1. German Case Studies Overview
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. German water sector background
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. Water decision-making in Germany
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. Key decisions in the past 15 years
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. Case Study Munich - episodes
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. Munich - actors & factors
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. Case Study Berlin – Episode 1
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. Case Study Berlin - actors & factors
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. Case Study Berlin – Episode 2
Watertime Final Workshop University of Greenwich 25 November 2005
Case Study Berlin – Episode 2
Post-privatisation development
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. Case Study Berlin - conclusions
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