of Tampere, Finland's second-largest city. Cooperation
between municipalities in the Tampere and Valkeakoski
Region in water abstraction dates back to the 1960s.
A general plan to develop this further, including construction
of an artificial groundwater recharge plant, was finalized
in 1993. A bulk water supply joint-stock company, Tavase
Oy, was established by a number of municipalities including
Tampere in late 2002. The environmental impact assessment
(EIA) process was carried out in 2001-2003, and the
required corresponding water and environmental permits
were submitted in 2003. |
|
top
top
|
In Germany, the vast majority of drinking water comes
from groundwater, followed by surface water and bank filtrate.
Water quality is generally good. Consumption has dropped after
water fees were introduced in the former GDR following reunification
in 1990, but also due to an increasing water awareness and
the introduction of water-saving technology throughout the
country. Water supply has historically been one of the prime
responsibilities of municipalities and municipal companies.
Recently, however, a number of cities have granted concessions
to private operators or sold part of the company to private
investors in order to balance their strained budgets. For
legal reasons, wastewater management remains the responsibility
of the munipalities but there are mergers of water and wastewater
services.
Berlin
Case Study
Following preparatory steps in 1996, the formal political
decision for the partial privatization of the Berlin
water and wastewater services (BWB) was taken in 1998.
In 1999, a consortium of RWE, Vivendi (later Véolia)
and the insurance company Allianz acquired 49.9 per
cent of the newly created Berlinwasser Holding (BWH),
with full managerial control over BWB and its international
water and non-water activities. After certain aspects of
the partial privatization legislation were ruled
unlawful, notably the calculation basis for return on
investment, it was amended in 2003 and a new tariff
system introduced to allow consistent price rises.
Munich
Case Study
In 1999, Stadtwerke München (SWM Utilities, one
hundred per cent publicly owned and supplying gas, water,
and electricity) attempted to take over the independent
Munich wastewater operations (MSE). The municipal finance
department and the MSE’s financial director proposed
cross-border leasing (CBL) for Munich’s wastewater
treatment plants in 1998 and again in 2000. The public service
trade union, local politicians, and MSE’s staff managed
to bring forward convincing arguments against these
proposals, supported by the press. In all cases, the
mayor eventually stopped the plans, and status quo was
preserved. |
|
top
top
|
The Italian water sector has undergone a number of reforms
in recent years, first with the 1994 Galli Law, requiring
the restructuring of water supply and sanitation operations
in broader concession areas, generally under a unique operator
subject to regulation. The Galli Law did not require the introduction
of private sector participation (PSP). Subsequently, a number
of laws have addressed the organisational form of water service
providers, limiting the scope for public operations. In particular,
the 2002 budget law de facto imposed resort to PSP but considerable
amendments have been introduced in order to avoid breach of
EU Law. Legislative developments have facilitated a growth
in PSP in the Italian water sector, although publicly-owned
water operators remain the large majority.
Arezzo
Case Study
In 1999, water supply and sanitation operations in
the Arezzo area were semi-privatised as a 25-year concession
was awarded to a public-private joint venture managed
by a Suez-led consortium. This is the longest-standing
implementation of water sector reform under the Galli
Law and has proven considerably controversial. Issues
addressed in the case study include restricted competition,
poor performance in achieving the intended objectives
of the reform, high level of conflict between local
authorities and the private operator, dynamics of water
pricing and investments under PSP, and concerns of regulatory
capture.
Bologna
Case Study
Water supply and sanitation operations have been the
object of a number of restructuring exercises under
public ownership and management since 1984, both in
terms of the operator’s organisational form and
extension of the service area beyond the municipal territory.
In 2002, the multi-utility providing water and other
public services in Bologna merged with a number of neighbouring
multi-utilities and was listed on the stock exchange.
The infrastructure of the public-private multi-utility
was not subject to flotation, with the exception of
the infrastructure in the Bologna area. Issues addressed
in the case study include the implications of PSP and
in-house restructuring in terms of sustainability, and
the dynamics of pricing and investment under PSP.
