Audit commission questions Paris water bills
- From: Vol 1, Issue 11 (November 2000)
- Category: General
- Region: Europe
- Country: France
- Related Companies: Générale des Eaux, Suez and Veolia Environnement (formerly Vivendi Environnement)
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A REPORT by the Paris region’s audit commission (CRC) has suggested that water bills paid by the city’s residents could have been lower over the past ten years.
While the report acknowledges that water tariffs in the city have been among the lowest in the Ile-de-France region, it states that prices increased by 118% between 1984 and 1997 – increasing from FF2.60/m3 (excluding tax) to FF5.60/m3.
The report claims that this rise reflects incomplete control of the two private distribution companies. In 1984, the then mayor of Paris decided to delegate water supply for the next 25 years to two companies – Compagnie des Eaux de Paris (Générale de Eaux/Vivendi Water) for the right bank of the Seine and the Société Eau et Force (Suez Lyonnaise des Eaux/Dumez) for the left bank. These companies were made responsible for billing customers.
Regulation of these two contracts was assigned to Société Anonyme de Gestion des Eaux de Paris (Sagep) whose main shareholders, apart from the city of Paris (70%), are Générale des Eaux/Vivendi Water (14%) and Suez Lyonnaise des Eaux/Dumez (14%).
The audit commission report says that in this way the city of Paris gave up the responsibility de facto if not de jure of ensuring the efficient implementation of a public service – namely the supply of drinking water. In assigning the task to an organisation where the companies regulated were shareholders, the city risked a situation in which control was less than assured.
The report also highlights the resultant loss of financial transparency and what it terms a “growing gap between what Paris was paying for and what it was getting”. Sagep, it adds, did not seem to have “taken the measure of the consequences of this gap” on the price of water. The CRC has called on the city authorities to clarify the entire issue of price. Pressure to revamp the existing arrangements is also coming from the Socialist party in the city whose leader, Bertrand Delanoe, has called for a renegotiation of the contracts, which expire in 2010, between the city and the two private companies.
Interviewed on the CRC report, Delanoe criticised the “opacity, incoherence and failure to function” of what he called a “Meccano system” set up in 1985 and never properly revised since. He asked why the most profitable area of water services – distribution – had been assigned so generously to two private companies without any attempt to organise a bidding contest.
However, Delanoe noted that at the end of 1997 part of a contract had been renegotiated with the result that there had been an immediate reduction of 5.9% in the water tariff.