Sofia Water Concession, Bulgaria
In 2000, a 25-year water concession for the Bulgarian capital, Sofia, was awarded to Sofiyska Voda, which was at that time owned by the UK’s United Utilities, and International Water Ltd, in turn owned by Bechtel Enterprises Holdings Inc from the US, and the Italian Edison SpA.
In spite of heavy support from the European Bank for Reconstruction and Development (see box below), which claims to improve corporate governance and raise standards in the projects in which it participates, in 2009, the most recent year for which figures could be found, water losses were still at 58 percent (pdf) and most people in Sofia consider the water undrinkable.
Since then, in 2010, 77.1 percent of the shares have been bought by French giant Veolia, another company heavily supported by multilateral development banks including the EBRD (pdf). The other 22.9 percent of the shares are owned by Sofia Municipality. It remains to be seen whether Veolia will bring any improvements compared to United Utilities.
EBRD support for Sofia Water
In December 2000 the European Bank for Reconstruction and Development (EBRD) signed a EUR 31 million loan to Sofiyska Voda to support its expenditure programme for the first five years of the concession, including start-up costs, rehabilitation of the water and sewerage networks to reduce leakage and infiltration and improvements to the quality of the services provided to 1.2 million people living in Sofia.
In 2003 the bank purchased shares in United Utilities Europe, a subsidiary of United Utilities, allowing the company to purchase shares in Sofiyska Voda, AS Tallinna Vesi in Estonia and Przedsiebiorstwo Komunalne Aqua Bielsko-Biala S.A in Poland – from International Water Ltd.
failure to make sufficient investments