Milan
Case Study
Wastewater sector reform in the city of Milan has been
introduced through the award of three BOT-style contracts,
which have proved in many respects highly controversial.
Protracted delays have led to a condemnation on grounds
of breach of EU law, with other issues including allegations
of excessive costs, corruption and anti-competitive
practices by a network of private operators. Following
the adoption of the Galli Law, the restructuring of
water supply and sewerage operations has been considered
a number of times, until the award of a short term concession
to a wholly municipally-owned PLC in 2003. Issues addressed
in relation to the second set of events include the
impact of municipal governments’ fiscal considerations
on sustainability, and the potential of public water
operations.
Rome
Case Study
The restructuring of the multi-utility providing water
supply and sanitation services to the city of Rome was
prompted in 1992 by investigations into corruption and
the ensuing political and organisational crisis. The
multi-utility was semi-privatised in 1998 through listing
on the stock exchange, and has become a relatively small
water multinational. It is now minority-owned by major
water multinational Suez, with which it has established
an operational alliance within Italy. It remains to
be seen how the pursuit of commercial considerations
may be reconciled with sustainability objectives under
the operations of a 96%-owned subsidiary of the public-private
multi-utility. |
|
top
|
After Lithuania regained her independence in 1990, responsibility
for public water supply and sewerage transferred from the
state to municipalities. Municipal water companies were established
by reorganising the regional state water companies of the
Soviet period. Lithuania depends entirely on groundwater for
drinking water supply. One typical feature of water use has
been its continuous decrease since the early 1990s. The major
reason has been the dramatic change in industrial production
since independence. Many industries have collapsed, and the
remaining ones are struggling producing only a fraction of
what they used to with only a fraction of their earlier work
force. Another reason for the decline in water use has been
that nowadays almost all households have individual water
meters, and people pay according to actual use.
Kaunas
Case Study
During Lithuania’s struggle for the independence
in the late 1980s environmental questions were high
in the agenda. At that time there was no wastewater
treatment plant in Lithuania’s second largest
city, Kaunas. There had been already earlier some attempts
to get a wastewater treatment plant built, but since
independence the municipality intensified the efforts.
This case study report concentrates on two questions
related to Kaunas wastewater treatment: a) decision
on the location of the treatment plant, and b) funding
of the first phase of the treatment plant.
Vilnius
Case Study
After Lithuania regained her independence, and the
responsibility for water services was transferred to
the municipalities, the capital and largest Lithuanian
city, Vilnius, with a population of more than half a
million people, became an attractive target for multinational
water companies. From 1992 onwards the French company
Lyonnaise des Eaux-Dumez SA tried to get involved in
Vilnius’ water services over several years. Various
forms of private sector involvement were suggested.
Finally in May 1998, Vilnius city council decided to
keep its water and sanitation service under municipal
control, instead of privatising it. |
|
top
|
In the Netherlands water supply is provided by municipally-owned
PLCs (17 in 2003), whilst water treatment is carried out by
water boards (27 in 2003), and sewerage networks in urban
areas are owned and operated by municipalities. Water boards
and water companies have undergone a long series of mergers
over recent decades, sharply reducing their number, driven
by efficiency concerns of national and regional government.
A recent water law, approved by the Dutch parliament in 2004,
requires household drinking water to be supplied by publicly-owned
companies. In 2002 the first PPP in the Dutch water sector,
for wastewater treatment, was signed with the waterboard of
Delfland.
Rotterdam
Case Study
The Rotterdam water company (Waterbedrijf Europoort
in 2003, now Evides) was the result of a merger of 10
municipal water companies in the early 1990s, a merger
driven by regional government concerns over efficiency,
and opposed by most of the companies and municipalities
involved. In 2004 the company merged with a neighbouring
water company, Delta Water, which was demerged from
multi-utility Delta. Like almost all Dutch water companies,
Evides' shares are held by municipalities and provinces.
