The elected officials of the European Metropolis of Lille adopted on Friday evening, in council, a public service delegation (DSP) related to the distribution of drinking water. It is Veolia to whom the MEL entrusts this mission, for a duration of eight years, and over a large part of the Lille metropolitan area, the area where MEL owns the water production facilities, i.e., 62 municipalities.
This DSP contract was competing with direct management of water services, but the latter, after comparative studies on various criteria, appeared to be 10 million euros more expensive, and furthermore, would have indebted the community by 20 million euros at the end of the eight years.
The new DSP imposes precise objectives on Veolia, notably to increase the network performance from 79 to 85% in eight years (this means reducing leaks in the distribution network), but also to renew the meter fleet (250,000 will be replaced in eight years).
The contract also establishes an eco-solidarity pricing. In clear terms, on the water bill, this will decrease: minus 36% on the first cubic meters consumed and on the fixed subscription (it goes from 30 to 5 euros per year); a 10% decrease for metropolitan residents who consume between 30 and 85 m3 per year; a 4% decrease for consumers between 85 and 120 m3; and a 1% decrease for the largest consumers, between 120 and 150 m3. In this progressive pricing, 65% of the 300,000 subscribers in the territory will be affected by these bill reductions.
“Water vouchers”
The contract also provides for the implementation of “water vouchers” for the most modest households (the allocation conditions will have to be defined collectively, MEL giving itself a six-month deadline).
The previous DSP linked the urban community with the Société des eaux du Nord (SEN) for thirty years (SEN was excluded from the call for tenders this winter, and the administrative court upheld this decision).
All employees of this company keep their jobs but change employers. A dedicated company is created by Veolia, named “iléo,” which will open its bodies to elected officials and users.
At the time of the vote this Friday evening, the EELV elected officials voted against. They defended the mode of distribution in public management and, in an amendment, requested that the “transitional nature” of this DSP be recorded and that there be an “automatic” switch to public management in 2023. Proposal rejected by a vote this Friday evening.
“In 2023, we will use the same comparative method that guided our choices tonight, and only then will we be able to make a choice between a good future DSP or a good future public management,” replied the president of the assembly, Damien Castelain. “For now, I do not pre-empt the choices that will be made during the next term.”
Lille: Will the distribution of drinking water change hands?
Setback for Suez Environment in Lille. Le Monde revealed on Friday that the bid from its subsidiary Lyonnaise des Eaux had been outright dismissed from the race to renew the drinking water distribution contract in the Lille metropolitan area. Here is an overview in four key questions about a €500 million contract (over 8 years).
What are the facts? The tender committee, which met on September 22, reportedly judged that the file submitted by Lyonnaise des Eaux was “non-compliant” with the specifications on 17 points, no less. This multiple blunder is surprising, since Eaux du Nord, a 100% subsidiary of Suez-Lyonnaise des Eaux, has managed the Lille network for nearly thirty years… The delegation was granted in September 1985 and is due to end on December 31, 2015.
Is this such a big surprise? No. The atypical 30-year contract linking Lille Métropole to Eaux du Nord has been under review for over ten years. Because contracts that long for a public service delegation are no longer common, and for good reason: after 30 years, it is too complicated for a competitor to position themselves against the incumbent candidate. Some local authorities have even terminated their lease on this basis, such as Fontainebleau in 2013.
The amicable agreement reached in 2013 between Lille Métropole and Eaux du Nord was preparing for the 2015 deadline, by listing the assets (reservoirs, pumping stations, etc.) actually owned by the Lyonnaise des Eaux subsidiary, and those owned by Lille Métropole.
Competition in drinking water, a first in Lille Métropole? Yes and no. In 1985, Eaux du Nord brought together the two main competitors under one roof. La Générale des Eaux (which became Veolia) and Lyonnaise had then agreed to jointly manage the Lille contract. This situation was denounced in 2002 by the Competition Council.
The two French giants ended this in 2009, with Lyonnaise des Eaux taking over Veolia’s share. So this was the first time the two groups faced each other in Lille. The confrontation was short-lived.
Veolia already the winner? No. The group, the sole survivor of the tender, has indeed entered into exclusive negotiations with Lille Métropole. But the urban community has not abandoned the idea of switching to direct management (direct management of distribution, without delegation to a private company). Moreover, Suez Environment is not willing to give up the fight. A legal battle therefore seems to be looming on the horizon.
http://www.20minutes.fr/lille/1455091-20141006-lille-distribution-eau-potable-va-changer-mains
