dcom/cor/05-10/f40 business overview 2009 · romania, where a trusting relationship between our...

Veolia Water

52, rue d’Anjou

75384 Paris Cedex, France

Tel.: +33 (0)1 49 24 49 24

www.veoliawater.com

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Business Overview 2009

VEOL_1005105 COUV EAU GB.indd 1VEOL_1005105 COUV EAU GB.indd 1 4/06/10 15:32:014/06/10 15:32:01

Interview with Jean-Michel Herrewyn

Our fundamentals

Locations worldwide

Main subsidiaries

Business activities

Human resources

Research & Development

2009 highlights

Our achievements in 2009

Water resource management and protection

Sustainable commitment to clients

and society

Pushing back the boundaries of our business

8

12

14

16

18

20

22

24

28

30

36

42

Contents

VEOL_1005105_RA-EAU_GB.indd 1VEOL_1005105_RA-EAU_GB.indd 1 3/06/10 16:30:423/06/10 16:30:42

2 Veolia Water 2009

Challenges /

Around the Mediterranean Sea, two-thirds of wastewater is

Nearly a billion people worldwide do not have access to sa

Water resources are unevenly distributed: 15 countries consume m

The number of wastewater recycling units will m

Seven percent of the world’s energy is used to produce d


3

er is still not being treated.

o safe drinking water.

e more than their available reserves.

ll more than double by 2016.

e drinking water.


4 Veolia Water 2009

Solutions /

In Central Europe, 14 plants managed by Veolia Water obtain 60

Renewable energy represents 12% of Veolia Water’s total en

Worldwide, Veolia Water maintains and monitors 349,096 km of water di

Veolia Water has built 15% of world desalination capacity, a

Since 2002, Veolia Water has reduced water system losses in Morocco that re


5

in 60% of their energy requirements from cogeneration.

al energy consumption.

er distribution networks and 141,756 km of wastewater collection lines per day.

y, a fi gure expected to double within 10 years.

at represent the equivalent of the water usage of 800,000 people.


The world’s leading operator of water services, Veolia Water operates water and wastewater services on

behalf of public authorities and companies. It also designs the technical solutions and builds the facilities

needed to provide those services. Veolia Water covers the entire water cycle with a constant focus on

protecting resources and saving water. Veolia Water’s activities range from raw water withdrawal from

the environment to production and distribution of drinking water and industrial process water, and

from the collection and transportation of wastewater to treatment for subsequent recycling or discharge

back into the environment. Veolia Water is a division of Veolia Environnement, which also provides services

in waste management, energy and transportation.


7

The global

benchmark in

water services

95,789employees worldwide

€12.56 billionin revenue

4,500 contractsmanaged around the world

Nearly 95 million peopleprovided with water service

More than 68 million peopleprovided with wastewater service

66 countrieswhere Veolia Water operates


8 Veolia Water 2009

Entretien /

Interview with

Jean-Michel Herrewyn,

Chief Executive Offi cer

of Veolia Water


9

How would you sum up 2009?

I would say that 2009 was a satisfactory year, even though

the recession obviously impacted our business.

Financially, the economic climate interrupted the strong

growth we had seen over the previous years because clients

were forced to postpone projects. Our industrial clients were

directly aff ected by declining production, while our public

authority clients had fi nancing problems. But for a company

like ours, diffi culties always mean opportunities. In keeping

with Veolia Environnement’s strategy, we thoroughly

reviewed our activities and made numerous improvements:

we exceeded our targets in cost reduction and proved that

we could achieve positive cash fl ow from our activities to

fi nance our growth.

Commercially, despite strong competition, we fared well

because our clients were even more demanding; that’s

because the recession and increasingly complex regulations

made our expertise all the more necessary to them. Many

public authorities therefore chose to renew our contracts.

One example is Mafra, Portugal. Another is Bucharest,

Romania, where a trusting relationship between our people

and the municipality resulted in the signing of an

important amendment to the 25-year contract between us,

which began in 2000. These successes have bolstered Veolia

Water’s position as the leader in European wastewater

service. The vast majority of our contracts in France were

renewed. Better yet, we won new contracts there, both in

water and wastewater services, including Mulhouse,

Chaumont and Royan (see page 31). Several of these

contracts were awarded by municipal authorities that chose

to return to private-sector management, off ering further

proof of our model’s validity.

In terms of labor relations, 2009 saw a continuation of our

work on cohesion, training and safety. In France,

implementation of our inter-company agreement—a

complex operation to ensure that 15,000 employees in

France enjoy a common framework of harmonized

conditions—was fi nalized. This underlines the quality of our

labor relations. In this favorable climate, we continued

rolling out our policy on skills management and training,

both of which ensure the professionalism of our teams

everywhere in the world and equip us to face the challenges

in our markets. Our employees also deserve the best when it

comes to occupational health and safety. Nothing will

defl ect us from this commitment, and although the law of

diminishing returns applies as we reach our targets,

our performance was good in 2009. In the United States,

our subsidiary set a new record in safety for the third

consecutive year. It rated far above the other private

companies in the water sector, according to the US Bureau

of Labor Statistics. No matter what the future brings, skills

management, training, and occupational health and safety

will remain a priority for us.

More generally, what are the big challenges

associated with water today?

Access to drinking water and sanitation, and the pressure

on water resources are defi nitely the two major challenges

of the day. And they are even greater in the current context,

with the recession and climate change heightening

disparities. As the gap between the needs and the resources

available widens, the public is becoming more and more

aware of the urgency of the situation and the need for

more-sustainable development. In 2009, the World Water

Forum in Istanbul and, to a lesser extent, the UN Climate

Summit in Copenhagen, revealed the international

community’s concern about these issues. It is increasingly

accepted that, in the face of such complex problems,

responses can only be pragmatic and local. It is also

recognized that there is a cost associated with water

services, that this cost must be recovered if the services

are to endure, and that the sector’s private professionals

defi nitely have a role to play in water management,

alongside the public and non-governmental players.


10 Veolia Water 2009

To identify the areas for improvement and be able to replicate

the experience elsewhere, Veolia Water signed an agreement

on a research partnership with the ESSEC business school’s

Institute for Innovation and Social Entrepreneurship at the

start of 2010.

How is Veolia Water’s work progressing on

reducing pressure on water resources?

Making water sustainable, in other words, satisfying

increasing needs while sustainably preserving water, is our

other major priority.

For the increasing number of clients that are interested in the

notion of saving water, we have stepped up our eff orts in

combating wastage. Our expertise in network effi ciency,

management and leakage reduction has led to signifi cant

improvements around the world. It has also enabled us to

embark on new avenues, such as tracking drinking water

quality. This involves analyzing fl ows at diff erent points with

sensors installed in the networks, so that clients can be

informed of risks and corrective action taken quickly.

In all our contracts, demand management is also a way of

Against this backdrop, how did Veolia Water

fulfi ll its role in managing water issues in 2009?

We remained focused on the question of access to basic

services for all. It was, and, as I see it, still is a priority. Veolia

Water is committed to doing its share toward achieving the

Millennium Development Goal of halving the number of

people without access to safe drinking water and basic

sanitation by 2015, and we continued to support authorities

in achieving ambitious service or connection targets.

Where local government makes water a priority, Veolia Water

has the resources and expertise to meet expectations. That is

the case in Morocco, where, for the past seven years, our work

in building equitable and effi cient water service has also saved

the equivalent of the water consumption of a city with a

population of 800,000. Our work in that country continues,

and we have asked MIT (the Massachusetts Institute of

Technology) to evaluate the impact of the system of subsidized

connections we introduced there.

Besides fulfi lling our obligations under our public service

management contracts, we continued our actions to ensure

access to water in poor rural areas. In Bangladesh, our fi rst

drinking water production plant was inaugurated in Goalmari

by Antoine Frérot and Professor Muhammad Yunus, the

co-founders of the Grameen Veolia Water joint venture.

saving water and in 2009, Veolia Water made a point to

advise its clients on managing demand. Over the past

20 years, we have built up solid expertise in individual

metering and have been recognized for this expertise in

France, with offi cial accreditation for Sade’s metering

department to manage meters for public authorities.

Based on this know-how, Veolia Water does its utmost to off er

its clients more-effi cient services and innovative information

management tools that enable them to control their

consumption. That is how remote meter-reading, a new-

generation service that continuously and from a distance

collects and transmits information from a water meter,

has become a reality in Metz, Deauville and Beaune.

In some cases, as in Paris, the fact that we had an excellent track-

record did not prevent the authorities from reverting to

municipal management of the water system. That’s just how

competition works, and, while some people are quick to forget

it, the same rules apply to competition between contracting to

private companies and management by the public sector. Be that

as it may, our teams did fantastic work there for 25 years, and

I wanted to call attention to that fact and thank them publicly.

Interview /

Veolia Water is thoroughly

equipped to help its clients reduce

their carbon footprint.


11

Another aspect of our mission is resource preservation. Veolia

Water has been innovative in monitoring and preserving

aquatic environments. We off er a complete range of services,

and that has won us many contracts, for example, the Gold

Coast project in Australia. Veolia Water began operating this

major desalination plant, built by Veolia Water Solutions &

Technologies (VWS), in 2009. The project includes a program

to protect the surrounding marine life. In the United States,

our commitment to helping public authorities deal with their

environmental problems has been singled out by the

National Council for Public-Private Partnerships, with an

award for our work—and research program—in connection

with our wastewater service contract in Milwaukee.