Evides is the leading Dutch water company in the industrial
water sector, and has a 40% share in the Delfland wastewater
PPP. |
|
top
|
In Poland water and wastewater supply and wastewater treatment
is provided largely by municipally-owned commercial-law companies,
after state-owned enterprises were re-municipalised in the
early 1990s. A few cities have privatised services; a new
PPP law under discussion may increase the number by clarifying
the legal framework. Investment funds are available on good
terms from state environmental funds (funded by environmental
fees) as well as EU funds and cities' own funds. The law stipulates
that prices are set every year by municipalities. As in other
eastern European countries, declining industry and the introduction
of household metering have led to falling water consumption
since 1990; and declining industry together with investment
in wastewater treatment have led to significant environmental
improvements, from a position of very high pollution levels
in 1990.
Gdansk
Case Study
Water and sewerage operations in Gdansk were privatised
to French multinational SAUR in 1993, via a lease contract
with a SAUR joint venture with the city (Saur Neptun
Gdansk). Drinking water standards improved rapidly,
and consumption fell 50% in ten years with the introduction
of water meters. The city financed the completion of
the long-delayed new wastewater treatment plant, which
has contributed to much-reduced water pollution on Gdansk's
beaches and beyond. In 2004 the city-owned assets are
to be transferred to a municipal Asset Holding Company.
Lodz
Case Study
Lodz saw a disputed privatisation attempt in 1993/4,
strongly opposed by the trade unions, which collaborated
to produce an alternative proposal. The privatisation
plan, involving Generale des Eaux with financing from
the EBRD, ended after elections in 1994 saw a change
of government. Investment finance to complete a long-delayed
wastewater treatment plant was gained from other sources,
notably local and national government. In 2001 the Lodz
water company was converted into a municipally-owned
commercial law company, leasing assets from the city.
The final stages of the treatment plant, now operated
by a separate municipal company, involve EU funding.
Falling industrial and household consumption has enabled
the reduction in use of surface water (maintaining use
of existing groundwater sources), with consequent improvement
in water quality.
Warsaw
Case Study
Warsaw's water suffered particularly badly from Poland's
environmental problems, with its main supply source,
the Vistula river, downstream from various cities and
industries, and wastewater treatment largely inadequate
or absent. (This has improved substantially since then.)
Only 5% of Warsaw's own wastewater was treated in 1990,
and along with investment in drinking water quality,
the completion of existing and construction of additional
wastewater treatment plants was a priority. One plant
was completed and another is due for completion in 2005,
but this still leaves a large proportion untreated.
Several attempts to bring private involvement failed,
and Warsaw's municipally-owned company is now planning
to expand the major plant by 2010, with EU and other
finance sources. |
|
top
|
The territory of Romania has all types of fresh water resources
(rivers, lakes, and groundwater). Romanian flowing waters
are radially distributed, most of them coming from springs
located in the Carpathians Mountains. Almost the only collector
is the Danube River, which crosses 1,075 km of the southern
part of the country and flows into the Black Sea through a
large delta almost entirely located in Romania. The spatial
distribution of the water resources under drought conditions
is particularly non-uniform. Coordination of sectorial interests
and lack of public participation are both limiting factors
in the development of a river-based management plan. Romania
is showered with pollutants that might come from Ukrainian
industrial runoff.
Bucharest
Case Study
Water supply in Bucharest is provided by the company
Apa Nova, controlled by the French group Veolia Water
and by the Municipal Council. It won this competence
in March 2000 after a public tender, organized by Bucharest
City Council and the Romanian Government with assistance
from the World Bank. Although great expectations rested
on the privatization of water supply services, the quality
of the service is still problematic. Consumers face
problems such as the high cost of the service, the poor
quality of the water supplied and the malfunctioning
of the sewage system.
Timisoara
Case Study
Timisoara is the most important city in the western
part of Romania. It is the capital of Timis County,
which borders Yugoslavia and Hungary. Water management
in Timisoara is provided by the public Autonomous Water
and Sewerage Company "Aquatim", the administrator
of an important segment of the public infrastructure.
