Innovative partnership at the Innovative partnership at the service of citizens and the service of citizens and the

environment: best practice in environment: best practice in transport, water and waste sectors transport, water and waste sectors

Water management by MIDEWAWater management by MIDEWA

Peter KunertPeter KunertChairman of the supervisory board of Chairman of the supervisory board of

MIDEWAMIDEWA

Brussels, 5th October 2010

Slide 2

Overview

I.

II. Initiation of the PPP-model MIDEWA

III. MIDEWA today

IV.

Foundation of MIDEWA

10 years of PPP - summary

V. Summary

Slide 3

I. Foundation of MIDEWA

Municipal holding

company

Mitteldeutsche

Wasser und

Abwasser

GmbH

StadtwerkeZweckverbände

GemeindenTakeover of independent

power 1992 - 1995

MIDEWA Wasserversorgungsgesellschaft in Mitteldeutschland

mbHFoundation on 05.12.1996 through

280 municipalities

Transferee

The MIDEWA Wasserversorgungsgesellschaft in Mitteldeutschland mbH was founded as part of the divestiture of Mitteldeutsche Wasser und Abwasser GmbHin 1996.

The detachment of the water supply and wastewater disposal from theformer company entailed the need for municipalities that did not aspire own solutions, to find a supply structure and organization. In consequence, 116 municipal partners founded MIDEWA. Theyrepresented about 280 mostly small municipalities, which partly have joined in associations or in a municipal holding company.

Slide 4

II. Initiation of the PPP-Model MIDEWA

⇩ outdated water supply systems and high investment needs⇩ no loan extension by the banks due to over-indebtedness and mismanagement ⇩ preservation of the local community of interests and responsibilities

Maintenance of public control– Strengthening of financial power - Benefit from private know-how

Sales revenue remains in the MIDEWA to reduce liabilities

European tender of 25.1% of the shares and the operational management aiming at the participation of a private partner

Veolia-subsidiary OEWA Wasser und Abwasser GmbH wins the tender

Slide 5

II. Initiation of the PPP-Model MIDEWA

⇩ Entrepreneurial partnership between the municipalities - MIDEWA – OEWA/Veolia⇩ Preservation of the autonomy of MIDEWA through majority of shares⇩ Transfer of private know-how⇩ Support of local interests

⇩ Creation of an efficient Organization⇩ Sustainable human resources policy⇩ Water-pricing policy with incentive system⇩ Quality assurance concept – infrastructure and water quality⇩ Establishment of an integrated quality management system⇩ Continuous investments in water supply installations ⇩ Utilization of synergies⇩ Market development and marketing activities ⇩ Evolution of a water company to an environmental service provider

Slide 6

MIDEWA – scope of services

Wastewater disposal

Public lighting

Management of municipal

swimming baths

Heat supply

Industrial

services

Services for the flooding of

lignite mines

Further

services

Water

supply

Slide 7

III. MIDEWA – today in Sachsen-Anhalt

Turnover 2009 45 Mio. €

Supply area 3.110 km²

No. of staff 400

Population (wastewater disposal) 210.000

No. of customers 104.100

Population (drinking water) 370.000

Drinking water volume 2009 20,2 Mio. m³

Municipalities supplied 85

• BerlinBerlin

Slide 8

III. MIDEWA – member of the Veolia Wasser Group

50% 100%

74,9%

25,1%

50%

74,9%

(1990)

(1999)

(2001)

(2003)

(2006)

(2003)

FSA FernwasserSachsen-Anhalt

GmbH

Wärme- und Energieges. GHC mbH (WEG)

INFRA Service Sachsen-Anhalt GmbH

(2009)

(2007)

(2004)

49 % 100 % 50 %

45,8 %

100 %

Slide 9

Independent, successful, majoritarian municipal company with high reputation

Service provider in the infrastructural and environmental sector – all under one roof!

Balanced distribution of concession and management contracts

Three water price reductions through an incentive system in co-operation with the

private partner

Solidarity ensures consistent prices

IV. 10 years of PPP - summary

1,65 1,68 1,71 1,73 1,76 1,79 1,821,86

1,91 1,92 1,94

1,65

1,50 1,50 1,50 1,47 1,44 1,44 1,44 1,44 1,44 1,44

1,40

1,60

1,80

2,00

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Jahr

€ / m

³

Reference price incl. Inflation rateIST quantity net price MIDEWA Constant basic charge

Slide 10

Performance-enhancing company agreement with job security and health

management, high proportion of trainees and consistent training of staff

Customer-oriented structures and service guarantees

Certified in quality, environmental and safety management

Certified in job and family (Beruf und Familie)

Replacement of 300 km water supply pipes, reducing the water losses by half

Fair co-operation between MIDEWA und OEWA/Veolia Wasser

IV. 10 years of PPP - summary

Slide 11

Incited by the PPP model, MIDEWA developed from a municipal water supply company to a successful

environmental services provider

Summary