PPP Water Infrastructure Operation Project in the Turnov and Semily region successfully launched

VHS Turnov selected the operator for water infrastructure in the region

On 31 August 2010, the chairman of Vohodospodářské sdružení Turnov (Water Utilization Association Turnov (VHS Turnov)) and the company Severočeské vodovody a kanalizace a.s. (North Bohemian Water Supply and Sewerage/ScVK), member of Veolia Water Czech Republic group, signed the concession contract for the operation of water and waste water infrastructure in the Turnov and Semily region. The concession contract has been entered into for a period of ten years and should result in a considerably higher quality of services rendered to the inhabitants of these regions without any material impact on water and waste water tariffs. The old-new operator will operate and maintenance assets amounting to more than one billion Czech crowns; the sales revenues from the water and waste water tariffs within the contractual period of ten years will amount to more than two billion Czech crowns.
"This contract represents the accomplishment of intense work performed by VHS Turnov, by the advisory consortium consisting of company FACILITY, law firm WOLF THEISS and company Vodohospodářský rozvoj a výstavba a.s. (Water Utilization Development and Construction/VRV) and the State Environmental Fund of the Czech Republic (SFZP CR), liaised closely during one and half year preparatory and realization work on this PPP Project, due to which we found a credible partner for provision of water supplies for our municipalities,” Milan Hejduk, chairman of VHS Turnov, said.
In the course of the concession procedure VHS Turnov received three bids. "A sufficient number of bidders and the appropriate demand risk spreading between VHS Turnov and the operator reflected by the bid – these were the key factors for a comprehensively advantageous concession contract,“ Jan Kincl, head of the consortium from the advisory company FACILITY, said. "The concession procedure for the selection of provider of these services and the concession contract itself represent an innovation of essential importance in our legal environment," Lenka Krutáková, WOLF THEISS attorney-at-law, added.
The State Environmental Fund of the Czech Republic (SFZP CZ) granted VHS Turnov subsidies for the investment and renewal of the water infrastructure within the program "Čistá Jizera". SFZP CZ therefore supervised both the preparatory works and the concession procedure for selecting the concessionaire. By signing the concession contract, the first concession procedure for selecting an operator for water and waste water infrastructure, combined with subsidies of this dimension, was accomplished. "A lower water and waste water tariffs for end consumers, a higher standard of services, transparent prices, sufficient resources for renewal of infrastructure, competition for the best bid - these are the crucial effects of the tender just finished. The project is a practical demonstration of the fact that the results described above may be achieved when the requirements of the Operation Program ´Environment´ are applied,“ Lenka Brandtová, spokesperson of the SFZP CZ, said. The concession contract was also approved by the Ministry of Finance.

Vohodospodářské sdružení Turnov (VHS Turnov) is a voluntary municipalities association that administers water utilization assets for 22 municipalities in Northern Bohemia.

Severočeské vodovody a kanalizace a.s. is the second-largest provider of water infrastructure services in the Czech Republic.

FACILITY is a Czech advisory firm rendering management and transactions consulting, assets assessment and further services provided by expert institutes. Its most important customers are besides the state sector the top energy, bank and telecommunication companies. FACILITY is one of the upfront PPP consultancy companies in Central Europe.

WOLF THEISS is one of the leading European law firms in Central and Eastern Europe with a focus on international business law and consultancy in the field of public tenders and concessions rendering services both to contracting entities and suppliers as well as banks. Combining law and business, WOLF THEISS develops comprehensive and constructive solutions on the basis of legal, fiscal and business know-how. In this year WOLF THEISS has been awarded ‘Best Law Firm of the Year in the Czech Republic’ by the International Financial Law Review.

Vodohospodářský rozvoj a výstavba a.s. (VRV) is a Czech company rendering a large scale of consultancy services not only in the field of water utilization infrastructure. It also provides geodetic services, technical and security supervision for water works and a great many project activities including project studies, implementation projects, water infrastructure planning etc.