When it comes to coastal protection, the year of the Grenelle

Environment Forum on the Sea in France saw Veolia Water

continuing its work on ensuring bathing-water quality. Our

service, which informs our public-authority clients on

possible pollutants in real time, was enhanced. The city of

Pornic and the Dieppe-Maritime Metropolitan Area, with

which we partner, tested the service and were the fi rst

municipalities in France to obtain bathing water certifi cation.

This capacity for innovation is continuously tapped by Veolia

Water and its subsidiaries to satisfy their clients’ new needs

at all stages of all water cycles. That is our strength.

What do you think 2010 will bring?

The economic climate will probably remain diffi cult, but we

have what it takes to both improve the return on our industrial

clients’ investments and optimize the management of our

public-authority clients’ assets. With the pressure on water

resources, to make a diff erence, a company must be capable of

off ering services that minimize consumption of basic

resources—water and energy—and be able to contribute to

sustainable development. We have that capacity, and we will

prove it when we present our expertise at Expo 2010 Shanghai.

Veolia Water is thoroughly equipped to help its clients do their

share in combating climate change and reduce their carbon

footprint. Sade, for example, has come up with new solutions

for reducing environmental impacts and also conducts carbon

assessments of its projects. For its part, Veolia Water Solutions

& Technologies has embarked on a major project to optimize

the total cost of all greenhouse gas emissions for any particular

client. The project will be extended to cover all of Veolia Water.

As in previous years, our growth will continue to be based on

new and improved technologies and services, and fl exible

contracts. 2010 will therefore off er us fi ne opportunities to

demonstrate the eff ectiveness of our innovative, responsible

and supportive model.

Growth

in workforce

95,789

93,433

82,867

2007 2008 2009

Breakdown

of revenue

44.3%

55.7%

France

International


13

Our

fundamentals

14 / Locations worldwide

16 / Main subsidiaries

18 / Business activities

20 / Human resources

22 / Research & Development

24 / 2009 highlights



Our fundamentals /

Europe (excluding France)

France

Americas (including Proactiva)

Asia-Pacifi c

Africa – Middle East – India

Europe (excluding France)

France

Americas (including Proactiva)

Asia-Pacifi c

Africa – Middle East – India

28.6%

44.3 %

11.2%

7.4%

8.5%

8,412

8,675

19,164

30,483

29,055

Locations

in 66 countries

Breakdown of revenue

by geographic area

Breakdown of workforce

by geographic area2

1

3

4

7

8

9

6

5

Americas

1 Argentina

2 Brazil

3 Canada

4 Chile

5 Colombia

6 Ecuador

7 Mexico

8 United States

9 Venezuela

2

1

3

4

8

7

9

6

5

Africa,

Middle East,

India 10 Algeria

11 Benin

12 Burkina Faso

13 Côte d’Ivoire

14 Egypt

15 Gabon

16 India

17 Israel

18 Lebanon

19 Libya

20 Morocco

21 Namibia

22 Niger

23 Oman

24 Qatar

25 Senegal

26 Saudi Arabia

27 South Africa

28 Tunisia

29 United Arab Emirates


14

12

23

24

25

26

27

28

29

13

10

11

57 47

49

53

60

52

65

45

55

46

42

56

62

50

63

44

51

43

19

31

3234

33

3741

40

39

35

38

30

36

58

54

64

48

59

66

61

15

16

21

20

22

18

17

15

12

26

20

21

22

23

24

25

28

11

27

10

45 50

36

41

54

40

52

32

43

34

37

44

48

38

49

31

39

30

16

56

6358

57

6166

65

64

59

62

55

60

33

42

51

35

46

53

47

13

14

18

17

19

15

29

Europe

30 Armenia

31 Austria

32 Belgium

33 Czech Republic

34 Denmark

35 Finland

36 France

37 Germany

38 Hungary

39 Ireland

40 Italy

41 Monaco

42 Norway

43 Netherlands

44 Poland

45 Portugal

46 Romania

47 Russia

48 Serbia

49 Slovakia

50 Spain

51 Sweden

52 Switzerland

53 Turkey

54 United Kingdom

Asia, Pacifi c

55 Australia

56 China

57 Hong Kong

58 Japan

59 Malaysia

60 New Zealand

61 Philippines

62 Singapore

63 South Korea

64 Taiwan

65 Thailand

66 Vietnam



The world leader in water treatment, VWS is at the forefront of innovation. It specializes in engineering, turnkey design-build projects, and technological

solutions for public authorities and industrial companies.

VWS is the technical subsidiary of the water division of Veolia Environnement. VWS has built a unique portfolio of over 250 technologies combining

physico-chemical processes (Actifl o® Turbo, CEDI), biological processes (Biostyr™, AnoxKaldnes™, MBBR) and thermal processes (MED desalination, SOLIA™).

Backed by its 9557 employees and a decentralized organization with 130 business units worldwide, ensuring its fl exibility and responsiveness, VWS focuses

its resources on technological innovation and the development of new solutions thanks to its multidisciplinary expertise.

A partner of public authorities, VWS off ers them its expertise in the design and construction of wastewater treatment plants, sludge treatment facilities and

drinking water production plants, with a wide range of technological solutions and related services.

A partner of industrial companies, VWS off ers them its technological expertise in process water production and effl uent treatment and recycling, from standard

equipment to design and build of turnkey facilities. With the growing complexity of treatment processes, VWS’s solutions create value in such diverse industries as

food and beverages, petroleum products (upstream and downstream), mining, chemicals, pharmaceuticals, solar power, microelectronics, power generation,

steel and metallurgy, pulp and paper, and more. With the challenges posed by sustainable development, VWS innovates to help its clients limit their impacts

on the environment. In this perspective, the Veolia Water subsidiary has launched a major carbon initiative (see page 43) that will enable clients wanting to reduce

their greenhouse gas emissions to benefi t from its expertise.

Main subsidiaries

Our fundamentals /


9,557 employees

130 business units in 57 countries

250 proprietary technologies

VEOLIA WATER SOLUTIONS & TECHNOLOGIES (VWS)


17

Sade, Europe’s leading installer of water and wastewater networks, is consolidating its position as a leader in the design,

construction, rehabilitation and maintenance of networks and their associated facilities. With approximately 100 business

units in France and a presence in 20 countries, the subsidiary has an in-house design and engineering department

that enables it to respond reliably and creatively to the expectations of all its clients—public authorities, industrial

companies, individuals and parapublic organizations—regardless of the size of their project or their economic

and environmental requirements.

In 2009, Sade continued to expand in its traditional activities. Fully embracing the principles of sustainable development,

it conducts carbon assessments of its work sites and develops innovative techniques to minimize their eff ects on the

environment (ecological network connections, on-site recycling of excavated and surfacing materials, etc.) (see page 43).

Seeking new growth drivers, the subsidiary has also positioned itself in key sectors. For example, Sade Telecom has become

one of the major players in telecommunications networks and is basing its current growth on rolling out very-high-speed

networks and CCTV systems. Sade is also building a reputation in the renewable energy market, particularly

in infrastructure construction for wind farms, with over 50 wind turbine pads installed so far. It is already positioned

in the very specialized segments of waterproof membranes for landfi lls, wastewater treatment plants with reed-planted

beds, and stormwater and highway runoff storage tanks. It is among the standard-setters for installing well drilling

and is demonstrating its receptiveness to new markets with an unusual specialization—authorized caravan sites

for traveling people—and the deployment of original techniques, such as rope access work.

Veolia Water’s engineering and consultancy subsidiary

for international projects celebrated 50 years of worldwide

expertise in water and wastewater and environmental

management in 2009. It was a busy year: a hydraulic

model in Gabon, supervision of a wastewater project in Kenya,

feasibility studies on water and wastewater projects

in Tanzania, a water supply project in Ethiopia, improvement

of water network effi ciency in Morocco, creation of its fourth

subsidiary in Saudi Arabia, technical support in Bulgaria,

evaluation of water and wastewater infrastructure in Serbia,

a sea outfall in Azerbaijan, a study on drinking water supply

in Vietnam, and more. Seureca also developed its synergies

with Veolia Environnement’s other divisions, with a study

on district heating in Ukraine with Veolia Energy-Dalkia

and the preliminary design of a landfi ll in Morocco with

Veolia Environmental Services. In 2009, Seureca took up new

challenges and developed local partnerships, while ensuring

the safety of its employees in the four corners of the world.

Veolia Water’s engineering and consultancy subsidiary

for projects in France off ers public authorities and industrial

companies comprehensive services in consultancy and

assistance in decision-making in the fi elds of water,

wastewater and the environment. Its services cover technical

and economic studies; master plans; environmental impact

studies; preparation of administrative fi les required by

regulations; and assistance in implementing environmental

management and sustainable development programs.

In 2009, for example, Setude modeled the Garonne, Lot and

Ariège rivers, along with the Garonne canal, and then went

on to develop a tool for real-time prediction of pollution and

a system for odor prediction, for the SIAAP water authority.

