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German Case Studies Overview German water sector background Decision-making in German water sector

German Case Studies Overview German water sector background Decision-making in German water sector Key decisions in the past 15 years Munich Berlin. German water sector background. Municipal structure and management Emphasis on elevated service standards

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German Case Studies Overview German water sector background Decision-making in German water sector

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  1. Watertime Final Workshop University of Greenwich 25 November 2005 German Case Studies Overview • German water sector background • Decision-making in German water sector • Key decisions in the past 15 years • Munich • Berlin

  2. Watertime Final Workshop University of Greenwich 25 November 2005 German water sector background • Municipal structure and management • Emphasis on elevated service standards • safety, drinking water quality, reliability • Public nature of services taken for granted • absence of legal standards on service quality • Increased commerciality raises questions • lack of service definition and regulation

  3. Watertime Final Workshop University of Greenwich 25 November 2005 Water decision-making in Germany • Traditionally, mainly engineers at work • Municipalities involved in finances • Self-regulating sector with ambitious goals • A ‘secret service’: few public information, resistance to more public participation

  4. Watertime Final Workshop University of Greenwich 25 November 2005 Key decisions in the past 15 years • Two main elements • difficulties with municipal finances • climate to liberalise, invite private involvement • Internal discourse changed markedly • from supply, quality, environmental issues, to • competition, cost efficiency, benchmarking • Public expectation to maintain standards • Source protection, water quality, stable price

  5. Watertime Final Workshop University of Greenwich 25 November 2005 Case Study Munich - episodes • Both episodes reflect standard patterns • attempt by Stadtwerke München (municipal multi-utility) to take over municipally operated wastewater unit • cross-border leasing of wastewater assets • Non-public nature of plans main element • by making the plans public, the employees’ representatives changed the political climate • As a result, politicians dropped both issues

  6. Watertime Final Workshop University of Greenwich 25 November 2005 Munich - actors & factors • No private actors involved, but Stadtwerke München with marked commercial attitude • Wastewater undertaking’s employees were supported by public service union • Final decision with parliament and mayor • The press picked the issues up, public opinion in favour of maintaining status quo

  7. Watertime Final Workshop University of Greenwich 25 November 2005 Munich - conclusions • Very stable situation politically in Munich and Bavaria, general agreement to keep water in public ownership and operation • Secrecy of water sector continued problem • Stadtwerke München’s commercial attitude: recent un-bundling of water supply • three units: production, distribution, sales • Public increasingly important factor • NGO ‘Water Alliance’ monitoring development

  8. Watertime Final Workshop University of Greenwich 25 November 2005 Case Study Berlin – Episode 1 • 1999: part-privatisation of water company • RWE/Véolia 49.9 %, city of Berlin 50.1 % • 5 year political process leading to decision • Complex, secretive, no public information • even parliament vote w/o full information • Consultants played a very influential role • 8 financial and/or legal consultants identified

  9. Watertime Final Workshop University of Greenwich 25 November 2005 Case Study Berlin - actors & factors • Politics focussed on privatisation revenue • main public argument being financial crisis in Berlin ( strict necessity to privatise BWB) • process started with publication of revenue fig. • Private companies stayed in background, but had access to consultants involved • 7 multinationals involved in bidding • Unions strongly opposed, but appeased by 15 year employment guarantee

  10. Watertime Final Workshop University of Greenwich 25 November 2005 Case Study Berlin – Episode 2 • Post-privatisation development 1999-2004 • City formally in control due to 50.1% share • yet regulation limited by investment threshold • instead negotiations of senate and investors • Investors collect almost all the profits • due to contract, RWE/Véolia served first • Pronounced price increases to continue

  11. Watertime Final Workshop University of Greenwich 25 November 2005 Case Study Berlin - conclusions • Flawed and hasty decision-making process created long-term problems • Secrecy prevailed before and after 1999 • Public participation virtually impossible • Up to present: no justification of price rises • Contracts created governance problems • partial dis-empowerment of authorities • severe under-investment in infrastructure

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