Veolia Water North America awarded $70 million California contract amendment

HOUSTON, Dec. 2, 2004 (BUSINESS WIRE) -- Eager to stabilize its costs and ensure environmental compliance, the city of Richmond, Calif., voted overwhelmingly to expand its wastewater services contract with Veolia Water North America Operating Services LLC to include collection system services.

The 18-year agreement, valued at approximately $70 million, calls for Veolia Water to manage the city-owned collection and stormwater systems, which includes approximately 285 miles of lines, 14 lift stations, 5,200 manholes and 3,300 catch basins. Additionally, the company will manage a $17 million city bond-funded capital improvements program. As part of its service, Veolia Water will inspect and clean main lines and manholes, repair and maintain lift stations, and provide customer service. Veolia Water will also tie the collection system into its automated controls at the wastewater plant.

The city's decision amends its two-year-old, 20-year wastewater treatment services partnership with Veolia Water for the operation of and critical upgrades to the city's wastewater treatment facility. In 2002, Veolia Water was charged with quickly improving environmental compliance and odor control at the wastewater treatment facility - a task the company successfully completed ahead of schedule and on budget.

"When the city entered into a contract with Veolia Water to operate our wastewater treatment plant, many were skeptical that they would perform to the level they promised," said Richmond Mayor Irma Anderson. "I'm pleased to say that they have performed so well that the City Council had the confidence to award them a contract to operate the collection system. Under this contract, Veolia Water will work with Richmond to start us down the road toward an improved collection system, just like they did with the treatment plant."

Like the city's wastewater treatment facility in 2002, the collection system needs improved operations, maintenance and a significant capital investment to bring it to industry standards and into regulatory compliance. Currently, it suffers from significant inflow and infiltration problems that contribute to overloading of the wastewater plant, particularly during winter storms.

"Veolia Water, with its rich 150-year global history of providing water and wastewater services, provides complete services to millions of people daily," said Chibby Alloway, vice president of Veolia Water North America's Western Business Center. "We serve communities large and small - managing large wastewater systems such as in Richmond and complete water systems such as in Indianapolis. In Richmond, we started out managing its wastewater treatment plant, and after exceptional performance, the city quickly realized the benefit of partnering. We are happy to expand our service to better serve the Richmond community."

Benefits the city will realize from this expanded partnership include ensured regulatory compliance, the transfer of risk, a long-term budget with guaranteed costs and efficiencies in staffing and systems through integration of the wastewater and collection system operations.

Veolia Water North America Operating Services LLC, formerly known as USFilter Operating Services, provides water and wastewater services to approximately 600 communities across North America. The company manages nearly 4,000 miles of sewer lines and 1,300 lift stations.

Veolia Water North America (www.veoliawaterna.com) is the leading provider of comprehensive water and wastewater services to municipal and industrial customers, providing services to approximately 14 million people in more than 600 communities. The company is part of Veolia Water, the No. 1 water company in the world, serving more than 110 million customers. Veolia Water is the Water Division of Veolia Environment, the largest environmental services company in the world with over 310,000 employees in about 80 countries and annual revenues of more than $36 billion.

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