Setude will celebrate 60 years of consulting in 2010.


9,000 employees

7,200 new projects started

in 2009

24,000 metric tons of CO2

equivalent avoided

3,000 km of pipes

installed

s

SADE SEURECA

SETUDE



Veolia Water manages the

water cycles with a focus on

saving water and protecting

resources

Our fundamentals / Business activities

Recharge aquifers

Produce and distribute

drinking water

Discharge treated wastewater into the environment

Manage raw water withdrawals


19

Provide desalinated water to cities and industry

Desalinate seawater

Recycle wastewater for industrial applications

Treat all types of wastewater

Treat wastewater sludge

Treat sludge for use in agriculture

Design and build state-of-the-art technology

Build and maintain networks



Rely on training

To be capable of delivering the performance levels expected

by clients and keep pace with the changing demands of

its businesses, Veolia Water relies on training, for which

it invested 2.38% of the payroll in 2009. Dispensed primarily

through the Campus Veolia Environnement network,

with the curricula of the individual sites adapted to local

needs, our training guarantees the same level of technical

expertise in all countries where we operate. In 2009, a new

training center dedicated to drinking water was opened

in Changzhou, China, to serve our employees in the

Asia-Pacifi c region. Veolia Water has also opted for work-study

programs as a way of preparing for the future.

In 2009, 605 young people were hired under these programs.

Skills to serve performance

Assessing training needs starts with human resources

planning, which is also geared to equipping employees

for career advancement and job mobility—both geographic

relocation and transfers between businesses—and to

becoming a lever for career management. Launched

in 2008, the human resources predictive management

plan is based on common standards developed in close

consultation with the business units.

To provide solutions that match the specifi c local situation of each of its clients, Veolia Water counts on the ever-growing professionalism of its personnel. Our emphasis is always on improving the quality of local services, developing the highest skills worldwide, and continuously prioritizing training, safety and diversity.

The program provides a genuine skills map that enables

our operation managers to optimize their organization

and identify talented employees. Deployment of the

program at Veolia Water and its subsidiaries continued

in 2009.

Promote a culture of occupational health and

safety

In 2009, workplace safety was again a priority for us and

an integral part of our continuous improvement process.

A workplace accident management tool was introduced,

a variety of training actions in promoting safety took place,

and safety audits were systematically conducted.

For several years, we have been taking a participatory

management approach to occupational health and safety

in close contact with trade unions and personnel

representatives. Once again, our safety record improved

in 2009. With the frequency of workplace accidents falling

50% in fi ve years, Veolia Water has become a benchmark

for safety in its fi elds of activity.

Labor relations

At Veolia Water, we are convinced that progress for the

entire company depends on good labor relations.

Our people’s expertise:

our core asset

Our fundamentals / Human resources


21

Welcome to the Changzhou drinking water training center The doors of the Changzhou drinking water technical training center offi cially opened in 2009.

The new Campus Veolia center will enhance the skills of our employees in China and the Asia-

Pacifi c region in all areas relating to drinking water. The approach is to replicate the real-life

work environment, so that employees can practice what they learn. Methods include plant

operation simulators, a treatment pilot unit and customer service training.

The center also serves two other functions as it is equipped with a test bench for water meters

and a materials-testing laboratory.

We therefore attach a great deal of importance to

constructive dialogue with trade unions and employee

representatives. In 2009, that approach resulted in the fi nal

deployment in France of the 2008 inter-subsidiary

agreement, whereby the approximately 15,000 employees

belonging to the Veolia Water-Générale des Eaux Economic

and Social Union benefi t from a common, harmonized set

of working conditions.

Diversity and the sharing of experiences

Veolia Water’s long history of operating in many countries

has fostered a culture of diversity within the company.

At the beginning of 2010, we took more-concrete action

against discrimination of any sort by signing a Diversity

Charter in France and launching an action plan on hiring,

training and career advancement. Talks began in 2009 on

renewing the Handicap et vie professionnelle (disabilities

and work) agreement, while the agreement on hiring people

55 years old and over was signed at the end of the year.

Convinced that diversity drives performance, Veolia Water

also encourages synergies and the sharing of experiences,

with, for example, a twinning program for its businesses

around the world.



Progress in the management and treatment

of water resources

In 2009, the Ripost® simulation tool was used for the fi rst

time in an industrial application to help with a case of

accidental river pollution. This tool helps forecast the extent

and duration of river pollution so that water intakes can

be protected and appropriate measures implemented.

The Regal project is designed to fi ght seawater intrusions in coastal aquifers used for drinking water supplies.

The aim is to prove that recharging aquifers with treated

municipal wastewater is both technically and economically

advantageous.

Our high-performance treatment process, nanofi ltration

with a very high conversion rate, is now operational.

Our R&D teams are also making progress on the Opaline®

range. These processes combine ultrafi ltration membranes

with an adsorbent (activated carbon) to remove

microorganisms and micropolluants like pesticides.

A new membrane is currently being developed for the

Opaline® C process.

Veolia Water is also working with the universities of Poitiers

in France and Brisbane in Australia on the production of recycled water by membrane treatment of wastewater.

Veolia Water’s R&D is the mainstay of its business, anticipating clients’ future problems and innovating daily to fi nd solutions. The water experts within Veolia Environnement’s network of 900 researchers and developers work on every stage of the water cycle and every type of process.

The objective is to develop processes that will minimize

both operating and investment costs.

Water quality traceability in the supply network is another

new service we are currently rolling out after completion

of work on the Smart Meter sensors. These low-cost sensors

provide real-time chlorine, pressure, temperature and

conductivity measurements and can be installed for dense

geographic network coverage. Thanks to this service clients

can be informed of accidental pollution and water quality

can be optimized at the distribution point.

Progress in wastewater treatment technologies

In municipal wastewater treatment, the Amonit® process

management tool enables energy savings of up to 50%

in the simultaneous nitrifi cation-denitrifi cation phases.

Industrial effl uents, which can be extremely variable in terms of their type, load and composition, must be

characterized and assessed in real time in order to prevent

toxicity problems resulting from biological treatment.

This is now possible, thanks to the completion of the fi rst

industrial on-line alert prototype, on which work started

in 2008. This device can also be used for municipal effl uents.

Work on saline industrial effl uents (such as leachates

Innovation is central to the

major challenges in water

Our fundamentals / Research & Development


23

at landfi lls), which are widespread and diffi cult to treat, has

culminated in a technological manual created in

conjunction with Veolia Environmental Services. This

manual lists all the operational and dimensional issues of

the various processes, thus enabling operators to optimize

treatments and VWS to devise the best-suited processes.

Limiting impacts and anticipating

the technologies of the future

Where health risks are concerned, accounting for parameters like the compounds that aff ect thyroid functions is now possible at a low cost thanks to Watchfrog,

which is enjoying its fi rst commercial successes.

Veolia Water also continues to take part in the Valoria

program for the treatment and recovery of organic

byproducts generated by wastewater treatment as part

of its work on the treatment plant of the future.

In 2009, we decided to build a test platform to try out new municipal wastewater treatment processes with a view

to the next “major technological leaps.” This test platform

will be unique worldwide and will be operational in 2011.

Global R&D water projects budget for 2009

including €12.8 million for drinking water

and €13.8 million for wastewater,

of which €5 million is for industrial effl uents.

110

projects in progress

25

patents registered

125

conference presentations

€55.1 million



2009 highlights

Our fundamentals /

The city of La Roche-sur-Yon has renewed its public service management

contract with Veolia Water, signing a 12-year

contract for its water and wastewater services.

The city asked us to support its sustainable

development drive by fi nding optimized

eco-friendly solutions that would enable it to

reduce the environmental footprint of its public

services. Veolia Water will use its expertise to focus

on major environmental issues like combating

climate change by reducing greenhouse gas

emissions, preserving water resources, developing

responsible water production and consumption

methods, and sustainably managing the city’s

technical assets.

ONEP, Morocco’s national water agency, awarded Sade the contract to supply water to the cities of Benguerir and Skhour Rhamna from the Al Massira reservoir. This entails 201,247 cubic meters of earthworks, the installation of 23,170 meters of cast iron mains and the construction of 129 manholes. Sade has been active in Morocco since 2002 and already has a good track record there following several water and wastewater projects in Khemisset, and the water supply network between Rabat and Casablanca in 2008 and in Agadir in 2009.

FRANCE MOROCCO

The fi rst advanced water recycling plant in the Western Corridor project, one of the world’s largest recycling

infrastructure projects, was completed

and its operation entrusted to Veolia Water.

In 2009, over 18,000 megaliters of recycled

water were supplied to the region’s two

largest electrical power plants, which

are now no longer dependent on local

reservoirs for their water supply.

AUSTRALIA


25

In 2009, Veolia Water

celebrated the anniversaries of several contracts: 15 years

of services to the public authorities of Ostritz/

Reichenbach, 15 years of partnership in

Döbeln-Oschatz (Saxony), 10 years in

Grimma-Geithain and 10 years of public-private

partnership with Berliner Wasserbetriebe.

GERMANY

SEEG, the Gabon Water and Electricity Company, which is 51% owned by Veolia Water, has set up two neighborhood services for customers with subscriptions to the Edan prepaid electricity meters. First, it established an extended network of approved partner traders in Libreville to complement the network of agencies. Second, customers can now recharge their electricity meters in any agency or sales outlet in the country.

