ROSTOCK- GüSTROW - Suez Environnement

WATER STORIES
ROSTOCKGüstrow
cONCESSION Contract
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Editorial
Water stories
rostock-GÜstrow
Jean-louis chaussade
CEO of SUEZ ENVIRONNEMENT
The WATER STORIES collection takes a
closer look at the services and benefits
obtained through SUEZ ENVIRONNEMENT
contracts. SUEZ ENVIRONNEMENT has been
providing water and wastewater services to
local authorities since 1880.
When SUEZ ENVIRONNEMENT signs a
contract, our involvement goes far beyond
the simple provision of services. To support
local development, we get involved with
local industrial networks - working with local
suppliers and contributing to local economies
and social welfare.
Our policy of know-how transfer guarantees
the long-term improvement of the services.
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In this edition of Water Stories, we take a
closer look at Rostock, which became the first
water and wastewater services concession
in Germany in 1993, and still serves as PPP
model for the water business throughout
Germany. At that time, one of the key issues
at stake was to safeguard local jobs and
to keep the know-how in the company.
Throughout the contract a major focus has
been given to protect the human resources
and keeping jobs.
Another major challenge quickly arose: to
preserve the environment – seawater in
particular – in order to attain the objectives
of the Helsinki Convention (HELCOM). This was
achieved with the construction by Degrémont
of two additional treatment modules for the
wastewater treatment plant.
The excellent work achieved in the greater
Rostock-Güstrow area shows to what
extent public-private partnership solutions
are relevant for setting up public services
that are efficient, environment-friendly, and
sustainable.
BACKGROUND
Rostock-Güstrow
A window onto the Baltic
Located in the centre of the
Bal­tic coastline, the greater
Rostock-Güstrow area is one
of the most im­por­tant urban
centers of the area. Rostock is
the largest city of MecklenburgWest Pomerania; Warnemünde,
the coastal district of Rostock,
is a major attraction for the city
with its old houses located on
the seafront, its vast beach, the
old fishing port, and lighthouse;
and Güstrow, the culturally
rich city of famous artist Ernst
Barlach, is yet another major
attraction. In the Middle Ages,
Rostock was a leading member
of the Hansa(*) or Hanseatic
League, helping the town develop
into a power­­ful port with 12,000
inhabitants and one of the
wealthiest cities in the alliance.
The ships of the Hansa which
sailed the Baltic were built
in Rostock. In 1419, the
University of Rostock was the
first to be founded in the Baltic
region. Today, 500,000 people
live in the greater RostockGüstrow region, which serves
as a major supra-regional
commercial, administrative, and
cultural centre.
* The Hansa, or Hanseatic League,
was a shipping guild set up by the
trading towns around the Baltic and
North Seas. It played a significant
commercial and political role from
the 12th to the 17th centuries, before
disappearing during the Thirty Years
War.
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the contract
Water stories
rostock-GÜstrow
The Rostock Model:
A pioneer city for
delegated utility
services
Shortly after the reunification of Germany, Rostock had
to completely reconsider its water and wastewater
management. Because they were aware of the major
issues at stake, the local authorities started discussions
with private operators. The concession contract signed in
1992 became a model in Germany.
In 1990, the responsibility
for water and wastewater
management switched
from the VEB WAB(1), the
regional water and wastewater
management board of former
East Germany, to the municipal
authorities. The economic
background was difficult, with
a high unemployment rate and
dwindling populations. The local
authorities were also confronted
with taking over the management
of water and wastewater services:
the raw water from the River
Warnow was difficult to treat
because of the high rate of organic
matter, wastewater discharged into
the estuary of the River Warnow
after simple primary treatment,
and low levels of access to the
wastewater network for the
(1)
VEB WAB: VEB Wasserversorgungsund Abwasserbehandlung
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people in the surrounding suburbs.
The biggest challenge, however,
was the existence of an only
mechanical treatment module at
the WWTP Rostock.
Constructive
exchanges
The authorities started discussions
with various private groups
interested in the project,
leaving them the possibility to
put forward suitable solutions,
formulae and types of contracts.
This discussion phase allowed
SUEZ ENVIRONNEMENT to suggest
a new specification concerning
the requirements, priorities and
investments required for Rostock.
Response to
the new environmental
requirements
An invitation to tender was
launched in 1991 in order to find a
private partner able to finance the
large-scale investments required.
