Omsk Water Utility

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On December 22, 2004, the Omsk City Council signed a 25 year lease and investment agreement for the city’s water infrastructure facilities with Russian company Eurasian Water Partnership (EWP). The contract was awarded following a competitive tender. The city of Omsk was located in South-East Siberia and had a population of 1.1 million according to the 2002 census. The lease contract included over 20 target indicators of quality and efficiency, to be monitored at 5-year regulation periods. In the first year EWP committed to invest some 450 million Rubles ($16 million) in the city’s water and wastewater infrastructure. Over the lifetime of the contract the company expected to invest ten times that amount; this additional investment was not specifically mandated in the original lease contract. The lease contract had a clause allowing it to be extended to 49 years. The lease contract was held by joint stock company Omsk Vodokanal, a joint veture between Eurasian Water Partnership and the municipality of Omsk. The city’s water and sewage infrastructure was to remain in the ownership of municipal utility Vodokanal. EWP started operating the Vodokanal infrastructure in mid 2005. As of November 2007, OAO Omskvodokanal operated as a subsidiary of Rosvodokanal. Rosvodokanal acquired 74.8% interest in JSC Omsk Vodokanal from Eurasian Water Partnership LLC and other investors for US$76 million in November 2007. The share of the municipality/EWP in project company are unclear, assumed 50/50. Investment committment is for 2008-2012. Rosvodokanal holds 75% in OmskVodokanal, which shared between Alfa-Group (90%) and Deutsche Bank (10%). So Alfa Groups holds 90%*75% = 67.5%