Socit du Canal de Provence

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Société du Canal de Provence

• Improved performance
• and sustainability a concern for irrigation
  systems in Provence, France

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Reference concepts

• The main objectives
• Improved performance sustainability
• How to achieve them
• Decentralized service delivery
• Market oriented development
• Water an economic good
• The user pays principle
• Participation of every stakeholders

3
A mix of institutional organizations in
Durance-Verdon Sub Basin
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• OVERVIEW
• of
• CANAL DE PROVENCE

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Société du Canal de Provence Structures built
operated (1)

• Total asset value
• 1.8 billion
• Tunnels 150 km
• Canals 120 km
• Conveyor pipes 580 km
• Reservoirs 73
• Pumping stations 79
• Distribution pipes 4,200 km for
• Irrigation networks
• 82,000 ha/ 5900 farmers
• 110 cities
• 400 industrial plants

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• INSTITUTIONAL ASPECTS
• SOCIETE DU CANAL DE PROVENCE (SCP)

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Société du Canal de Provence

• Regional Water Development and Management Company
  (1957)
• Public and private capital company
• SCP designs, builds and manages multipurpose
  hydraulic infrastructures
• (irrigation, industrial urban water uses)

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SCP GOVERNANCE
Shares ()
Board Memb.
Auditors
4 major share holders (PACA Region, Dépts Var
Bouches-du-Rh, Marseilles)
73
8
4
Other local governments (3 departements)
9
2
1
16
1
2
Financial institutions
Professionnal boards
2
1
1
-
-
SCPs Staff representatives
2
Government Oversight Veto
Ministry of the Interior
Control/Audit Ministries of Finance
and of Agriculture Technical advisors
Ministries of Agriculture, Public Works
Environment
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Art.1 of the Concession Act for 75 years

• Construction and management of
• The Main Canal System supplying the
  administrative units of Bouches du Rhône, Var
  and the City of Marseille.
• The necessary storages
• Hydraulic structures needed for regional
  economic development (when asked by local
  collectivities)
• Operation of structures transferred to SCP by
  their owners

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• Water service - an economic good
• SCPs balance of accounts

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Financing SCP Investments (2001)
Figures in M
ASSETS 818
GRANTS 415
LOANS 403
. Govt. 243 . Others 172
Already paid back 306
Remaining to pay back 97
GRANTS 23
Advances 89
SCP 194
. Govt. 17 . Share holders 72
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SCP Short / long term debt
en MEuros
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SCP Revenues from SCP works 1987 - 2001
en MEuros
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Evolution of operational charges

In value
In price structure
M
Total 31.71
100
8.0
6.2
1.97
1.7
6.99
22.0
23.6
Total 17.45
1.40
0.29
8.6
5.63
17.8
4.12
4.0
1.28
1.50
36.2
28.6
9.08
6.32
9.8
3.10
9.8
1.71
12,1
3.66
11.6
2.11
0
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Sustainability of the Balance

• Annual income ? 3 of asset actual value
• 2000 2038
• Out of which 50?loans -
• 10?renewal 60
• 40?OMM 40
• if steady income, sustainable
• Thanks to
• long life duration of main structures
• Multipurpose and evolving project

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• The user pays principle
• SCP

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Principles of the tariff system

• Long term Marginal cost tariff system
• The user pays for the costs that he generates
• Tariff classes cf distance, period, kind of
  use
• let decide cross-subsidies between users
• Equity, continuity and transparency
• Annual Fee AxQ BxV

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Long term marginal cost
Costs
Total utility
Total cost
Community Surplus
Consumers Surplus
Mean cost
Loss of service
Marginal cost
Quantities
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2001 SCP Water Sales (Concession)
Volumes (million m3) 169
Fees (million ) 51
Average price 0.30/m3)
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• Participation of
• SCPs Water Users

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Contracts with Customers

• Customers freely decide to sign or to resign
• They decide the maximum flow rate they need
• Water is available whenever they open the tap
• Guaranteed conditions of flow and pressure
• Two-factor tariff rules for price updating
• Rules for penalties, interruption if unpaid bills
• Dispute settlement clauses
• Eventually specific clauses (quality
  guaranteed, etc)

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SCP - WUAsboth
acting for public service in the general interest

• Multipurpose one purpose ( irrigation)
• Regional local
• freedom of user unrevocable involvement
• to contract or not
• instantaneous self service rotational delivery
• marginal cost on yearly average cost
• the long run
• steady tariff increasing cost of repair
• long run lack of maintenance
• maintenance policy need for professionnalism

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• Participation of
• Water Service Stakeholders

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The concerns of the stakeholders

• National Government
• Responsible for regulations, and final owner of
  the assets
• Asks for maintenance public service according
  to SCPs mandate looks after water management
  efficiency (gt85)
• Local Governments, shareholders
• Concerned by territorial development, and SCPs
  management.
• Ask for extension of the services, and for
  balance of accounts
• Economic interests/users representatives
• Banks look after SCPs financial management
  efficiency
• Users representatives look after extension and
  improvement of the services, and would like if
  possible lower tariffs
• SCPs staff
• Hopes to be sustainable and to get a return for
  its productivity

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Exemple of topic for the BoardWhat to do with
available funds ?

• Pay sustainable costs (0MMrenew), indeed, then
• Increase maintenance renewal (reduce risks)
• Invest to increase quality extend facilities
• Pay back the shareholders
• Lower the tariffs
• Increase the wages of SCPs staff
• Invest for other missions business
• Make provisions for future
• ???

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• Lessons learnt

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A policy consistant to constraints

• More constraints on natural resources
• More investments to overcome constraints

• More collective multipurpose interest
• Greater impact on territorial development
• More need for sustainability of the assets
• More need for operational performance
• More public authority to apply consistent
  policy

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Main findings from SCPs case

• Distinguish individual/collective
  responsibilities
• Distinguish asset management/service operation
• Consider the different horizons of the
  stakeholders
• Be aware of water value in situ total costs of
  service
• Cover  sustainable costs  to get sustainable
  service
• Make water pay for water all water, nothing but
  water
• Make every use contribute equitably to the
  expenditure
• Combine professionnal efficiency with general
  interest
• Develop private and public partnership with clear
  mandate
• Develop customer-supplier contractual
  relationship with users
• Pay sustainable attention to insure long-term
  maintenance