The objective was to improve
the quality of drinking water, to
extend the wastewater network
and to meet the requirements of
the Helsinki Convention on the
protection of the Baltic Sea, and
the standards of the European
Union by financing and building a
wastewater treatment plant.
the contract
The “Rostock Model”
First water concession
contract in Germany
A concession contract with a high level of initial
investment and performance objectives was
signed by and between EURAWASSER (50%
Thyssen – 50% Lyonnaise des Eaux) and the
Warnow Wasser- und Abwasserverband water
board (WWAV). The first water services concession
contract to be signed in Germany, now known as
“Rostock Model”, came into effect in April 1993,
with a term of 25 years. The contract included the
water and wastewater services for Rostock and
36 surrounding municipalities (a total of 250,000
inhabitants). Since 2000, EURAWASSER Nord
is also responsible for providing the water and
wastewater services in northern Mecklenburg,
working for the Wasserversorgungs- und
Abwasserzweckverband Güstrow-BützowSternberg (WAZ).
The EURAWASSER Rostock GmbH and the
EURAWASSER Mecklenburg GmbH merged into
one company in 2003 in order to operate even
more efficiently. Today’s EURAWASSER Nord, a
subsidiary of the EURAWASSER Aufbereitungsund Entsorgungs GmbH, is the state’s largest
water company, providing water and wastewater
services to 311,000 customers. Today,
SUEZ ­ENVIRONNEMENT is 100 % owner of the
EURAWASSER group. While the WWAV ultimately
controls the contract articles, decides on investments
for reconstruction, infrastructure investments, and the
wastewater fees, EURAWASSER Nord has to guarantee
the water and wastewater services, to operate
and maintain the necessary infrastructure, and to
implement investments and maintenance. Compared
to many PPP models used today, an important
difference is the ownership of infrastructure, which
exclusively remains in the hands of the Water Board.
Accountable contract management
The trust between the contract partners made it possible to successfully cope with the
new requirements of the water management, infrastructure and control of rates to the
satisfaction of both partners.
"The first years of the
contract were characterised
by a massive decline in water
consumption, whose extend
surpassed even the worst
forecast. At the time, the partners
had to manage investments and
reconstructional work worth a
total of 450 million €.
The Rostock Model managed to
meet these challenges ”, Katja
Gödke, General Manager of the
WWAV, explains. In the context
of constructive negotiations, the
partners have used all legally
acceptable possibilities, in
order to implement moderate
price increases in relation to
the original price formula. “In
my opinion, the secret of the
success of the Rostock Model
is the fact that both contract
partners work as equals and
have always been willing to
adapt the contract whenever this
was necessary due to changing
parameters”, says Katja Gödke.
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Environment
The Helsinki
Convention
Helping
the Baltic Sea
In 1974, the countries bordering the Baltic Sea
signed the International Helsinki Convention
for the protection of the Baltic Sea (HELCOM)
designed to reduce the pollution in the Baltic
caused by waste disposals into rivers, the
direct release of sewage into the sea by coastal
towns and sea disposals by shipping, as well as
atmospheric pollutants. The convention came
into effect in 1980.
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Water stories
rostock-GÜstrow
Environment

Treated effluents released in
the Warnow river
n
An environmental
commitment
In obtaining a modern wastewater treatment plant, Rostock succeeded
in complying with the new environmental requirements in effect in the
countries of the Baltic region.
EURAWASSER Nord has always been
strongly committed to environmental
protection. Thanks to the concession
contract, EURAWASSER Nord has ensured
the protection of the natural environment,
by treating the effluents released in this
way. A “turn-key” sewage plant was built
by Degrémont (SUEZ ENVIRONNEMENT) in
18 months, two years ahead of schedule.
It complies with the requirements of the
Helsinki Convention (HELCOM)– it was
subsequently removed from the HELCOM list
of polluted centres in the Baltic area – and the
standards of the European Union. The quality
of the swimming water in the Baltic Sea at this
seaside resort region has also being improved
as a result of this investment.
Biofor: excellence in
biological filtration
Before work started, the sewage plant
had only one primary treatment stage.
This was supplemented by a second and third
wastewater purification stage and basically
modernised. It was the first time that the
biological filtration process (Biofor) was used
in Germany. This innovative solution is used
to react in a flexible and immediate way to
extreme fluctuations in workloads. In addition,
this highly effect­ive technology has the great
advantage of taking up very little space in the
plant, which meant that the site located in the
Bramow district could be maintained.
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Social Contract
Water stories
rostock-GÜstrow
Respecting
the social contract
By involving the trade unions in the management of the
new structure in charge of water, EURAWASSER Nord
developed solid ties with the staff. The change respected
the employees and their culture, making Rostock a model
for utility management among German local authorities.
The adoption of the contract
and its success are due to
both EURAWASSER Nord
and the WWAV water board.
The public authority was closely
associated with the communication
efforts by EURAWASSER Nord. The
“Rostock Model” has become a
reference throughout Germany,
positioning the city as a pioneer
in the management of public
services and giving it supralocal scope and scale. There is
genuine co-operation between the
operator and the local authorities,
facilitated by the existence of the
Contract Monitoring Committee
(Vertragsbeirat) which meets at
least once per quarter, and by
the weekly meetings between
EURAWASSER Nord and the WWAV.
