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Dear Readers!
There is good cause for celebration! 30 years of a unified Germany. Or perhaps we should say: ‘30 years of working on a unified Germany’? Seen from a historical perspective, it is certainly true to say that the reunification process has not yet been completed. In fact, looking at Germany’s history, you might well be excused for thinking that this process will never be completed. Each individual region has its own cultural peculiarities, its own dialect, its own sensibilities, its own breed of people. And, of course, their traditional dishes are worlds apart from each other. But that’s the way it should be as it is the differences that create a strong dynamic for change and enrich our culture and economy. Having said all that, we are still quite a young nation. Germany really hasn’t been around that long. Our country – as a federation of states – did not come into being until almost 100 years after the United States of America was founded. And we are all well aware that they are still working hard on unifying their nation.
We are very grateful that our family-run business has been able to play a constructive role in shaping the reunification process from the start. While criticism continues to be directed towards the Treuhand (the agency responsible for privatising the former East German enterprises) for the way it acted – its focus was often on processing rather than developing – our aim has always been on finding robust, future-oriented solutions by working closely on the ground with the different city and regional authorities. The results speak for themselves – whether it be in the Lausitz region where our public private joint venture WAL Betrieb provides water management services and has kept fees and charges stable and jobs secure for decades now despite the region’s declining population; or in Schwerin, where the public private partnership between the city and REMONDIS has been hugely successful at delivering key services cost effectively. And these are just two examples of many. It was – and continues to be – the amazing personal dedication of the company’s employees in the regions that made it possible for REMONDIS to become a local east German family-run business in these new areas after the wall fell. What’s more, some of the family moved from the Westphalian town of Selm to make their home in Mecklenburg-Vorpommern – but this just as a side note. Unity requires active commitment, as does sustainable development. REMONDIS is dedicated to both, always working with the future in mind.
One thing is certain: there are a lot of things still – or once again – to be done. The recession brought on by Covid-19 is having a dramatic impact on the finances of local authorities. According to the Federal Statistical Office, the cities and districts faced a shortfall of 9.7 billion euros in the first six months of this year. As a comparison: the deficit amounted to just 0.3 billion euros a year ago. The reason for this negative trend was the drastic fall in revenue received by local governments in the second quarter of 2020. The German economy nosedived by 9.7% between April and June – the first time it has ever had to face such a huge drop. Yet another reason then for thinking about how the pressure can be taken off local governments in the future. They don’t have to do everything by themselves – the private sector is happy to help. Public private partnerships are a robust solution for delivering cost-intensive essential services, such as waste management and water management tasks. I and Professor Michael Schäfer, retired professor of public sector economics at the Eberswalde University for Sustainable Development, illustrate this very clearly with the help of many examples in one of the books we co-authored – and we don’t forget to mention the negative examples either. As everyone knows, people learn from their mistakes so they can do a better job in the future. And this is precisely what we are doing together with our friends and partners in the not so new states in the east of Germany, in Europe and across the world.
We hope you enjoy reading this latest issue. Stay safe!
Yours
Ludger Rethmann
A history to be proud of
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The Lausitz Water Association found itself facing a difficult future following the reunification of Germany in 1990, with industrial businesses closing down one after the other and the population in and around Senftenberg and Hoyerswerda steadily falling. Today, Brandenburg’s largest waterworks and its operator are benefiting from the courageous decisions the association made back then – not least the decision to hand over the management of its water operations to WAL-Betrieb, a REMONDIS Aqua company, in 2006. For over 20 years now, WAL’s customers have not had to face rising fees – on the contrary, they have remained stable both for water supply and wastewater treatment.
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Investing with foresight
Chairman of the Lausitz Water Association, Dr Roland Socher, explained the reasons behind this success: “The fees and charges for drinking water and wastewater have effectively been frozen over the last 20 years. This can be put down to a number of important decisions that were made some years back. One of these decisions was handing over the business’s operations to a privately owned company 15 years ago. That has brought some huge benefits. The second decision was to have the foresight to invest in the future.”
A need to adapt structures
Foresight was definitely needed when the Lausitz Water Association (WAL) was founded back in 1992. The structure and the size of the business did not reflect the fall in demand. The waterworks in Tettau had originally been built in the 1950s to supply the newly established industrial businesses with water, in particular the coking plant in Lauchhammer. As part of East Germany back then, the waterworks was responsible for supplying both its industrial customers and the local districts, such as Hoyerswerda and Senftenberg, with water. In fact, the demand was so great that the plant had to be extended in 1962.
“The fees and charges for drinking water and wastewater have effectively been frozen over the last 20 years.”
Dr Roland Socher, Chair of the Lausitz Water Association
An urgent need for renovation work
The large investments that needed to be made in the waterworks following the reunification of Germany automatically led to the fees being increased, almost on an annual basis. At the same time, the number of local inhabitants continued to fall and the residents who remained in the region tried to limit the amount of water they consumed because of the ever increasing charges. Having invested so heavily in its infrastructure, the association found itself deep in debt in the 1990s. Many areas of its supply network, however, still needed to be renovated. At the time, it was not clear whether the association would be able to manage the balancing act of making the necessary investments while taking in less and less money.
Investment in a new waterworks
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The first milestone was reached at the beginning of the millennium when the decision was made not to renovate the existing waterworks but to build a new facility instead. A modern plant would enable the association to have a clearly defined and more predictable budget. With demand for drinking water continuing to drop, costs could be kept lower by operating a new and smaller waterworks. A long-term contract was signed with the Lausitz mining company ensuring that they would supply them with drinking water from their Schwarze Pumpe waterworks should demand exceed the capacity of the new plant.
Multi-stage procurement process
Moreover, a major project began in 2005 to extend the sewer system to cover the districts on the outskirts of the city and neighbouring villages. In 2003, the association then decided to put the plant’s operations out to tender. REMONDIS Aqua took part in this multi-stage, Europe-wide procurement process and was awarded the contract in 2005. A new company was founded specifically for this purpose – WAL-Betrieb – and it began working on behalf of the water association almost 15 years ago. WAL-Betrieb is a fully owned subsidiary of EURAWASSER GmbH & Co. KG, one of the leading water management companies in Germany serving a number of city and district authorities.
A modern portfolio of services
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The benefits for the local partners are obvious: pooling together know-how from various different areas guarantees a sustainable, high-quality performance and cuts administration costs as services are delivered centrally. Today, WAL-Betrieb employs 200 people and serves local authorities, industrial businesses, commercial firms and private individuals. Besides supplying drinking water and treating wastewater, the team also performs a range of additional tasks including household connection services, providing advice on and organising mobile wastewater management services, unblocking drains and cleaning sewers (including household pipes) as well as protecting groundwater and harvesting rainwater. What’s more, WAL-Betrieb has succeeded in extending its catchment area over the last few years: besides now serving the Kamenz water association in the state of Saxony, the company also supplies water to a number of industrial customers in the east of Saxony. In a nutshell: a real success story.