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City of Indianapolis and Veolia Water partnership receives national recognition

11/18/04  • Water
INDIANAPOLIS, Nov.18, 2004 - Indianapolis Mayor Bart Peterson and his staff had clear goals in mind when embarking on the development of the nation's largest water partnership in May 2002. Local control, rate stability and water-quality improvements were crucial to the city's future.

More than two years later, the city's strategy has been recognized by the National Council for Public-Private Partnerships (NCPPP), which, last night, awarded Indianapolis and private-sector partner Veolia Water Indianapolis, LLC (Veolia Water) with its Public-Private Partnership Award in the service category. 

Under a 20-year, $1.5 billion contract, Veolia Water manages all operations, maintenance and customer service facets of the city's waterworks system, including a variety of capital improvement projects. The partnership operates and is known to area consumers as Indianapolis Water.

"The City of Indianapolis and Veolia Water have and continue to work closely together in a win-win partnership to realize economic and environmental benefits to our entire community, including a five-year rate freeze for our customers," said Indianapolis Mayor Bart Peterson. "We built this partnership with the interests of the citizens in mind and are pleased with the progress we've made in our first two years."

Performance-driven contract
Unique to the Indianapolis partnership is a link between performance and compensation that includes 40 incentive criteria relating to water quality, customer service, operations and management, and community involvement.

"Our contract with the city calls for a higher level of service to the customer. If we don't perform, we don't get paid for that portion of our contract," said Tim Hewitt, president and operations manager for Veolia Water Indianapolis, LLC. "The partnership really is setting a new standard in water and wastewater services. We have more challenges to face but are very satisfied with the diligence our employees have demonstrated to date."

The partnership enabled Indianapolis to freeze water rates for five years. Taste and odor complaints, which have long affected different areas of the city, have plunged from more than 500 in 2001 (prior to Veolia Water's management) to just 24 calls this year (10 months of records ending this October 31). The partnership has also exceeded the city's goal of 25 percent of contracted business being managed by minority- and women-owned business enterprises.

In winning the contract, Veolia Water Indianapolis made a long-term commitment to solving water taste and odor problems that have affected the city for many years. The company entered into a 20-year, $5 million research and development partnership to create the Indianapolis Water Quality Project (Center for Earth and Environmental Sciences and the Central Indiana Water Resources partnership). The company has also partnered with local environmental groups on issues such as watershed education, outreach and protection of local reservoirs.

"At the center of our partnership is a contract that draws out the needs and requirements of the client and end consumers," said Mike Stark, president and CEO of Veolia Water North America. "We have also developed a spirit of teamwork with the city and the Indianapolis Waterworks Board to make sure that performance incentives always meet the needs of Indianapolis Water consumers. Our success to date is the direct result of the true partnership forged between Veolia Water, the Waterworks Board and the city which allows us to jointly address and solve issues as they arise. We are all very proud to have been selected for this recognition by public-sector officials and private-sector peers."

The partnership has expanded customer services with the addition of a comprehensive call center that operates 24 hours-a-day, seven days-a-week. Major capital investments have included major pipeline contracts in neighborhoods with contaminated wells. Community involvement has included contributions of more than $1.8 million to local not-for-profit organizations, as well as employee involvement in numerous causes.

More than 1,000 communities now served

There are now more than 1,000 water and wastewater public-private partnerships in North America, according to the NCPPP, a Washington, D. C.-based national network of senior government officials and business leaders that provides organizations with a dependable information source on current activities in the public-private partnership arena.

"Partnerships are not a panacea but they have helped many, many communities including large cities and small towns," explained Rick Norment, NCPPP executive director. "Benefits include service enhancements and cost savings in both infrastructure improvements and day-to-day operations, which helps stabilize rates and reduce the financial burden on ratepayers."

The nation's first water partnership was created in 1972 between the city of Burlingame, Calif., and Veolia Water (then known as Envirotech Operating Services) and included the management of a 5.5 million gallons-per-day wastewater treatment facility. After more than 30 years of operation and repeated contract renewals, the Burlingame partnership today represents the nation's longest running water services partnership between public and private sectors.

The National Council for Public-Private Partnerships is a non-profit, non-partisan organization founded in 1985. The Council is a forum for the brightest ideas and innovators in the partnership arena. Its growing list of public and private sector members, with experience in a wide variety of public-private partnership arrangements, and its diverse training and public education programs, represent vital core resources for partnering nationwide. More information on NCPPP can be found at www.ncppp.org.

With a service area that encompasses parts of nine Central Indiana counties, Indianapolis Water serves approximately 1.1 million people and employs more than 460 people. It includes four surface water treatment facilities with daily water production averaging 138 million gallons per day (MGD) and peak demand capacity in excess of 200 MGD.

Company Information
Veolia Water North America is the leading provider of comprehensive water and wastewater services to municipal and industrial customers, providing services to approximately 14 million people in more than 600 communities. The company is part of Veolia Water, the No. 1 water company in the world serving more than 110 million customers. Veolia Water is the Water Division of Veolia Environment (NYSE:VE and Paris Bourse: VIE), the largest environmental services company in the world with more than 310,000 employees in about 80 countries and annual revenues of more than $36 billion. Visit the company's web site at www.veoliawaterna.com.

Important Disclaimer
Veolia Environnement is a corporation listed on the NYSE and Euronext Paris. This press release contains "forward-looking statements" within the meaning of the provisions of the U. S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside our control, including but not limited to: the risk of suffering reduced profits or losses as a result of intense competition, the risk that changes in energy prices and taxes may reduce Veolia Environnement's profits, the risk that governmental authorities could terminate or modify some of Veolia Environnement's contracts, the risk that Veolia Environnement's compliance with environmental laws may become more costly in the future, the risk that currency exchange rate fluctuations may negatively affect Veolia Environnement's financial results and the price of its shares, the risk that Veolia Environnement may incur environmental liability in connection with its past, present and future operations, and the risks related to Veolia Environnement's relationship with Vivendi Universal, as well as the risks described in the documents Veolia Environnement has filed with the U. S. Securities and Exchange Commission. Veolia Environnement does not undertake, nor does it have, any obligation to provide updates or to revise any forward-looking statements. Investors and security holders may obtain a free copy of documents filed by Veolia Environnement with the U. S. Securities and Exchange Commission from Veolia Environnement.