GABON

The City of Gloucester, Massachusetts, and Veolia Water entered into a partnership to handle operations and maintenance of the city’s water and wastewater treatment facilities. Under the terms of this fi ve-year contract, Veolia Water will work with the city to improve drinking water quality and the infrastructure of the city’s water and wastewater treatment systems. The wastewater facilities will be upgraded in two phases with the replacement of the wastewater odor control system and improvements to heating and ventilation in the dewatering area. Veolia Water will also operate and maintain the city’s fi ve surface water reservoirs, including two plants dating back to the late 1960s.

UNITED STATES



Our fundamentals / 2009 highlights

CHINA

In Nice,

Veolia Water has installed hydroelectric microturbines on its water supply network. This system makes good use of the mountainous terrain to generate enough hydro power to meet the electricity needs of 400 households. In the long term it should generate the equivalent of the Nice light rail system’s electricity consumption.

In a fi rst for drinking water, the process deployed by Veolia Water at its Neuilly-sur-Marne/Noisy-le-Grand plant for the safe recycling of settling tank sludge in agricultural land application obtained the Qualicert certifi cation. This service certifi cation guarantees farmers a quality process with full traceability.

FRANCE

In 2003, Veolia Water signed a 50-year

contract in Shenzhen for water treatment,

supply networks and customer relations.

The scope of this contract has been extended

beyond the economic zone and now also

includes Bao’an and Longgang. In all,

Veolia Water now serves 7.61 million people

in the area with a daily production capacity

of 5,680,000 cubic meters.

The city of Nagpur awarded Veolia Water its fourth contract in two years. This rapidly expanding Indian city wants to increase its water supply facilities. After the Pench 1 and Kanhan plants, it asked Veolia Water to design, construct and operate for 10 years a new plant with a daily capacity of 115,000 cubic meters. The fourth and current project, which entails continuous water supply to 160,000 people in a pilot area, recently won the National Urban Water Award presented by the President of the Republic of India.

INDIA


27

BANGLADESH BRAZIL

In Goalmari,the pilot drinking water production plant designed to serve isolated rural communities in Bangladesh was inaugurated by Antoine Frérot and Muhammad Yunus, co-founders of Grameen Veolia Water Ltd. In this region, where most of the groundwater is naturally contaminated with arsenic, the plant will supply 40,000 people with water that meets WHO standards. Veolia Water signed a research partnership agreement with the ESSEC Paris business school’s Institute of Innovation and Social Entrepreneurship to analyze and develop this social business experiment in water.

The oil company Petrobras awarded

Veolia Water Solutions & Technologies,

under a joint venture with Enfi l, the design

and construction of a water treatment

and recycling unit at its Abreu e Lima refi nery.

This is the twelfth project awarded to VWS

by Petrobras.

ONEP awarded the consortium headed by Seureca, and also including engineering consultants Gauff (Germany) and CID (Morocco), the contract for research and supervision of work to improve the output of its water production and distribution system in fi ve cities in the Fes and Oujda regions. This 51-month project is funded by the KfW banking group.

MOROCCO


29

Our achievements

in 2009

30 / Water resource management

and protection

36 / Sustainable commitment to

clients and society

42 / Pushing back the boundaries

of our business



Water resource management and preservation

is our top priority

The principal way of reducing pressure on water resources is to combat wastage. To save water and thereby reduce freshwater

withdrawals, we have made reducing leakage from water supply networks one of our priorities and we are constantly

increasing our expertise in this area. In the EU’s fi rst 15 member

states, we have committed to maintaining an average network

effi ciency rate of over 80%. In 2009, in France, most new

(Royan, Chaumont) or renewed contracts (La Roche-sur-Yon)

now include innovative policies. These include investment

in the isolation of network sections and remote management

to monitor distributed volumes; use of remote meter reading

technologies through our subsidiary HomeRider; and leakage detection solutions (see Focus on page 31).

We also off er our clients services in the management of water supply network assets. First, we consult with the public

authorities in order to ascertain their investment choices and

performance objectives (network effi ciency levels, number of

service interruptions, etc.). Then, we use decision aids: a short-

term device designed to calculate the breakage risk of each of

the network’s pipes and a long-term device that simulates

investment programs so that performance targets can be met.

As an indispensable complement to these measures we are

also developing ways of raising consumer awareness of the

issues (see page 38).

Veolia Water manages all water cycles and in 2009 we off ered public authorities, industrial companies and consumers alike our expertise to address major concerns like reducing pressure on water resources, optimizing network effi ciency, ensuring the quality of water bodies and developing the use of alternative resources.

The ability to cater for the complex issues

faced by our clients

Our industrial clients also have to comply with environmental

regulations that require them to limit their water withdrawals

from natural resources. Veolia Water off ers solutions to ensure their water supply, combining productivity, energy savings

and reduction of water withdrawals. Given our personnel’s

technological expertise and professionalism we can provide

solutions for the most complex issues. For example, in China,

steelmaker Capital Steel chose us because we can provide

it with a supply of decarbonated water, thus reducing the

consumption of its cooling circuits (Actifl o Softening® Process).

We work with over 450 industrial companies and adapt to the specifi cities of each industry, for example the solar power

industry in France (see page 32). In Europe, the huge success

with clients in the oil and power industries of our Aquamove™

mobile emergency water treatment units in 2009 refl ects how

well our skills matched their requirements. This service by our

subsidiary Veolia Water Solutions & Technologies enables the

supply of the necessary quantity and quality of water on an

industrial site that cannot aff ord to halt its production line.

A partner for all wastewater projects

A large share of the world’s population has no access to a

wastewater collection or treatment system. The health

hazard this represents has lead to the mobilization of a

growing number of our public authority clients. We already

Water resource

management and protection

Our achievements /


31

Royan: Making network effi ciency our priorityThe city of Royan on the west coast of France awarded Veolia Water a 12-year contract for the

management of its water production and distribution service. The main objective is to optimize

the effi ciency of its aging network. Special devices (remote diagnostics, video inspection, leak

pre-location, etc.) will help detect system failures in real time and prompt the necessary repairs.

Veolia Water will install meters on municipal watering standpipes and supply public buildings

with remote meter readers and smartcard-activated standpipes for street cleaning requirements.

The contract includes calculating the water service’s carbon footprint and taking into account

biodiversity through the separate management of green areas at water production sites.

In addition, operations will be audited by an independent organization three times throughout

the duration of the contract and customer satisfaction surveys will be conducted every two years.

Combating leaksOver 20% of distributed water is lost

in the networks of many cities around

the world. We strive to reduce this

wastage, particularly by reducing leaks

from the network. In order to do so

we off er various techniques such as

on-location leakage detection through

acoustic correlation studies;

the measurement at diff erent times

of the day of the amount of water

introduced into the network, as well as

fl ow and pressure levels; detection

of abnormal fl ows; and the isolation

of network sections. This last measure

involves splitting the network up

into small sections so they can be

monitored more precisely

FOCUS



Solutions for

the solar power

industryVeolia Water and its subsidiary VWS

have worked together to design services

especially for the solar power industry.

VWS off ers a wide range of solutions

for clients in this sector, which is

characterized by rapidly evolving

technologies. Examples of solutions

include ultrapure water for the production

process, recovery of materials from

the effl uents, and assistance with

technological transformations.

Photowatt®, the industry pioneer

in France that supplies and installs

photovoltaic systems for installations

connected to the electricity grid, has

entrusted Veolia Water with the

management of its water cycle. Veolia

Water thus moved from an equipment

rental contract in 2006 to a full-fl edged

contract for ultrapure water supply and

effl uent management with a performance

guarantee agreement in 2009. Our

successful partnership with Photowatt®

refl ects our ability to meet the specifi c

requirements of this fast-growing sector.

provide wastewater services to over 68 million people

worldwide. In 2009, we confi rmed our position as world

leader in this market with contracts in Qatar, Japan and

the United States. In Europe, the framework directive,

which gives Member States until 2015 to restore the “good

ecological status” of their water bodies, encourages them

to increase measures to bring their wastewater systems

up to standard. As a result, Veolia Water, which already

treats the wastewater of 30 million people in, for example,

Belfast, The Hague, Prague and Budapest, was asked

to do so in Madrid, San Remo and Roquebrune-Cap-Martin

in 2009.

In rural areas, when the area is too small or diffi cult

to access, small-scale wastewater treatment systems are

an indispensable alternative to public facilities. Veolia

Water is investing in this fi eld and continues to enlarge

its range of services for clients in this specifi c market,

particularly in France where the law will gradually require

all private homes to ensure that their systems meet

the norms.

Industrial companies have to comply with equally strict

legislation and also have to manage increasingly complex

issues regarding the treatment of their effl uents. We are

committed to helping these companies limit their impact

on the environment. In particular, we off er a service

that detects hazardous substances in effl uents. We off er

Our achievements / Water resource management and protection

these clients, who are under increasing economic pressure,

solutions that help them to control their costs and, wherever

possible, to recycle. For example, in Brazil, VWS’ technical

know-how enabled us to forge trusting relations with

the national oil company Petrobras. In 2009, VWS won

a twelfth contract for the design and construction of a

water treatment and recycling unit for the oil company’s

Abreu e Lima refi nery, which will reuse about one-third

of the water consumed on the site. In a bid to cater for our

clients’ desire to “produce more with less,” we continue

to focus on an industrial ecology approach. For example,

VWS’ interest in improving carbon footprints has resulted

in a large-scale initiative and we off er a growing number

of innovations and schemes in energy saving and materials

recovery (see page 43).

