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Transcript of 1 Jean-Pierre Rideau Deputy Director of the territorial planning and legislation water and raw...
1
Jean-Pierre Rideau
Deputy Director of the territorial planning and
legislation water and raw materials
Department for Water and Biodiversity
Ministry of Ecology, Sustainable Development,
Transport and Housing
France
WWW.developpement-durable.gouv.fr
Ministère de l'Écologie, de l'Énergie,du Développement durable et de la Mer
Water services in France : PPPs, Funding and Water Pricing
22
public-private partnerships in France
CONTENTS
1. Historical involvement
of Public Private Partnerships
2. Public Private Partnership Contracts
3. Awarding delegation of public services
4. Building governance tools for public-
private partnerships
5. Funding and water pricing
33
Technical and financial risks
first water company in Paris (1778 – 1788)
Freedom of trading (1791)
public-private partnerships in France
Water supply To public fountains : being free To households : a commercial activity
The municipalities Ensure water supply at public fountains Should entrust households water supply to private companies
1800 - 1850
1. Historical involvement of public – private partnerships
44
public domain : inalienable goods
Municipalities allowed licences for the use of the public domain to develop water infrastructures (=> B. O. O. T.)
public-private partnerships in France
The licence defined specifications, price, and duration of the concession
1830 - 1884
After the 1st World War, a high monetary depreciation forced to change tariffs registered in concession contracts
Rather than increasing water prices, municipalities take part in the development of water infrastructure (=> Contracts Operation & Maintenance)
1. Historical involvement of public – private partnerships
55
Linking An insufficient improvement of water supply (capital investment depending on the private sector)
And water-borne diseases
Municipalities are allowed to create local services to improve public health
public-private partnerships in France
(1884 Act)
Direct labour
1926 decrees enhance this trend of bringing services under control of local authorities
1. Historical involvement of public – private partnerships
66
public-private partnerships in France
CONTENTS
1. Historical involvement of Public Private
Partnerships
2. Public Private Partnership Contracts
3. Awarding delegation of public services
4. Building governance tools for public-
private partnerships
5. Funding and water pricing
77
public-private partnerships in France
500,000 km2
62,000,000 inhabitants35,000 communes (municipalities)Tap water : 4 billion m3/y.
Municipalities (or groupings) organise water and sanitation services
Water supply : 4500 PPP 70 % of inhabitants
Sanitation : 4000 PPP 55 % of inhabitants
2. Implementation of PPPs
88
Water => local resources
local authority governance
operator results obligationdrinking water standards
environmental standards financial / technical risks
public-private partnerships in France
A contractual freedom of local authorities
Governance by local authorities
« a local regulation by contracts without national regulator »
2. Implementation of PPPs
99
public-private partnerships in France
Administrative courts auditing of procedures and accounts
State environment and drinking water inspectorate (withdrawal and discharge permits)
2. Implementation of PPPs
A contractual freedom of local authorities
Governance by local authorities
« a local regulation by contracts without national regulator »
1010
Concession contract
Built, Own, Operate and Transfer (BOOT)
The provider manages, finances and renews infrastructures
On completion of the contract, all infrastructure are the municipality property
Water pricing (Price paid by the end users)
public-private partnerships in France
Contract operations and maintenance (ConOps) The service provider manages, maintains infrastructures The municipality carries out new equipments and renewal
Operations and maintenance + financing ConOps The service provider finances some specific infrastructure
(renewal, plant treatment, …)
Water and sewerage services in France :
8500 delegation contracts
ConOps = 98 %
2. Implementation of PPPs
Private Finance Initiative Contract BOOT
Payment by the public partner
1111
public-private partnerships in France
Act n° 93-122 Jan. 29th, 1993 : Awarding delegation of public services
Act n°2001-1168 Dec. 11th, 2001 : delegation is
« a contract trough which an institution of public law awards management of a public service, for which it is responsible, to a service provider, either public or private, the remuneration of which is substantially linked to the operating results of the service. »
Payment by the end users
Publics’ services concession (BOOT & ConOps)
PFI (Private Finance Initiative) Act n° 2004-559 June 17th, 2004 Payment by the public partner
1212
1990 – 2000 : new targets
a distinct improvement in governance
users information
contracts monitoring
financing renewal
public-private partnerships in France2. Implementation of PPPs
1313
public-private partnerships in France
CONTENTS
1. Historical involvement of Public Private
Partnerships
2. Public Private Partnership Contracts
3. Awarding delegation of public services
4. Building governance tools for public-
private partnerships
5. Funding and water pricing
1414
public-private partnerships in France
