1. 1 Jean-Pierre Rideau Deputy Director of the territorial planning and legislation water and raw materials Department for Water and Biodiversity Ministry of Ecology, Sustainable Development, Transport and Housing France WWW.developpement-durable.gouv.fr Ministère de l'Écologie, de l'Énergie, du Développement durable et de la Mer Water services in France : PPPs, Funding and Water Pricing

2. 2 2 public-private partnerships in France CONTENTS 1.Historical involvement of Public Private Partnerships 2.Public Private Partnership Contracts 3.Awarding delegation of public services 4.Building governance tools for public- private partnerships 5.Funding and water pricing

3. 3 3 Technical and financial risks first water company in Paris (1778 – 1788) Freedom of trading (1791) public-private partnerships in France Water supply To public fountains : being free To households : a commercial activity The municipalities Ensure water supply at public fountains Should entrust households water supply to private companies 1800 - 1850 1.Historical involvement of public – private partnerships

4. 4 4 public domain : inalienable goods Municipalities allowed licences for the use of the public domain to develop water infrastructures (=> B. O. O. T.) public-private partnerships in France The licence defined specifications, price, and duration of the concession 1830 - 1884 After the 1 st World War, a high monetary depreciation forced to change tariffs registered in concession contracts Rather than increasing water prices, municipalities take part in the development of water infrastructure (=> Contracts Operation & Maintenance) 1.Historical involvement of public – private partnerships

5. 5 5 Linking An insufficient improvement of water supply (capital investment depending on the private sector) And water-borne diseases Municipalities are allowed to create local services to improve public health public-private partnerships in France (1884 Act) Direct labour 1926 decrees enhance this trend of bringing services under control of local authorities 1.Historical involvement of public – private partnerships

6. 6 6 public-private partnerships in France CONTENTS 1.Historical involvement of Public Private Partnerships 2.Public Private Partnership Contracts 3.Awarding delegation of public services 4.Building governance tools for public- private partnerships 5.Funding and water pricing

7. 7 7 public-private partnerships in France 500,000 km 2 62,000,000 inhabitants 35,000 communes (municipalities) Tap water : 4 billion m 3 /y. Municipalities (or groupings) organise water and sanitation services Water supply : 4500 PPP 70 % of inhabitants Sanitation : 4000 PPP 55 % of inhabitants 2.Implementation of PPPs

8. 8 8 Water => local resources local authority governance operator results obligation drinking water standards environmental standards financial / technical risks public-private partnerships in France A contractual freedom of local authorities Governance by local authorities « a local regulation by contracts without national regulator » 2.Implementation of PPPs

9. 9 9 public-private partnerships in France Administrative courts auditing of procedures and accounts State environment and drinking water inspectorate (withdrawal and discharge permits) 2.Implementation of PPPs A contractual freedom of local authorities Governance by local authorities « a local regulation by contracts without national regulator »

10. 10 Concession contract Built, Own, Operate and Transfer (BOOT) The provider manages, finances and renews infrastructures On completion of the contract, all infrastructure are the municipality property Water pricing (Price paid by the end users) public-private partnerships in France Contract operations and maintenance (ConOps) The service provider manages, maintains infrastructures The municipality carries out new equipments and renewal Operations and maintenance + financing ConOps The service provider finances some specific infrastructure (renewal, plant treatment, …) Water and sewerage services in France : 8500 delegation contracts ConOps = 98 % 2.Implementation of PPPs Private Finance Initiative Contract BOOT Payment by the public partner

11. 11 public-private partnerships in France Act n° 93-122 Jan. 29th, 1993 : Awarding delegation of public services Act n°2001-1168 Dec. 11th, 2001 : delegation is « a contract trough which an institution of public law awards management of a public service, for which it is responsible, to a service provider, either public or private, the remuneration of which is substantially linked to the operating results of the service. » Payment by the end users Publics services concession (BOOT & ConOps) PFI (Private Finance Initiative) Act n° 2004-559 June 17 th, 2004 Payment by the public partner

12. 12 1990 – 2000 : new targets a distinct improvement in governance users information contracts monitoring financing renewal public-private partnerships in France 2.Implementation of PPPs

13. 13 public-private partnerships in France CONTENTS 1.Historical involvement of Public Private Partnerships 2.Public Private Partnership Contracts 3.Awarding delegation of public services 4.Building governance tools for public- private partnerships 5.Funding and water pricing

