API: After the AQUASSIST success, which is partly owed to your predecessor Klaus Brenner, Veolia Wasser GmbH largely disappeared from the Austrian scene. Brenner left the group shortly thereafter, and except for AQUASSIST, the subsidiary which Veolia jointly runs with the public utility of Klagenfurt, and process water specialist Veolia Water Solutions & Technologies, Veolia was away from Austria for two years. Why has it returned now?
Höfinger: Veolia Wasser was not idle during that period. From its base in Germany, the company began to analyse the Austrian market and identified new municipal and industrial sector opportunities, which we now seek to pursue with even more commitment.
API: Let us take a look at the municipal sector. Without doubt, the former water utilities run by local or regional authorities now have a better standing than two years ago. Through their customised services they have in many parts become established as regional (and partly even international) players. They are able to offer a wide range of services to local communities – water, sewage, power, TV, etc. What can Veolia do to stay competitive?
Höfinger: We believe that not all communities are pleased with the regional near-monopoly in the supply sector. Dependencies can best be avoided by splitting the purchase of infrastructure services. I am moreover convinced that with more than 100 years’ experience and the synergies of a global group, Veolia itself can boast enough attractive offers.
API: This naturally also includes Public- Private Partnerships (PPP) in water management. In comparison with Hungary or the Czech Republic, Austria can demonstrate very few practical examples in this field. Not even efforts of mainly Austrian competitors have helped to change this. A recent example is the town of Zistersdorf (Lower Austria), where rumour has it that the ones to draw the greatest benefit from the tender were the supervising attorney and the local authorities. Will Veolia also go to such lengths when it strives for success?
Höfinger: This is definitely not our approach! We from Veolia have always stressed that “a euro can only be spent once”, which means that a project also needs to be economically viable.
API: After the stock exchange crisis and the evident economic downturn, the “more private, less public” approach no longer seems to work in the real economy. Do you feel such a trend in connection with the development of PPP projects for local communities? After all, mayors are also flesh-and-blood human beings who have feelings and they tend to respond to the public voice.
Höfinger: I personally cannot share the view that due to the banking crisis (which it is in the first place) private partners are no longer welcome in the water sector. The nationalisation of “Kommunalkredit”, which is a bank specialising in infrastructure projects, implies to us that investments are just as safe as they were before. The federal government has expressed its intention to prioritise infrastructure projects because of the looming economic slump, and Veolia Wasser regards this as a very positive signal.
We moreover must not forget, that the water infrastructure in many Austrian communities badly needs upgrading, regardless of any financial plights and banking crises. And the EU will not stop producing directives with which it seeks to boost the quality of water resources and urban water management services. Many mayors and senior officials will have to find new ways out of the dilemma!
Public officials also have feelings and need to work with and at the service of people who may be “privatisationaverse”. However, fears may also be stoked for the purpose of achieving a certain goal. When private companies become involved in water management, opponents immediately tend to warn against a resource or facility buy-out.
Veolia Wasser makes it very clear that our company only wants to engage in Public-Private Partnerships where a sound operation can be assured, and the benefits we can achieve through mass procurement and other optimisation efforts we seek to share with the public sector! And Veolia Wasser also offers individual services.
API: Now a word about you. You previously worked in a leading position in public bus transport for many years. How did you join Veolia and what does the water sector mean to you?
Höfinger: Indeed, I had the opportunity to be involved in the change from “rail bus” to “postal bus”. But it primarily ended in a downsizing of staff to curb expenditures, and I certainly didn’t enjoy that at all. So when I was offered a job at Veolia’s Slovakian operations to restructure domestic transport, I gladly accepted the challenge. After all, it is much more exciting to build up a company than the other way round. At Veolia, I also learned so much more about water and began to treasure the resource. Water supply is one of the truly crucial infrastructure services.
API: Thank you for this interview!
(Source: aqua press Int. 4/2008, Mag. Christof Hahn)