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The strength of a
trust relationship
The public structure which
preceded EURAWASSER Nord
had 480 employees, an oversized
payroll since Rostock was the
location for the VEB WAB responsible
for a much larger territory.
EURAWASSER Nord refused to resort
to dismissals in a region facing many
social challenges, and the company
took on 425 employees on the initial
payroll. Today, the company has 410
employees, including 25 apprentices.
This will to respect an implicit
“social contract” helped create a
trust relationship between the utility
company and the “Betriebsrat”
(workers council). In line with the
German tradition of co-management,
the general secretary of the
works council is a key contact for
EURAWASSER Nord management.
One of the highlight of this close
partnership was the signing of
a “Social partnership contract”
between EURAWASSER Nord and
the IG BCE union in 2007. Based on
the labour relationships, it contains
concrete programs for the future
corporate strategy vis-à-vis the
demographic change in Germany.
Social Contract
Attachment to the
corporate culture
EURAWASSER Nord staff have not
disowned their pre-1990 roots in their
corporate culture, characterised by loyalty
to the firm, which makes extensive use of
in-house promotion (certain senior executives
began their careers as apprentices at the age
of 16), by a high rate of female employees
including in positions of responsibility or
involving operating techniques. Currently,
almost the complete management staff
are local.
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Services
Water stories
rostock-GÜstrow
Quality water,
optimised treatment
In Rostock, EURAWASSER Nord took up
the challenge of quality water. In addition
to its improved better taste, the water
distributed in the city today is strictly
monitored. An effort has also been made to
connect neighbouring municipalities to the
wastewater network and control the impact
of waste disposals in the River Warnow.
One of the prime objectives of
EURAWASSER Nord was to improve the
quality of drinking water, almost 100% of
which came from the River Warnow, but
whose high rate of organic matter made
the raw water difficult to treat. Investments
were quickly made to solve the situation.
The construction of ozonation units in
the drinking water production plant also
improved taste quality and reduced the
quantity of chlorine used for disinfection
by 80%.
Today, the quality of drinking water meets
the strict standards of the German degree
on drinking water (Trinkwasserverordnung),
as well as DIN 2000 standard, the provisions
in the Community directives and those of
the EU.
Continuous audits carried out by an
approved laboratory with external
monitoring by the German Public Health
Department attest to the good quality of the
drinking water. Each month, 120 samples
are subject to microbiological tests and
460 samples are chemically analysed. The
storage of drinking water in Biestow, with a
capacity of 10,000 m3, and in Niederhagen,
with a capacity of 5,600 m3, guarantees a
high degree of safety of supply for the city
of Rostock and 19 municipalities in the Bad
Doberan district.
Expansion of the
wastewater network
A sewage plant was built to treat
wastewater before being released into the
River Warnow. In parallel, a major effort
was made to extend the drainage systems.
The rate of connection in the peripheral
municipalities rose from 28% to 86%
between 1993 and 2007.
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Services
Services designed for
customer satisfaction
A series of satisfaction
surveys carried out in
1999, 2002, and 2005 helped
the company improve its
understanding of customer
expectations. The results
demonstrated a marked level of
customer satisfaction concerning
the quality of water distribution
as well as the collection and
treatment of wastewater. Actions
were undertaken to further
improve their satisfaction, such
as setting up a single call number
and a call centre (handling 80,000
customer contacts a year),
extending public reception hours,
creating a unified customer
database, and drafting a service
quality charter. In the last survey
(2005), a total of 2,000 customers
were being asked about
EURAWASSER Nord. 94 per cent
thought that the company provides
for a very good drinking water,
an excellent water quality, and
very good wastewater services.
A total of 95 per cent customers
have used the Customer Service
Center and thought that it
worked service-oriented and
competent. Another 76 per cent
appreciated that the WWAV and
EURAWASSER Nord have kept
prices on the same level, and 94
per cent of customers thought that
the company did a good job with
setting up appointments, complying
with customer wishes and keeping
them informed as well as offering
the latest technology and improving
drinking water quality.
Scientific partnerships
By having the University of Rostock as a partner in the optimisation
programme for the wastewater plant, EURAWASSER Nord developed
its expertise in energy consumption and sludge treatment.
In 1994 EURAWASSER Nord signed a
partnership agreement with the Institute
for Environmental Engineering, Sanitary
Engineering Division, of the University of
Rostock. Over time, what was initially intended
to be a simple scientific support for the
Rostock sewage plant has radically changed
in scope and scale. In addition to optimising
energy consumption, managing resources and
sludge drying in the Rostock sewage plant,
the results of the research involved have
also been applied to smaller treatment sites
in rural locations. The results of the research
have also been taken into account in subjects
such as site restoration and reducing the
olfactory nuisance caused by the sanitation
system. 14 years later, the partnership is
still going on with, in particular, programmes
focusing on the optimisation of sludge
thickening, flood protection, and the wastewater
canal management in the Hansestadt Rostock.