Expertise in alternative resources

Recycling of treated wastewater is one way of securing

the water requirements of arid areas and improving

supply independence. Veolia Water off ers tried and tested technological solutions to produce water from effl uents

that is suitable for industrial purposes, agricultural

irrigation, recharging aquifers, watering of urban green

areas and even drinking water. Industrial companies are

aware that some of their water needs can be met with

recycled water, thereby avoiding the need to tap hard-to-

access water resources and allowing them to optimize their


33

entire water cycle. In countries like the Gulf States, where

recycling is a key part of their strategy to handle the scarcity

of water resources, we contribute our technological

expertise in the design and management of complex

systems. For example in Doha, Qatar, Veolia Water operates

two wastewater treatment plants that produce recycled

water, which is then used to water public gardens. Likewise,

in 2009, we started operating our fi rst water recycling

plant in Brisbane, Australia as part of the Western Corridor

project (see page 24).

Seawater desalination is a particularly promising source

given that 60% of the world’s population lives less than

60 km from the coast (Source: Cluster Maritime 2009)

and yet only 1% of drinking water is currently produced

using this process. With 15% of the world’s installed capacity, Veolia Water has become a benchmark in this fi eld,

particularly in dry coastal regions like Australia’s Gold Coast

(see page 35) or in the Sultanate of Oman where we started

operating a desalination plant in October 2009. Our

subsidiary VWS also contributes its technological expertise

in desalination to industrial companies in countries where

there is signifi cant pressure on water resources.

For example, VWS subsidiary Entropie will build two plants

for Alstom Power System in Shoaiaba, Saudi Arabia,

producing 3,560 cubic meters of distilled water a day.

In addition to this success, Veolia Water and VWS

constantly strive to improve the performance of their

Consolidated revenue

Networks/Engineering/Design-build

Operating contracts

€4.65 billion€7.9 billion

Full treatment of Sipchem’s Acetyl complex effl uentsIn Saudi Arabia, Saudi International Petrochemicals (Sipchem) awarded Veolia Water AMI (Africa,

Middle East, India) a fi ve-year contract for the operation of the effl uent treatment plant at its

petrochemical complex (Acetyl Complex) in Jubail. The plant is currently in operation and has

been designed to treat 21 diff erent fl ows via three units dedicated to sulfate removal, carbonate

removal and biodegradable organic removal, combined with sludge treatment.



From the installation of systems that monitor aquatic

environments to the development of green areas and

sensitivity analyses, we provide our clients with a

commitment to assessing and, if required, minimizing the environmental impacts of water and wastewater services. For example, when Sade’s well-drilling

department constructs a system to produce water,

it always takes into account all environmental parameters

in the catchment basin, analyzes the nearby and

immediate environment (subsoil vulnerability, protection

area required, etc.) and then takes responsibility for

rehabilitating the existing environment. In 2009, the

Regional Council of Reunion Island called on our expertise

in this fi eld for a Water Search Program designed to assess

the island’s raw and drinking water resources.

In our management contracts, the diff erentiated management of green areas, which is more respectful

of ecosystems, is included in our service for the sustainable

management of natural habitats. We work with local

associations to implement this form of management

on small areas like the catchment basins of Nevers and

Lyons in France, Milwaukee in the United States

or Braunschweig in Germany. The aim is to restore

the habitats in order to reap greater benefi t from

the ecosystem services they render as well as to raise stakeholder awareness of the need to protect biodiversity and the environment. For example, Veolia Water and the

French Golf Federation are launching a partnership

designed to promote biodiversity by developing alternative

maintenance methods and the reuse of treated

wastewater for irrigation.

Protecting diversity is also a key concern in the

management of the quality of coastal waters. For several

years now, we have been helping public authorities

anticipate regulations, particularly in Europe (Bathing

Water Directive), and set up their own systems to monitor

pollution sources and bathing water quality in both dry

and wet weather. These eff orts proved fruitful when

the urban community of Dieppe-Maritime and the towns

of Pornic and Perros-Guirec became the fi rst public

authorities in France to obtain “bathing water

certifi cation.” This facet of our know-how is valued

by tourist resorts the world over as they become

increasingly aware of how detrimental a decline in the

quality of their coastal waters could be to their image.

clients’ desalination processes, both in terms of their

impact on the environment and their consumption

of chemicals and energy. VWS, for example, is developing

new solutions in this area and in 2009 it purchased the

rights to commercialize a Zero Discharge Desalination

process that minimizes concentrate discharge into

the natural environment. Research into ways of further

reducing our plants’ energy consumption also continues;

we have already reduced the electricity consumption

of membrane desalination alone to 25% of what it was

in 1970.

Water withdrawals from underground aquifers often

largely exceed natural replenishment capacities. In areas

where water is scarce, recharging aquifers with treated water (surface water, stormwater, wastewater, etc.)

therefore represents an alternative solution to reduce the

gap between the demand and the available resources.

Veolia Water already uses this technique successfully

in more than 30 locations, including Adelaide, Berlin and

Barcelona, and we continue to advocate it in technical

recommendations compiled in 2009.

Protecting biodiversity

By their very nature, our activities have an impact on

ecosystems. That is why protecting biodiversity and

preserving our natural environment are major concerns for

our company.

Our achievements / Water resource management and protection


35

We have gone for many

years far beyond the

traditional operation of the

wastewater system and

the running of the

treatment plant.

Groundwater maintenance,

dam regulation to avoid

fl oods and operation of

draining and leaching fi elds

to supply agriculture with

water and nutrients are

also an integral part of

our activities as part of the

wastewater treatment

mission entrusted to

us by the city of

Braunschweig.

Once the wastewater has

been treated at the

treatment plant, it is

spread over a drainage

area, where it undergoes

biological fi ltration by

percolating through the

soil and being broken down

by microorganisms before

reaching the Oker River.

As a result of the

permanent supply of water,

even during periods

of drought or low water,

precious biotopes have

developed in the drainage

areas, a large portion

of which has now

been classifi ed as a nature

reserve.

A WORD FROM…

The Braunschweig

experience

Christine Mesek,

Manager of SE/BS

Stadtentwässerung Braunschweig

Gold Coast: Desalination ensures a lasting supply of waterThe largest desalination plant on the east coast of Australia was designed by VWS in partnership

with local companies. It has been operated by Veolia Water since February 2009 under a 10-year

contract. The plant produces 125,000 cubic meters of drinking water daily by reverse osmosis,

providing over 650,000 people in Brisbane’s suburbs with a climate-independent water supply.

This region has suff ered from prolonged drought and the project is a key component in the State

of Queensland’s strategy. The contract includes performance criteria and measures to protect

marine biodiversity.



Committed to quality of service

One of Veolia Water’s main priorities is to ensure we

provide a level of service quality that is just as good as the

quality of the water we distribute to our customers.

Regular customer satisfaction tracking provides us with

the information we need to adapt our services to their

demands.

In 2009, we continued to deploy the Customer Service Commitments “More than Water”. After France, the rest

of Europe and Asia are now on track in this area,

especially China with the Shenzhen contract (7.61 million

people served) and the Czech Republic, where the

customer service charters have been adapted to the local

context. The Philippines is another example, with the

Clark Water Company contract being one of the fi rst

to implement the charter after adapting it to the needs

of major industrial clients. Again with regard to our

commitment to continually improve the service delivered

to consumers, in France, Veolia Water joined with

the FP2E (professional federation of water companies),

the AMF (association of French mayors) and the ADCF

(the assembly of districts and communities of France)

to create Médiation de l’Eau (Water Mediator).

This independent, last-resort organization is tasked

with settling disputes between customers and water

utilities.

While the environment and water are now a major concern among the wider community, they have always been the prime focus of Veolia Water’s business. In 2009, our commitment was visible on all fronts, from the quality of customer service to raising people’s awareness of environmental issues, and ensuring access to water for all.

Sustainable commitment

to clients and society

Our achievements /

Listen

Because listening is fundamental when targeting

excellence in customer relations, Veolia Water relies on

customer satisfaction surveys as the basis for its action

plans. In 2009, as part of the promotion of the customer

culture within Veolia Water, a “mirror survey”

was performed on a sample of 3,000 employees and

6,000 customers in 11 countries. The results of this survey

were used to identify the diff erences in perception

and establish pathways toward their convergence.

Welcome and serve

At the same time, Veolia Water continued to upgrade its Customer Service Centers, especially in Saudi Arabia, where a

single call center and a new customer service center were

opened and three older centers upgraded. In Liuzhou, China,

the installation of a new information system adapted to the

particular country context resulted in a very signifi cant

improvement in customer relations’ management (see page 37).