1993 law in the prevention of corruption and transparency in economic life and public procedures
8 500 contracts
600 - 1000 come to an end each year8 to 11% : change of service provider after competition1% : delegation to municipal management 3% : municipal management to delegation
Averaged duration contracts after competition : 12 years
3. Awarding delegation of public services
1995 law : max. 20 years for contracts banning « entrance fee » practice
Advertisement and competitive bidding
1515
public-private partnerships in France
Proposal for a directive on concessions (Amending directives 2004/17/EC and 2004/18/EC)
Definition of a concession : a reference to transfering the operating risk to the concession holder
The concession contract shall be limited on time
Obligation to publish a concession notice
Regulating minimum deadlines for the submission of bids
Verification of the suitability of tenderers (transparent, non-discriminatory and proportionnal selection criteria should refer to technical, financial and economic capacity of operators )
Publics’ services delegation
1616
public-private partnerships in France
CONTENTS
1. Historical involvement of Public Private
Partnerships
2. Public Private Partnership Contracts
3. Awarding delegation of public services
4. Building governance tools for public-
private partnerships
5. Funding and water pricing
1717
Water supply networks
In 2008, the water supply network represents 1,000,000 km of pipelines
(in 1950, only 8% existed)
In 2008, 99% population is connected
(completion of water supply network)
0
200
400
600
800
1000
1940 1950 1960 1970 1980 1990 2000 2004
x 10
00 k
m
Maintaining, updating and upgrading equipments
Planning of renewal
1818
To Improve governance
Networks renewal schedule (for operators in charge of renewal)
Operator should update the networks maps
(Water Act, Dec. 2006)
public-private partnerships in France
4. Building governance tools for PPPs
1919
To Improve transparency The mayor is in charge of publishing an annual report on the price and performance of water and sanitation services The service provider submits an annual report on management of water and sanitation services including accounts and analysis of service quality
4. Building governance tools for PPPs public-private partnerships in France
To share a common understanding
To ensure a social consensus To maintain the funding capacity
2020
To Improve transparency Consultative committees for local public services (stakeholders appointed by the mayor)
Consultation of the committee before any change in public or private management The committee should examine annual reports and express a view for the local council
4. Building governance tools for PPPs public-private partnerships in France
To share a common understanding
To ensure a social consensus To maintain the funding capacity
2121
public-private partnerships in France
Local authority(municipality)
Operator(public or private)
Consumers
stakeholders
Administrative Courts : auditing of procedures and accountsState : control legally binding standards
Performance Indicators(Decree - May 2007)
=> A sunshine regulation
4. Building governance tools for PPPs
2222
public-private partnerships in France
CONTENTS
1. Historical involvement of Public Private
Partnerships
2. Public Private Partnership Contracts
3. Awarding delegation of public services
4. Building governance tools for public-
private partnerships
5. Funding and water pricing
2323
public-private partnerships in France
5. Funding and water pricing
Accounting instructions
Separate the water accounting from the general accounting of the municipality
(1967-1969 decrees)
Apply depreciation in accounting(1992 decrees)
“Water users pays for water use”
2424
WS accounting (incomes)
M€ (2004) PPP Municipal TOTAL
Water Pricing (1)5 452 4 443 9 895
Subsidies for operating and maintenance (2) 377 377
Total incomes = (1) + (2)5 452 4 820 10 272
Maintenance costs (3) 4 791 2 466 7 257
http://economie.oieau.fr/IMG/pdf/070921_EY_MEDAD_Recup_Couts_Rapport_final.pdf
Data VAT and water agencies fees
Savings for investments and loan repayments = (1) + (2) – (3) 3 015
2525
MillionMillion
Water agencies
1 450
Regions Municipalities
Users
(households and users likened as, industry, stock breeders,…)
Investments : 6 600
FromGeneral Budgets (taxes)
2008WS accounting (investments)
Environmental
taxes
600 100
Water services
Water pricing
Savings for investments and loan repayments
2626
Water pricing
Average cost (2008) 3.39 € /cm
Water bill : - a fixed part (subscription fee)
average subscription rate : 50 €/year
from 0 to 100 €/year – fixed by municipality – a decree has put a ceiling on fixed part
- a variable part depending on the volume of water used
Incentive pricing :
No fixed charge (except small communities)
No free supply (even for school, sport grounds, … except for putting out fire)
2727
Water pricing
To make access to safe water and sanitation
Stand surety for guarantee and security deposit are banned
Social funds to pay water for poors
Average cost (2008) 3.39 € /cm
Annual cost for household (2008) 400 €
0,8 % average income of households
2828
State taxes
(V.A.T.)
Wateragency
Sanitation authorities
SewerageWastewatertreatment
Drinking water authorities
Treatment plants pipes
42 %
6 %
17 %36 %
Water pricing
Average cost (2008) 3.39 € /cm
2929
Water services in France PPPs, Funding and Water Pricing
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