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INVESTMENTS
Water stories
rostock-GÜstrow
Key figures:
€ 300 M
Since the beginning of the contract,
EURAWASSER Nord has spent a total
of 300 million € for the restoration and
investments in water and wastewater
infrastructure. Included in this figure
are these top investments:
10.9
million €
for the development
of the Rostock water plant
84.7
million €
for the modernization
of the Rostock WWTP
63.9
million €
for the extension of
the drinking water system
141.5
million €
invested for the increase
of access to the
wastewater network
for the people in the
surrounding suburbs from
28 to 86 per cent
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INVESTMENTS
An ambitious
investment policy
Thanks to the synergies between EURAWASSER Nord and its public partner,
the needs and the priorities for investments in water were quickly established.
A mere three years after the beginning of the contract, the city had a modern
drinking water production plant and a central wastewater plant.
From the outset of the discussions
with the public partner, the need to
improve the drinking water and wastewater
networks were fully defined, and the
investments budgeted and scheduled.
During the first three years of the contract,
EURAWASSER accepted short deadlines for
the following tasks:
-The construction of an ozonation unit of the
drinking water production plant (built in 16
months) with a capacity of 90,000 m3. The
unit improved the water quality, and reduced
the amount of chlorine used by a factor
of three.
-The construction of a wastewater sewage
plant for 320,000 population equivalents,
to treat the effluents which were hitherto
released into the Warnow river after
simple primary treatment. The new
plant, engineered by Degrémont, entered
service in 1996. In the second phase
(2002), with very limited investments
(modification of the ventilation system),
its capacity was increased to 400,000
population equivalents.
These two infrastructures alone represent an
investment of 90 million €.
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Water stories
rostock-GÜstrow
the future
Perspectives for
EURAWASSER Nord
The Rostock model has proven how to create a public-private partnership in the water
business to the benefit of citizens and communities. A new agreement with a mid-term
investment and business plan of the private operator for the next five years was signed
in 2006.
In the coming years, EURAWASSER
Nord will continue to implement its
already started strategy for sustainable
development. This will focus on human
resources development, innovation and
energy optimisation, environmentally
sound policies and the continuation of
the social contract.
The latest expertise from science and
research shall be used for our clients
in water and wastewater services, with
support by the close cooperation with
the University of Rostock. It is ever more
important to implement innovative
processes for increasing efficiency in
day-to-day operations. One of the most
important challenges for the years
to come will be the control of costoptimised energy usage in our facilities
while reducing the CO2 emissions.
A new sludge strategy is aimed at
reducing sludge production and find new
ways to dispose of sludge. Finally, a
comprehensive quality management and
environmental program to implement
the EU Water Framework Directives for
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safeguarding drinking water catchment
areas will be another important task in
the coming years. For EURAWASSER Nord,
the social dialogue with contract partners,
communities, and citizens will continue to
play an important part.
In addition, the company will lend
its support to strengthen the region
economically by developing its own
acquisition unit in order to attract new
business segments, customers and
cooperation partners.
The expectations
of the public partner
Katja Gödke General Manager of the WWAV
“15 years ago, the public
partner made a decision quite
revolutionary for the time,
by hiring a third party, the
private partner EURAWASSER,
to operate the water and
wastewater facilites. In late
2006, the WWAV and EURAWASSER
Nord could even announce the
complete implementation of a highly
ambitious wastewater concept – the
first of that kind in the state. Thanks
to slowly increasing numbers in
water consumption and the positive
economic development in the
greater Rostock region, as well as
a strict policy of cost management,
the price for drinking water and
wastewater fees remain on the
same level for the sixth consecutive
year. The future work will focus
on the further development of
EURAWASSER Nord as a service
company as well the increase of
efficiency in operations, showcasing
the fact that the customer comes
first in this partnership between a
water board and a private company,
and that the cost performance ratio
is adequate.”
NATURAL RESOURCES ARE NOT INFINITE.
EACH AND EVERY DAY, SUEZ ENVIRONNEMENT AND ITS SUBSIDIARIES RISE TO THE
CHALLENGE OF PROTECTING THESE RESOURCES BY PROVIDING INNOVATIVE DRINKING WATER,
WASTEWATER AND WASTE MANAGEMENT SOLUTIONS TO MILLIONS OF PEOPLE AND INDUSTRY.
WITH
62,000 EMPLOYEES, SUEZ ENVIRONNEMENT IS THE ONLY GLOBAL
CONTINENTS, EXCLUSIVELY DEDICATED TO
COMPANY, PRESENT ON FIVE
ENVIRONMENTAL SERVICES. IN 2007, SUEZ ENVIRONNEMENT GENERATED
TURNOVER OF 12
BILLION EUROS.
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