Innovate

In addition to ensuring the availability and

professionalism of its teams, Veolia Water continually

introduces innovations to provide customers with the

means to control their water consumption.Providing customers with methods to view their precise


37

Remote meter reading: New-generation water consumption management Remote meter reading requires a meter fi tted with an electronic module that reads the data

either continuously or on demand. The data can then be transmitted daily by a radio signal

for real-time meter reading.

Daily meter readings are a radical change for both consumers and Veolia Water. Remote reading

provides consumers with a sense of security because of the new services it can provide:

immediate alerts in the event of a leak and tracking consumption on the Internet. The operator

is also able to monitor the volume distributed and sold on a daily basis. With this new detailed

data, operators are now in a position to improve the reliability of their invoicing.

Liuzhou in the

forefront of

customer

managementUnder the Veolia Water Customer Service

Charter, the 220,000 customers of this city

in southern China now have access to

improved management of their water

service: new invoice design, more detailed

reports, improved tracking of contacts and

responses, improved control of meter

reading and invoicing, etc. This progress

has been made possible by the use of the

Veolia Customer Management Software.

Throughout 2009, this solution was

tailored to fi t the size and the specifi c

requirements of the local context to allow

for the creation of thousands of new

connections, the management of new

payment methods, the issue of offi cial

invoices after payment and logging test

results on meter precision. The new

system is also used to manage individual

meters connected to a main meter. The

Liuzhou contract is Veolia Water’s fi rst to

experiment in using this solution fully for

customer management.



consumption and even to detect any leaks in their pipes

presupposes that their connection is fi tted with a metering

system. In the past 20 years, with the installation of

20 million meters in the communities it serves worldwide,

Veolia Water has acquired extensive expertise in this area.

In France, our laboratory in Nancy and the Meter

Department of our subsidiary Sade in Ivry have now both

been offi cially accredited to manage meters (French law

now requires public authorities to provide annual proof

that their meters comply with the applicable regulations).

Building on this expertise, Veolia Water continues to innovate

and provide increasingly eff ective services to its customers. In

2009, we made particular progress in the area of intelligent metering, including remote meter reading; this service has

been rolled out in France, for example in the cities of Metz,

Deauville and Beaune (see page 37).

Inform consumers about their water service

As well as these actions, consumer Web sites have been

improved with the addition of new content designed to help understand the water service better. For example, in France,

the “www.mafacturedeau.fr” site (in French only) includes

explanations about the water bill and entertaining videos

about water distribution, wastewater collection and

treatment, and the role of public authorities. Again in France,

Veolia Water introduced the “water carafe label” on the

Our achievements / Sustainable commitment to clients and society

www.serviceclient.veoliaeau.fr Web site (in French only).

With this new service, the company provides consumers in

7,000 communities with details about the mineral content of

their tap water along with practical advice for its correct use.

Boost awareness of the main water issues

In addition to the entirely practical information we provide

our clients and customers, as part of our role as the global

benchmark in water services, we also help boost awareness about the increasing scarcity of fresh water resources and about sustainable development. We have been implementing

action plans in these areas for several years. Examples include

in Central Europe, as a partner in the Biodiversity Home, and

in Morocco, with the “Classes Ecol’Eau” and “Ecolo’plage”

education programs for school children. We also regularly

organize open days for consumers in China, the Czech

Republic and other countries. In the Czech Republic, the “Tap

water? Just ask for it!” campaign to promote tap water has

been a resounding success. More than 150 restaurants in

Prague and Plzen now serve tap water in carafes bearing the

Veolia Water logo, the quality of which is endorsed by an

analysis certifi cate.

Committed to access to water for all

Veolia Water’s mission extends well beyond providing

water services. The company is committed to working

Committed to

performanceVeolia Water’s clients have ongoing

need for competitive services. To support

them over the long term, as well as to

demonstrate the quality of its expertise

and the advantages of public service

management contracts, the company

commits to meet performance targets.

The City of Riyadh, Saudi Arabia, clearly

understands the benefi ts. In 2009,

it extended the scope of the water

and wastewater contract it had signed

with Veolia Water a year earlier.

While retaining the same performance and

savings incentive system, Veolia Water will

now operate all the city’s wastewater

treatment plants, treating 700,000

cubic meters a day.

Similarly, the solutions provided by Veolia

Water clearly matched the expectations

of its steelmaker customer Industeel,

a subsidiary of the ArcelorMittal Group,

when it included performance and

continuous improvement commitments

and sharing of resulting savings in the

management contract for the cooling circuit

at the company’s Le Creusot site in France.


39

Bucharest: An exemplary contractIn 2000, the City of Bucharest, Romania, awarded Veolia Water’s subsidiary Apa Nova Bucuresti a

contract to upgrade and manage the city’s water and wastewater facilities. The two parties then

signed a 25-year contract based on achieving and maintaining 24 service level parameters.

In 10 years, our teams have worked with the municipality, focusing on network effi ciency, water

quality and customer service. Our daily commitment has enabled us to achieve excellent results:

20 of the service levels specifi ed in the contract have been met, while the remaining four are still

being assessed. As a result, a relationship based on trust has been formed with the municipality.

Against this backdrop, the two parties jointly committed to a contract renegotiation process.

This resulted in the signature of a rider regarding 11 essential points, including funding major

extensions to the water supply network and wastewater collection system for the period 2010 to

2016; the construction and operation of a new wastewater treatment plant to protect the

Danube Delta; the rehabilitation and operation of the principal wastewater collector; and the

replacement of 50,000 lead drinking water connections. Apa Nova Bucuresti has also committed

to creating a Water Solidarity Fund to which it will contribute €100,000 a year, to help the most

disadvantaged families pay their water bill. Negotiated on a win-win basis, the new contract

terms will enable Bucharest to reconcile the major investments it still needs to make to improve

its water services while maintaining one of the region’s most competitive water price structures.

The municipality of

Bucharest, as the owner of

Bucharest’s water and

wastewater infrastructure assets,

confi rms that the services provided by

Apa Nova Bucuresti are delivered in

accordance with the quality standards

and the legal requirements of the

Republic of Romania, it being

additionally stated that these standards

are entirely in line with European Union

standards and legislation.

Sorin Mircea Oprescu,

Mayor of Bucharest

2.3 millioninhabitants served,

€210 million invested in infrastructure over the past 9 years by Apa Nova Bucuresti,

network leakage reduced by over

100 million cubic meters,

power consumption reduced

by 30%.



92%Percentage of contracts Veolia Water successfully

renewed in France in 2009, a clear demonstration

of its clients’ satisfaction.

municipality and Veolia Water (see page 39).

In line with its commitment to the Millennium Development Goals, Veolia Water remains focused on ensuring access to

basic services for all. In this respect,

the company rises to the considerable expectations

of authorities that entrust their water services to us.

In Morocco, Gabon, Niger and India, from the start of our

contracts through to the end of 2009, we have provided

access to safe drinking water to more than 2.5 million more people and access to sanitation to an additional 1.2 million.

To achieve these goals, Veolia Water has developed

a specifi c service, called “ACCES,” that includes expertise

in all technical and fi nancial areas of its business along with

customer relations. ACCES has fi ve components: Adapt services, Capitalize on existing infrastructure, Create

innovative solutions, Evaluate the impact of

the programs implemented (see page 41), and Strengthen

consumer awareness about proper water usage.

Perform pilot experiments

Again within this context, Veolia Water is involved in testing new economic models to promote access to basic services,

with the aim of replicating them on a larger scale.

For example, in Goalmari, Bangladesh, we inaugurated the fi rst

drinking water production plant created under our social

business experiment with the Grameen Bank founded by

A fi rst in India: Continuous supply in urban areasIn 2005, Veolia Water signed a

performance contract with Karnataka

State aimed at providing continuous

(24/7) drinking water supply within

four years to a series of fi ve pilot areas

or “demo zones.” Until then, the

inhabitants of these areas had access

to running water only a few hours

a week at best.

The project, funded by the World Bank,

concerned 180,000 people in all types

of socioeconomic categories.

By optimizing operations, that is,

reducing water loss from 50% in 2005

to 12% today, installing individual

connections and meters for all

households, providing information to

consumers and boosting their awareness

of responsible consumption, the entire

population in the demo zones now has

permanent access to drinking water at

home. Given these results, Karnataka

State has decided to extend this scheme

to other districts and towns

Our achievements / Sustainable commitment to clients and society

in the public interest in order to contribute to developing

access to water for all. As a result, at Veolia Water,

we have included solidarity as one of our core values.

This includes during emergency situations. When storms,

earthquakes, extreme cold fronts, and other such events

occur our personnel demonstrate, either directly

or through Veoliaforce (Veolia Environnement’s emergency

humanitarian aid structure), their rapid response

to maintaining water service continuity. However,

Veolia Water’s solidarity with disadvantaged people does

not only come into play in times of exceptional events.

Working closely with public authorities, whenever

circumstances require, we include a social component in our services and strive to fi nd innovative solutions

to ensure that there are no interruptions to water supply.