Aquatim ensures the supply of drinkable water, industrial
water and sewerage for all the urban areas of the Timisoara
municipality.
The episode of this case describes the loan conditionality
to privatize the municipal water company and the way
in which the company managed to deal with this complex
situation. Rehabilitation of the water treatment plant
and of one third of the water distribution network is
needed in order to improve the quality of drinking water
in Timisoara. The city budget cannot provide the funding
necessary for the implementation of these works, which
is why the city council has tried to obtain external
funds in order to carry out infrastructure overhauls
whilst maintaining Aquatim's management in public hands.
|
|
top
|
Compared to other European countries, the
availability of Spanish water resources should not necessarily
be considered a problem based on annual water availability,
which is estimated at around 40,000 Hm3. However,
it is the irregular distribution of Spain's water resources,
in both space and time, which makes the difference. Spanish
hydraulic resources are also determined by the amount of regulation
works carried out throughout the twentieth century in order
to satisfy increasing demand, due to population growth and
rising agricultural, industrial and tourist needs. The existence
of such hydraulic infrastructures allows the use of five times
the water volumes that could be naturally used (without the
need for any regulatory action to be taken).
Cordoba
Case Study
Cordoba is the only city among the 29 case studies
whose municipal water undertaking company, EMACSA, has
a decision-making system in which we can find a representation
of all the social actors (trade unions), citizens (neighbours'
associations) and institutional (political parties enjoying
a parity status, independent of electoral results).
This model was pioneered in 1983 and has generated an
organizational culture based on proactive management
and on the efficiency of the implementation of strategic
plans. EMACSA certification under ISO 9001 and 14000,
together with the decision-making process described
in this case, have transformed this city into an outstanding
example in which participation, transparency and information
are factors that promote effectiveness, efficiency and
equity in water management.
Madrid
Case Study
The Madrid case does not only refer to the city of
Madrid: Madrid is both the capital of Spain and of the
Autonomous Community of Madrid (CAM). A public sector
company, Canal de Isabel II (CYII), depending on the
regional government, is responsible for managing every
process related to water resources management in the
region. Most of the municipalities and citizens in the
Madrid Autonomous Community are served by this company.
The city of Madrid is one of the European cities with
a longer tradition in wastewater treatment, dating back
to the construction of the first treatment plant of
La China in 1932, with capacity to treat the majority
of the wastewater collected at that time. The major
boost in this field was the development of the First
Sewerage Plan for the City of Madrid during the period
1978-1984, when the sewerage system infrastructure was
updated and a financial mechanism to support the construction,
maintenance and operation of the treatment plants established.
Mancomunidad
del Sureste de Gran Canaria Case Study
Insufficient water resources (groundwater overexploitation
and scarcity of water, the quality of which is very
poor) in this area is the basis for a story of disputes
and conflicts over water to be employed for agricultural
use or for human consumption, and of an initially fruitless
search for solutions after the introduction of democracy
in 1979. Finally in 1991 a supramunicipal body (Mancomunidad)
was created in an attempt to find, by means of cooperation,
a solution to the water problems in the area, its foremost
action points being to satisfy water demand through
desalination and tertiary reutilisation. As a result,
since the setting-up of the desalination plant in 1993,
social conflict with regard to water is a thing of the
past, at the same time as economic development and population
growth within the three municipalities that make up
the Mancomunidad has continued exponentially. This has
been made possible by a decision-making system based
on consensus, on an environmentally-friendly (agenda
21) strategic planning and on the utilisation of cutting-edge
technology (eolian parks, tertiary output, etc …).
