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DISCOVER MORE about the press release:

“Veolia Water selected by Thames Water to upgrade its water infrastructure.”

www.veolia-newsroom.com

May 2013 ) Veolia Environnement, Veolia Water Communications Department


FAQ 1. What does the contract cover? 2. How is the contract split between the different companies? 3. What is the total amount of the contract? 4. What is Veolia Water’s existing presence in the UK? 5. Thames Water key facts? 6. Why an alliance model? 7. UK regulated water industry

www.veolia-newsroom.com

May 2013 ) Veolia Environnement, Veolia Water Communications Department

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FAQ 1. What does the contract cover? Thames Water, which serves almost a quarter of the UK’s population, has chosen two consortia to deliver a significant proportion of its 2015–2020 essential upgrades to water pipes, treatment facilities and sewers across the capital. The work will be undertaken between 2015 and 2020, with an option to extend the contract for another five years. Under a new alliance model, Thames Water has brought together two design-and-build consortia, a program manager and a technology and innovation provider.

2. How is the contract split between the different companies? The client, Thames Water, has initiated an alliance model made up of two design-and-build consortia, a program manager and a technology and innovation provider. a) The organizations selected are: — Design and build: > Costain, Veolia Water, Atkins (CVA) > Skanska, MWH, Balfour Beatty (SMB) — Program Manager: MWH — Technology and Innovation Provider: IBM b) The work is phased: — Phase 1 (2013–2015): Planning and mobilization. Early contractor involvement in planning and preparation for AMP6 determination to OFWAT. —  Phase 2 (2015–2020, +5-year extension option): Delivery; program of upgrades to water pipes, treatment facilities and sewers.

3. What is the total amount of the contract? The total value of the client program, to be shared with all alliance partners, is £2.5–3 billion. This amount is likely to increase, but is currently already the largest capex management contract in Europe in the water and wastewater sector.

4. What is Veolia Water’s existing presence in the UK? — Our combined business interest turnover, including joint ventures, is more than £400m per year —  90% of our turnover is achieved through long-term operating contracts — We operate in more than 100 locations throughout the UK and Ireland — More than 1,000 people work for Veolia Water in the UK and Ireland, either directly or through joint venture partnerships

www.veolia-newsroom.com

May 2013 ) Veolia Environnement, Veolia Water Communications Department

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FAQ 5. Thames Water key facts? Business — UK’s largest water and wastewater services provider — 4,500 employees Kemble Water Limited, a consortium of institutional investors managed by the Macquarie Capital Funds (Europe) Limited, acquired Thames Water on December 1, 2006. Drinking water services — 9 million clean water customers in London and the Thames Valley — An average of 2,600 million liters of drinking water supplied per day — 100 water treatment works, 30 raw water reservoirs, 288 pumping stations and 235 clean water service reservoirs — Tap water costs less than a tenth of a penny per liter — Drinking water quality meets 99.97% of stringent tests — Half a million drinking water quality tests undertaken each year Sewerage services — 14 million wastewater customers — 350 sewage works treating an average of more than 4 billion liters per day — 157,600 kilometers of sewers, 2,530 pumping stations and 1.2 million manholes — Two sludge-powered generators and 19 combined heat and power plants generating 187 GWh of renewable electricity — All wastewater treatment facilities are currently operating within Environment Agency compliance guidelines

6. Why an alliance model? The alliance model represents a new stage in client–contractor relationships. It brings together the best possible combination of partners to work as one team and represents a complete transformation in the way investment is made by ensuring that all parties take a longterm view, focusing on delivering value, as opposed to just cost-efficiency. This is further enhanced through a benefit and cost-sharing mechanism which facilitates a balance of risk and reward. In this case, the alliance has been formed early in the project, two years before the start of the next five-year regulatory period, so that the team can deliver the safest, most sustainable and most innovative solutions. It will begin work immediately on planning to meet the challenges of the AMP6 work program.

7. UK regulated water industry When the water and sewerage industry was privatized in 1989 an economic regulatory frame work was put in place. The companies that form part of this framework hold a license to provide services to the public—this group of companies is known as the regulated water industry. Ofwat (the Water Services Regulation Authority) is the body responsible for the economic regulation of the water and sewerage industry in England and Wales. It is primarily responsible for setting limits on the prices charged for water and sewerage services (this is known as the price review), taking into account proposed capital investment schemes (such as building new wastewater treatment works) and expected operational efficiency gains. The most recent review was carried out in 2009; reviews are carried out every five years, and the next will take place in 2014. www.veolia-newsroom.com

May 2013 ) Veolia Environnement, Veolia Water Communications Department

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MAP Location Irish Sea

UNITED KINGDOM

North Sea

Thames Valley Birmingham

Norwich Cambridge

Moreton

London

Oxford Cardiff

Swindon

Aylesbury Reading

Th am es

Guildford Exeter

50 km

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Sevenoaks

English Channel

May 2013 ) Veolia Environnement, Veolia Water Communications Department

FRANCE

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Infographic Illustration

www.veolia-newsroom.com

May 2013 ) Veolia Environnement, Veolia Water Communications Department

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