For example, in France where the law recognizes the right

of each citizen to water, the company is a signatory of the

FSL (housing solidarity fund) agreements in 59 of France’s

administrative departments. In this context, we commit

in each signatory department to waive the debts of

individuals or families who struggle to pay their water bill

when they receive FSL support. In 2009, the water bills

of 22,000 families were written off , totaling more than

€1.5 million. In similar vein, in Bucharest, Romania,

the creation of a solidarity fund was included in a rider

to the concession contract negotiated between the

FOCUS


41

Subsidized connections in Morocco: Positive impact In Morocco, the subsidized

connection operations run for

the past few years by Veolia

Environnement Morocco have

enabled almost 60,000 low-income

families (totaling around 300,000

people) to be connected.

That represents almost half

the 120,000 families who were

not connected to the public water

distribution network in 2002.

The impact of this program was

assessed in 2009 by JPAL (Jameel

Poverty Action Lab), the social

laboratory of the Massachusetts

Institute of Technology (MIT).

The analysis, performed using

the scientifi c random testing

method developed by French

economist Esther Dufl o, revealed

the positive impact of these

subsidized connections on human

development, especially in terms

of the benefi ciaries’ social

integration and improved quality

of life. This result is particularly

important for the Moroccan

authorities, which introduced

a National Human Development

Initiative in 2005.

Professor Muhammad Yunus. In Bangladesh, most aquifers

are contaminated with arsenic at levels that are dangerous

for human health. The joint venture between Grameen Bank

and Veolia Water was set up to develop an alternative to this

situation by producing water compliant with World Health Organization standards in treatment plants and distributing

it through networks that will eventually serve 100,000 people

in fi ve villages. In accordance with the social business model,

the water is not free; Grameen Veolia Water Ltd sets the price

taking into account the people’s ability to pay and all the profi ts

are plowed back into the project. We have now reached the

stage where we need to improve the technical aspects of this

pilot scheme. To identify the keys to the operation’s success

and above all to be able to replicate it, Veolia Water signed

a research partnership agreement with the Institute of

Innovation and Social Entrepreneurship at French business

school ESSEC in early 2010. In Morocco, to extend the subsidized

water connection system (see box), Veolia Water is testing an

Output-Based Aid (OBA) program with the World Bank. Aimed

at improving the eff ectiveness of funding for development

initiatives, OBA is paid in the form of donations refl ecting the

progress made in connecting families to the public drinking

water networks and wastewater systems. At the end of 2009,

the progress rate for the OBA program in Tangier was 70%,

placing Veolia Water in the lead of the various operators

selected by the World Bank for the Morocco operation.



Taking up the energy challenge

All means of energy production require water and vice

versa. In the United States, a third of water withdrawals are

used to produce energy (source: US Department of Energy,

2006). For most clients, given the threat of climate change,

the aim today is to view the issues from an overarching

perspective and to manage the water/energy equation.

In this context, at Veolia Water, we are continuing to make progress in optimizing our energy production and consumption. Worldwide, we operate more than a hundred

anaerobic digesters treating wastewater sludge, a

signifi cant part of which can be harnessed to recover the

energy from the biogas. In western France, leading poultry

supplier LDC opted, when renewing its contract in 2009,

to recover the effl uent from its production line to produce

biogas. A cogeneration plant is now being built to produce

electricity and heat, which will be sold through

a partnership contract with EDF Energies Nouvelles.

In Madrid, Spain, the country’s largest wastewater

treatment plant, contracted to Veolia Water in 2009,

includes a sludge digester and an associated cogeneration

plant that will generate electricity and produce heat

(18,500 MWh of electricity per year, which is more than half

the plant’s annual consumption).

The global economic crisis and awareness of sustainable development challenges are giving rise to new customer expectations. In response, Veolia Water is leveraging its expertise and sense of innovation to push back the boundaries of its activity, while always seeking to reconcile human progress with the planet’s future.

Veolia Water is in the forefront of energy effi ciency

programs in Central Europe. Its subsidiaries in the Czech

Republic and Hungary continually share best practices

to extend the range of operating methods and the portfolio

of technology. For the Budapest, Hungary, contract,

they implemented the Ecrusor® system that recovers

biodegradable liquid after breaking down solid waste,

and signifi cantly boosts biogas production.

The experience acquired in cogeneration in Central Europe

has been key to pushing ahead and designing the energy self-suffi cient wastewater treatment plant. The aim is for

the plant to cover all its energy needs by consuming less,

using technologically optimal processes, like the Amonit™

process (see page 22), and by maximizing the production

of biogas. With regard to this latter point, a new two-step

sludge digestion process was patented in March 2009.

Currently at the industrial prototype stage, it should be

operational in 2010.

Contribute to reducing greenhouse gases

Analyzing their own sources of emissions in order to reduce

them has become a central issue for companies, which

will increasingly shift to the use of green technology.

Veolia Water has the resources to help them minimize their

Pushing back the boundaries

of our business

Our achievements /


43

carbon footprint. Several of our subsidiaries invested

in this area in 2009.

VWS, for example, has invested in a major “Carbon

Initiative” project (see box). To calculate precisely

the carbon footprint of the operational activities under the

Greater Lyons contract (France), Veolia Water created a tool

called EC’Eau™. It has shown that the production

and distribution of drinking water generates annual

emissions of 9 kilograms of CO2 equivalent per inhabitant

(i.e., 1/1000th of the annual emissions generated by each

person in France). The diagnosis also highlighted the areas

where reductions can be made. Veolia Water plans to deploy

this tool in all its facilities in France.

In another example, pre-empting new French legislation

that will require by 2011 all companies with more than

500 employees to report their annual carbon balance,

Sade has established a method and built a calculation tool

based on the “Carbone 6” proprietary software. It can

be used to express the amount of greenhouse gases (GHGs)

avoided by implementing alternative techniques that the

company has designed or developed to replace conventional

processes. Sade also continued to innovate in reducing the

environmental impact of its own activities: after the trenchless

micro-tunneling technique used, for example, for the Budapest

VWS and carbon effi ciency When VWS started its “Carbon Footprint”* project in 2009, it began by auditing the available

solutions in 14 of its entities, and then identifi ed the technological levers that would enable

them to reduce their footprint. The idea then emerged that VWS could apply this process at

its clients’ facilities and help them work out their “total carbon cost.”

Thanks to its expertise in the relevant technology, VWS has already selected the most suitable

processes to solve the issues confronting its industrial and public-authority clients. It can now

identify for them the solutions which, by emitting lower levels of GHGs in their operation cycle,

ultimately mean lower operating costs or fewer new costs associated with CO2 emissions.

VWS has already had the opportunity to leverage this expertise in the Rosny-Mantes Urban

District project (CAMY Authority, in the Parisian region). In a concern for sustainability, the local

authorities wanted to upgrade their wastewater treatment plant at Rosny-sur-Seine to mitigate

its environmental impact. In cooperation with Veolia Water who operates the plant, VWS found

the right solution to respond to CAMY’s expectations and won the contract.

Today, VWS is in a position to submit bids mainstreaming the appropriate solutions meeting

the carbon footprint concerns of any client.

* The carbon footprint is the sum of all direct and indirect GHG emissions attributable to an individual, organization,

activity or product.



contract, the company has developed the Recyclor™ process

to recycle on-site the road mix extracted from its work sites

into an immediately reusable backfi ll material.

Veolia Water is exploring other avenues for renewable

energy production at its sites. We have, for example,

installed hydraulic water turbines in Nice (France), Brussels

(Belgium) and in Australia. In Germany, our subsidiary

OEWA has patented a drinking water heat pump. Designed

for local public authorities and industry, this innovation

converts the calories in drinking water into a source of heat

or cooling. Veolia Water is also able to provide public

authorities with the possibility of recovering heat from their

wastewater. In France, the cities of Deauville and Nantes

(La Petite Californie plant) have adopted this solution.

Veolia Water is also exploring the possibilities off ered by solar and wind power. Sade is capitalizing on its civil

engineering works expertise to develop its business in the

construction of wind farm infrastructure. It has already

won two tenders from EDF Energies Nouvelles and a new

contract with Enercon.

Innovate but adapt to local contexts

Wherever Veolia Water is present, it carries out its core

business providing optimum solutions to its clients’ water

Milwaukee: From wastewater to research, an innovative partnershipWhen it signed the country’s largest wastewater service contract (population of 1.1 million)

at the very end of 2008 with the Milwaukee Metropolitan Sewerage District, Veolia Water included

the fi nance for a research program for the neighboring Great Lakes region scheduled to last

around 10 years. Working with two US universities, the company has already selected three initial

projects to study the growing presence of pharmaceutical pollutants in the aquifer, an issue

of increasing concern to the local population. The research projects will aim to:

– identify the compounds present in the storage tank and their potential removal in the

wastewater treatment process;

– improve the wastewater treatment processes to reduce the percentage of solid residue

and increase the availability of biogas; and

– understand better how chemical substances, such as phosphorus (the source of bad odors),

are transferred from a tank to a river.


45

problems. Whether in seeking fi nance, local partners

or new services, the company always focuses on establishing

innovative approaches adapted to specifi c local needs

and new expectations.

In the United States, Veolia Water’s ability to extend the

range of services it provides was a decisive factor when

the Milwaukee Metropolitan Sewerage District was looking

for a new company to manage its wastewater system,

serving around 1.1 million people. Constantly attuned

to its client’s needs, the Veolia Water teams assessed

the MMSD’s environmental concerns, especially aquifer

pollution. To provide this client with the best possible

service, we compiled a proposal, based on operational

excellence, that included fi nance for the R&D program

on this particular topic right from the start (see page 44).