Palma
de Mallorca Case Study
The main economic sector in Palma de Mallorca is the
tourist industry. The conflict between supplying the
tourist industry and the resident population at the
same time has led to critical situations in the past,
due to drought and overexploitation of groundwater,
in which it was necessary to import drinking water by
ship. The Palma de Mallorca case shows how these difficulties
have been managed and overcome, and public public partnership
and public private partnership types of businesses have
supported the economic development and the sustainability
of the island. Desalination plants and water reuse,
as well as cooperation between the companies, civil
society and the public administration, have proved in
a positive way the synergistic capacity of EMAYA, the
public municipal company, to instil some vigour into
the "new urban water culture". |
|
top
|
The Municipality Act of Sweden states that
the municipality/local government has the overall responsibility
for water supply and wastewater services. Municipal ownership
and operation are entrusted either to a municipal department
or a municipally owned limited company. Two thirds of utilities
cover their costs by fees, and smaller municipalities may
subsidise these services out of local tax funds. Altogether
99 percent of the capital and operating costs are covered
by tariffs. This means that the business of water supply and
wastewater management can be regarded as self-sustaining.
Stockholm
Case Study
Stockholm provides an example of a long-term environmental
strategy being pursued through an integrated public
sector undertaking, and has a distinctive record of
cooperation, including international cooperation. For
example there is extensive co-operation between Stockholm
and the neighbouring municipalities through a number
of formal associations but also less formal bilateral
collaboration. The case study also emphasizes the significance of ownership.
|
|
top
|
England and Wales has a unique system of water service
provision, being based on a relatively few private monopolies
(23 in 2004) which own the water infrastructure, and structured
largely on river basin principles. (In Scotland and Northern
Ireland water services are provided by a state-owned company
and government agency respectively.) The system, created by
stock-market flotation of ten former government agencies in
1989, is regulated by three major regulatory agencies (economic,
environmental and drinking water quality). The economic regulator
sets individual companies' price caps and investment programmes
every five years, based partly on comparing companies against
each other ("yardstick competition") as well as
their past history. EU requirements have driven increasing
environmental investment and outcomes in the last 15 years.
Cardiff
Case Study
Like all the ten water companies privatised in 1989,
Welsh Water sought to use its considerable cash flow
to diversify into other sectors and other countries
to guarantee long-term shareholder returns. In 1996
it took over the local electricity company, Swalec,
renaming itself Hyder, and by 1998 it was Wales' largest
independent private employer, and had quadrupled its
turnover since 1990. A double blow from the windfall
tax introduced by the new Labour government and a regulatory
price review which enforced price cuts alongside investment
made Hyder's share price plummet, and in 2000 it faced
a takeover battle. This was eventually won by a company
intending to break up Hyder and keep only the electricity
distribution; which it did, selling the water division
to a non-profit company (Glas Cymru) expressly set up
for the purpose. Glas outsources 85% of its operations
to other water companies, keeping just a management
and finance core.
Edinburgh
Case Study
Leeds
Case Study
Like the other water companies privatised in 1989,
Yorkshire Water sought to diversify into other sectors
and countries, before more recently refocussing again
on water. The 1999 regulatory price review, which enforced
price cuts alongside investment, prompted Yorkshire
to look for ways to reduce its cost of capital. In 2000
it proposed selling its assets to a mutual society owned
by its customers, with Yorkshire becoming a pure services
company. The plan offered good returns to shareholders
but met fierce condemnation from customers and the regulator,
and was later dropped. Instead the company sold its
energy and waste interests to refocus on water, reverting
to a "boring" water utility as an alternative
way of cutting its cost of capital. |
|
|
The case studies were chosen on the basis of the:
- diversity of experience of the cities, including diversity within
one country, and therefore the potential for improving understanding,
developing good practice and disseminating relevant lessons;
- relevance of experience for today’s policy makers;
- feasibility of the case studies in terms of the team members' existing
level of knowledge and contacts;
- geographical representation - north and south EU, as well as candidate
countries thus representing the full range of water requirements and
challenges experienced in Europe;
- language capability of the team to work in the cities;
- partnership expertise and knowledge of the cities and countries.
Demonstration
cities |
Country |
City |
Austria |
Vienna |
Greece |
Athens |
Russia |
St Petersburg |
|
|