The Worlds Leading Water Companies

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The company had undergone heavy debt which resulted in a fire-scale of the company’s assets, dizzying financial condition, and an identity crisis. In the year 2002, the company had declared a net loss of €12.3 billion. As a consequence, the company’s rate with regards to credit has turned into ‘Junk’ status. Vivendi Universal had sold a fraction of its large holdings to pay off the debt of stakeholders. The shareholders of the company sued against the former manager and claimed a price of 54 million USD. In the year 2002, due to bad financial conditions, Vivendi Universal was forced to sell part of its stake in Vivendi Environnement. In order to retain the confidence of shareholders and also to reflect the organization’s greater independence, Vivendi Environnement was named as Veolia Environnement (Public Citizen 2005).Veolia Environnement is a water and environmental-based services subsidiary company and according to economic theory, providing water service is observed as a natural monopoly business, because ‘average cost of water becomes lower as the output increases’. This natural monopoly characteristics of water business helped Veolia Environnement to dominate in this sector. Approximately 70% of the international privatized water business is ruled by two companies, i.e. Veolia and Suez. Both companies have made a joint subsidiary company so that profit can be shared between them in lieu of competing with each other. Both the companies had created an uncompetitive business situation through joint ventures (Public Citizen 2005).Veolia Environnement though used illegal methods such as bribery to get water contracts. For example, two senior executives of Veolia Environnement was convicted for giving bribe to the Mayor of St. Denis for obtaining water contract in the year 1996 (Public Citizen 2005).Besides bribery, there are other critiques of Veolia Environnement, for example, in the year 2003 Veolia Environnement’s wastemanagement was ordered to provide a fine of 100,000 Euro for damaging of 3500 hectares scrubland by fire. In 2000, Veolia Environnement misled the investors for purchasing the US Filter plant.