French re-municipalisation hits Veolia Water hard

Published January 24th, 2013

Veolia Environnement is set to lose historic water services contracts in the French municipalities of Rennes and Aubagne, after both voted to set up their own public service companies (PSC) to serve water customers.

The contracts in Rennes and Aubagne are due to expire in 2014 and 2013, respectively.

The decision to re-municipalise is part of a growing trend in France. In 2011, Brest became the first city to set up a PSC – also at Veolia’s expense.

In 2011, Veolia generated €10 million in revenue from water distribution in Rennes and a further €9.2 million from water production in the city and adjoining municipalities, representing almost 400,000 inhabitants.

“There’s a contradiction between the council’s aim to reduce water consumption and that of the operator whose interest is to see it increase. This explains the decision to create a PSC,” a spokesman for the city of Rennes told GWI.