14. 14 public-private partnerships in France 1993 law in the prevention of corruption and transparency in economic life and public procedures 8 500 contracts 600 - 1000 come to an end each year 8 to 11% : change of service provider after competition 1% : delegation to municipal management 3% : municipal management to delegation Averaged duration contracts after competition : 12 years 3.Awarding delegation of public services 1995 law : max. 20 years for contracts banning « entrance fee » practice Advertisement and competitive bidding

15. 15 public-private partnerships in France Proposal for a directive on concessions (Amending directives 2004/17/EC and 2004/18/EC) Definition of a concession : a reference to transfering the operating risk to the concession holder The concession contract shall be limited on time Obligation to publish a concession notice Regulating minimum deadlines for the submission of bids Verification of the suitability of tenderers (transparent, non-discriminatory and proportionnal selection criteria should refer to technical, financial and economic capacity of operators ) Publics services delegation

16. 16 public-private partnerships in France CONTENTS 1.Historical involvement of Public Private Partnerships 2.Public Private Partnership Contracts 3.Awarding delegation of public services 4.Building governance tools for public- private partnerships 5.Funding and water pricing

17. 17 Water supply networks In 2008, the water supply network represents 1,000,000 km of pipelines (in 1950, only 8% existed) In 2008, 99% population is connected (completion of water supply network) Maintaining, updating and upgrading equipments Planning of renewal

18. 18 To Improve governance Networks renewal schedule (for operators in charge of renewal) Operator should update the networks maps (Water Act, Dec. 2006) public-private partnerships in France 4.Building governance tools for PPPs

19. 19 To Improve transparency The mayor is in charge of publishing an annual report on the price and performance of water and sanitation services The service provider submits an annual report on management of water and sanitation services including accounts and analysis of service quality 4.Building governance tools for PPPs public-private partnerships in France To share a common understanding To ensure a social consensus To maintain the funding capacity

20. 20 To Improve transparency Consultative committees for local public services (stakeholders appointed by the mayor) Consultation of the committee before any change in public or private management The committee should examine annual reports and express a view for the local council 4.Building governance tools for PPPs public-private partnerships in France To share a common understanding To ensure a social consensus To maintain the funding capacity

21. 21 public-private partnerships in France Local authority (municipality) Operator (public or private) Consumers stakeholders Administrative Courts : auditing of procedures and accounts State : control legally binding standards Performance Indicators (Decree - May 2007) => A sunshine regulation 4.Building governance tools for PPPs

22. 22 public-private partnerships in France CONTENTS 1.Historical involvement of Public Private Partnerships 2.Public Private Partnership Contracts 3.Awarding delegation of public services 4.Building governance tools for public- private partnerships 5.Funding and water pricing

23. 23 public-private partnerships in France 5.Funding and water pricing Accounting instructions Separate the water accounting from the general accounting of the municipality (1967-1969 decrees) Apply depreciation in accounting (1992 decrees) Water users pays for water use

24. 24 WS accounting (incomes) M (2004) PPP Municipal TOTAL Water Pricing (1) 5 4524 443 9 895 Subsidies for operating and maintenance (2) 377 Total incomes = (1) + (2) 5 4524 820 10 272 Maintenance costs (3) 4 7912 466 7 257 http://economie.oieau.fr/IMG/pdf/070921_EY_MEDAD_Recup_Couts_Rapport_final.pdf Data VAT and water agencies fees Savings for investments and loan repayments = (1) + (2) – (3) 3 015

25. 25 Million Water agencies 1 450 Regions Municipalities Users (households and users likened as, industry, stock breeders,…) Investments : 6 600 From General Budgets (taxes) 2008 WS accounting (investments) Environmental taxes 600100 Water services Water pricing Savings for investments and loan repayments

26. 26 Water pricing Average cost (2008) 3.39 /cm Water bill : - a fixed part (subscription fee) average subscription rate : 50 /year from 0 to 100 /year – fixed by municipality – a decree has put a ceiling on fixed part - a variable part depending on the volume of water used Incentive pricing : No fixed charge (except small communities) No free supply (even for school, sport grounds, … except for putting out fire)

27. 27 Water pricing To make access to safe water and sanitation Stand surety for guarantee and security deposit are banned Social funds to pay water for poors Average cost (2008) 3.39 /cm Annual c ost for household (2008) 400 0,8 % average income of households

28. 28 State taxes (V.A.T.) Water agency Sanitation authorities Sewerage Wastewater treatment Drinking water authorities Treatment plants pipes 42 % 6 % 17 % 36 % Water pricing Average cost (2008) 3.39 /cm

29. 29 Water services in France PPPs, Funding and Water Pricing Спасибо за ваше внимание