The Vienna Water Engineering Department (MD 45), where a multitude of tasks had gathered up over time, also underwent such a comprehensive evaluation procedure in 2006. The outcome suggested that MD 45 should focus on its core competencies – water management planning, execution of legal regulations governing water (especially groundwater), expert advisory group to the city administration and clearance of drains – and outsource purely operational tasks in the process.

From a political viewpoint, however, the organisation of such vital tasks as flood control improvement or identification and rehabilitation of contaminated sites posing a risk to water should not exclusively be governed by profit. Not least in the interest of future generations, a structure was sought where reliability and quality of services would continue to be of utmost priority.

Another requirement was to cut red tape in work processes and build up financial reserves. The solution was to convert the MD 45 spin-off into a GmbH. The new enterprise employs 18 experts, 16 of which were previously MD 45 officials responsible for the aforementioned tasks. New incentives, especially in terms of organisation, came from outside through the new CEO Martin Jank, who had earned himself a reputation while working in the city’s healthcare sector.

Business with only one customer Since 1st January 2008, Wiener Gewässer Management GmbH has been offering its range of services to the Vienna City Council as its sole customer. Service contracts are mainly concluded with subordinate administrative groups – not only MD 45, but also the city’s waste management (MD 48) and real estate (MD 69) departments, the public transport authority and the power utilities Wien Energie Gasnetz GmbH.

While in theory the GmbH would also be entitled to sign service contracts with external customers, this is currently not an option, says Martin Jank. He explains that by turning down third-party contracts an enterprise can protect itself against ECJ judgements, such as the one that hit the German city of Halle (Teckal case).

Besides, it also looks like the European Commission has meanwhile become less critical of 100-percent public-sector subsidiaries. “Contracts are mainly concluded between the builder-owner (in our case e.g. a municipal department) and the enterprise in charge of project development and organisation (the GmbH)”, says Jank, arguing that the GmbH is therefore no additional competitor to private contractors.

“We are a service undertaking whose job is to organise necessary tasks and conduct tender procedures in keeping with the Public Procurement Law. A case in point is the flood control improvement project on the right banks of the Danube River in Vienna, which the city authorities carry out in keeping with an Article 15a agreement signed between federal and regional governments.

The example of contaminated site cleanup shows that we tackle our daily business mainly via modem and central computer. The GmbH is housed in the MD 45 building, where all data from contaminated site cleanup monitoring constantly flow together”, says Jank. From a financial viewpoint, projects are wound up by placement of offers and reimbursement for services rendered – without the possibility to back projects with additional money.

The GmbH operates on a full cost recovery basis, is obliged to submit statements and reports and has a Supervisory Board. The project volumes are mostly in the two-digit million range. Customers also put additional funding into ongoing operation of e.g. groundwater restoration facilities. Martin Jank sums it up: “The newly founded GmbH puts the Vienna City Council in a position to benefit from private-sector organisation also in environmental management while keeping responsibility firmly in its hands. The ‘b’ in GmbH, which usually stands for ‘beschränkt’ (limited liability) may therefore truly be construed as ‘begehrt’ (desired or value-added liability)!”

(Source: aqua press Int. 1/2008, Mag. Christof Hahn)