Ondeo (SUEZ) Wins the World's Largest O&M Water Services Contract in Puerto Rico

10-Year Contract Valued at $4 Billion

Ondeo (SUEZ), with its North American subsidiary United Water, has been awarded a 10-year, $4 billion contract (an average of $400 million in annual revenues) for the operation and maintenance (O&M) of the water and wastewater services of the Commonwealth of Puerto Rico. The contract, awarded by the Puerto Rico Aqueduct and Sewer Authority (PRASA), is the largest O&M contract for water services ever awarded. This historic contract confirms Ondeo's leadership position in the North American market.

The contract, which includes an extension provision, covers the production and distribution of drinking water for Puerto Rico's nearly 4 million residents, as well as the collection and treatment of wastewater for the entire island. The operator is responsible for operation, maintenance, and renovation of the infrastructure, for client service, and for human resources management.

The contract calls for management of the entire PRASA system, which consists of

• 133 water treatment facilities,

• 68 wastewater treatment facilities,

• approximately 7,700 miles of water distribution pipelines,

• approximately 3,900 miles of wastewater collection pipelines,

• 30 customer service centers, and

• Nearly 6,000 employees.

The award of the contract follows an international call for tenders

focusing on three primary objectives.

• Support for the Agua para todos (Water for All) program which was launched recently by Puerto Rico's Governor, and which is aimed at providing a consistent, adequate supply of water to the island's residents and at extending water systems to areas that are not currently serviced.

• Compliance with health and environmental standards set by the U.S. Environmental Protection Agency and the U.S. Department of Health.

• The optimization of the Puerto Rican government's program of investment, which is designed to improve water systems infrastructure.

O&M contracts allow local governments to delegate management of their water and wastewater systems to private operators while retaining ownership of the systems themselves. The U.S. market for delegated management contracts, which help local governments to increase operating efficiencies, reduce their costs and gain access to funding for infrastructure improvements, has grown steadily over the last several years and is expected to continue its expansion.

In 2001, Ondeo, the water division of SUEZ, generated revenues of EUR 0.1 billion in North America, in the areas of management of municipal water and waste water systems (United Water), design and construction of water treatment facilities (Ondeo Degremont), and services to industrial customers (Ondeo Nalco). The award of the PRASA contract is a major step in Ondeo's consolidation of its leadership in the North American market, which, after Europe, is its most important geographic base of operations and a key focus for growth for both Ondeo and SUEZ.

SUEZ is one of the world's premier services groups, active in Energy, Water, and Waste Services, with 190,000 employees at work in 130 countries. SUEZ is listed on Euronext Paris and Euronext Brussels, as well as on the Luxembourg, Zurich and New YorkStock Exchanges.

Ondeo, the water division of SUEZ, comprises four key businesses: Ondeo Services, Ondeo Nalco, Ondeo Degremont, and Ondeo Industrial Solutions. The world leader in water-related services, Ondeo serves 115 million consumers and 60,000 industrial customers and has built more than 10,000 water treatment plants around the world.

United Water, a wholly owned subsidiary of Ondeo, is one of the largest water services companies in North America. Founded in 1869, it provides 7.5 million people with water and waste water services in 16 states in the United States. Through public-private partnerships, United Water manages four out of six of the largest contracts for delegated management of water-related services currently in effect in the United States: Atlanta, Milwaukee (wastewater), Indianapolis (wastewater) and Jersey City.


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