In the Middle East and the Gulf countries, where

increasingly open markets and institutional reforms are

to be found, those countries that are prioritizing access

to water need to call on the expertise and technical

excellence of water professionals. In order to gain a foothold

more easily in these countries and work with them through

these changes, Veolia Water joins forces with leading local

partners who provide us with their local knowledge.

Currently, for example, Azaliya, the joint venture 51%-owned

by Veolia Water and 49% by Mubadala Development

Company (a sovereign fund owned by the Abu Dhabi

government), is backing the development of access to water

services in the Middle East and North Africa.

Lastly, in Germany, to adapt to the characteristics of the

local water market traditionally dominated by municipal

utilities, Veolia Water implements a tailored strategy.

In 2009, Veolia Wasser and BS Energy were selected by the

municipality of Pulheim to establish a local service company

to manage the city’s electricity and natural gas services

for the next 20 years. Although the contract does not involve

the management of water, Pulheim has decided to place

its trust in Veolia Water’s expertise in the area of public

service management contracts to help it create value over

the longer term by keeping costs as low as possible

for consumers.

Veolia Water’s subsidiaries have also developed experience

in incorporating services outside the scope of their core

activity, enabling them to win contracts, such as Seureca

in Ukraine (see Focus on page 45).

Track the emergence of new uses

To support its clients in all circumstances and ensure a

quality water service, Veolia Water must be able to identify

Pushing back water engineering boundaries in UkraineSeureca has acquired recognized expertise

in improving the fi nancial and operational

performance of municipal services

in Central and Eastern Europe to enable

them to meet the conditions set by

the EBRD for obtaining a loan.

These missions were initially centered

on water and wastewater services.

Since fall 2009, Seureca, with the support

of Veolia Energy-Dalkia, has been working

on a district heating network for the

municipal heating company in Odessa,

Ukraine. This nine-month assignment

involves auditing the service’s current

situation and recommending short-term

improvement actions enabling it

to honor its commitments to the EBRD

under the loan taken out to upgrade

the infrastructure

FOCUS



their future needs. This brings the company to review

the scope of its business at regular intervals. In Europe,

for example, in the past few years, there has been increasing

focus—with varying degrees of controversy depending

on the country—on the issue of rainwater harvesting for domestic or industrial uses. As a responsible operator,

Veolia Water is obliged to take a stance on this issue.

In France, where legislation now allows this practice

for certain applications, the company is seeking the best

way to reconcile the use of this alternative water resource

and public health issues. We have installed several units

for single dwellings and for apartment blocks.

It is often in helping clients deal with emerging issues or

to comply with increasingly stringent environmental

regulations that Veolia Water advances even further down

the path to innovation.

After having established its off er for identifying hazardous

substances in effl uent (see page 32), Veolia Water is now

assessing the solutions it may be able to present to

its clients to help them reduce the use of these same

substances in their processes or to treat them.

Additionally, we are examining the possibility of recovering

these substances effi ciently and cost-eff ectively,

through diff erential fl ow treatment.

Anticipate major changes

Looking further ahead to save resources, Veolia Water

and its subsidiaries pool their expertise to make progress

in industrial ecology. They focus on identifying tailored

solutions, especially materials recovery, an area where

widely varying and complex needs require a high level

of technical expertise.

Again looking to the future, Veolia Water is preparing

a revolutionary concept: the wastewater treatment plant

of the future. This major technological leap will see

the treatment plant turn into a bio-refi nery, capable

of recovering wastewater as a “raw material” for the

production of added-value products (see box page 47).

This new-generation plant is a link in the sustainable city

of the future that will include, right from its design phase,

environmental services (water, transportation, energy and

waste management). Veolia Environnement’s

Éco Environnement Ingénierie (2EI) consultancy

and environmental engineering fi rm is developing

this vision of the sustainable city as part of concrete

development projects. It relies on the expertise of

Veolia Water and the three other Veolia Environnement

divisions (see box page 46).

Our achievements / Pushing back the boundaries of our business

25,000 The number of employees worldwide involved

in Veolia Water’s Innovation and Continuous

Improvement approach. Almost 3,000 ideas

for improvements have been received.

Éco Environnement

Ingénierie Numerous projects for urban areas designed

to minimize their impact on the environment

have been developed in the past 15 years: the

BedZED ecological village (UK), the Vauban

District in Freiburg (Germany), Masdar City

planned for 2015 (Abu Dhabi), etc. Right from

their design stage, these model sites include

ambitious goals for local water management,

energy consumption and the ecological

footprint of housing and transportation.

Veolia Environnement’s Éco Environnement

Ingénierie (2EI) consultancy and engineering

fi rm specializing in sustainable urban

development was created to provide, through

partnerships with urban planners and

architects, solutions to sustainable urban

project developers. With the support of the

technical departments of Veolia

Environnement’s four divisions and R&D, 2EI

directs development projects toward an

economic and environmental optimum

incorporating local solutions (recycling

stormwater and surface runoff after

treatment, solar panels, pneumatic waste

collection, etc.), and solutions based on the

installation of public utility networks (water

management master plan, mass transit,

heating networks fi red by biomass, etc.). Since

its creation in 2009, 2EI has been awarded an

environmental and urban analysis contract

for the Esplanade mixed housing

development in Grenoble, France, and the

environmental assessment (with a major

section on modal shifts) for the creation of the

future Nice TGV high-speed rail multimodal

center (France).


47

The wastewater treatment plant of the future: Turning wastewater into a raw materialToday, a conventional wastewater

treatment plant (WWTP) “uses”

wastewater, energy and chemicals,

and “produces” treated water that

can be used for irrigation and

industrial applications, and waste

(sludge) that can be used, under certain

conditions, for farmland application.

In tomorrow’s WWTP, the fl ow

of wastewater, rich in organic and

mineral material, will become a plant

producing energy (CH4, H2 and ethanol

biofuels), organic and mineral

ingredients (fertilizers) and

biomaterials, such as PHA biopolymer,

which can be used to manufacture

bioplastics. This conversion of the

WWTP into a bio-refi nery will occur

in two stages: in the short term,

it will handle a concentrated fl ow

(treatment byproducts). By around

2020, the aim is to directly refi ne

the dilute fl ow of wastewater.

Veolia Water is also producing PHA

in its laboratories, and is now working

on developing industrial-scale

production.



North America

200 East Randolf Drive

Suite 7900

Chicago, Illinois 60601

USA

Tel.: + 1 312 552 2818

Fax: + 1 312 552 2864

Asia-Pacifi c

21/F AIG Tower

1 Connaught Road Central

Hong Kong

Tel.: + 852 2167 8206

Fax: + 852 2167 8101

Veolia Water Solutions & Technologies

“L’Aquarène”

1, place Montgolfi er

94417 Saint-Maurice Cedex

France

Tel.: + 33 1 45 11 55 55

Fax: + 33 1 45 11 55 00

www.veoliawater.com

Sade

28, rue de la Baume

75008 Paris

France

Tel.: + 33 1 53 75 99 11

Fax: + 33 1 53 75 99 02

Setude

Immeuble Clichy Pouchet

16, boulevard du Général-Leclerc

Bâtiment F, 8e étage

92115 Clichy Cedex

Tel.: + 33 1 41 40 00 30

Fax: + 33 1 41 40 00 31

Seureca

36, rue de Liège

75008 Paris

France

Tel.: + 33 1 45 72 92 92

Fax: + 33 1 45 72 92 93

France

52, rue d’Anjou

75384 Paris Cedex 08

France

Tel.: + 33 1 49 24 49 24

Fax: + 33 1 49 24 69 59

Europe

36-38, avenue Kléber

75116 Paris

France

Tel.: + 33 1 71 75 00 00

Fax: + 33 1 71 75 10 45

Africa/Middle East/India

52, rue d’Anjou

75384 Paris Cedex 08

France

Tel.: + 33 1 49 24 49 24

Fax: + 33 1 49 24 69 59


This document was produced by the Veolia Environnement Communications Department.

Photo credits: Veolia photo libraries: VWS, Sade, Veolia Water India, Christophe Majani d’Inguimbert, Manolo Mylonas,

Jean-François Pélégry, Alexis Duclos, Samuel Bigot/Andia, Martial Ruaud/Andia, Franck Perrogon/Andia, Richard Mas,

Olivier Culmann/Tendance Floue, Rodolphe Escher, Salah Benacer, VWS/Image’in/ R. Secco, VWS/Aquamove™ Mobile Water Solutions

Information graphics: Idé

Editorial oversight and coordination: Sylvaine Leriquier

Author: Marie-Laure Pierard English texts: ALTO International

Designed and produced by

Illustrations: Charlotte Leguay

To respect the environment,

this document was printed by

a printer holding the “Imprim’Vert®”

label using plant-based inks on FSC™

certified X-PER paper that holds

elemental-chlorine free (ECF), pH neutral,

and heavy metal absence guarantees,

and is made of fibers sourced from

well-managed forests.


Veolia Water

52, rue d’Anjou

75384 Paris Cedex, France

Tel.: +33 (0)1 49 24 49 24

www.veoliawater.com

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Business Overview 2009


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