Veolia eyes massive water contract

May 18, 2010

, PARIS, May 18 – French municipal services giant Veolia Environnement was on track Tuesday to be the only bidder for a huge water supply contract after rival Suez Environnement was ruled out.

Suez Environnement said it had been informed by the Ile-de-France authorities in the region around Paris that it was no longer in the running for the contract.

The company said it was awaiting clarification of the reasons behind the decision.

Veolia Environnement declined to comment on the matter.

A spokesman for the regional water authorities insisted, however, that "the choice will only be made on June 24," declining to confirm that Suez Environnement had been dropped.

"There is a proceedure to follow and the decision will be made by the elected officials (on the local water boards) and only by the elected officials," the spokesman said.

The deal has got caught up in political wrangling in the richest and most densely populated part of France as the contract, worth 371 million euros (460 million dollars) annually under its current terms, comes up for renewal at the end of this year.

Veolia is the successor company of Generale des Eaux which has held the contract since 1923 and rival groups bidding for the new deal have complained that it thereby had an unfair advantage.

The Ile-de-France contract has taken on greater importance still as supply deals for other major cities and regions such as Marseille, Lille and Versailles near Paris come up for renewal in the near future.

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