The SPGE owns the sewers it installs. It finances the construction of sewers and leaves it to the approved treatment bodies (OAAs) and the municipalities to take part in their conception and management (maintenance), in full compliance with public procurements rules.
1.Financial interest
The financial interest for municipalities is twofold: on the one hand, they intervene through capitalisation of their intermunicipal organisation, with an ex. VAT work sum; on the other hand, the possibility to pay by installments frees the municipalities from the obligation to borrow money. Moreover, the SPGE finances parts that were not subsidised before, and so were at the municipalities' cost (e.g. specific connections on the public domain).
Finally, additional costs to the works are totally taken on by the SPGE without municipal intervention. They are first due to the fees for the supervision of the work, studies, management and monitoring paid to the OAA. They may also be fees bond to geotechnical tests, the coordination-security mission, the all-risk insurance, ...
One must add that SPGE's financing also extends 1) to returning the road to a pristine state in the case of an ‘exclusive' file, that is, without any subsidised municipal intervention on the road, and 2) to the assumption of a flat rate whose calculation is established by the sewerage contract in the case of a ‘joint' file (i.e. when sewerage work is made jointly with repair work or adjustment work of the public space above the sewers.
From the point of view of the assets, the municipality owns a financial asset (shares in its intermunicipal organisation) instead of a tangible asset (sewers).
2. Mechanism
2.1. Capitalisation
SPGE's capital is divided into two types of shares: A and B.
The social capital is made up of A-shares. The shareholders applied for this capital intended by the article 7§2 2°, 3° and 4° of the decree of 15 April 1999.
B-shares are provision made by the Walloon Region, with the SWDE's equity investment, the means for ERPE's activity, the products of the water treatment fund and various debts for players of the sector.
A 700-share C-capital without nominal value has been built up. The number of shares is justified since the 7 OAAs will apply for them, acting on behalf of the municipalities (which will apply for shares specific to their respective organisation).
These will be profit shares.
Their statute must specify their rules:
they will give a preferential right on the liquidation bonus;
their value will be adapted to each final financial statement of the sewerage work.
they will be transferable as soon as the debts are paid.
However, they will confer entitlement neither to a dividend, nor to a right to vote, except in case of an amendment to the statutes.
2.2. Financing method and impact on the true-cost
The SPGE wholly takes care of financing the sewerage work, inc. VAT. Thereafter, sewers are and remain fully owned by the SPGE.
After every final financial statement, C-shares are reassessed. If the sewer network is new, the participation equals 42% of the work ex. VAT (more in case of the application of the principle of modulation for small housing density (see below)). If the existing network underwent rehabilitation or the reconstruction of an existing sewer without alteration of the section, the participation equals 21% of the work ex. VAT.
Each value reassessment of the C-shares creates a long-term debt for the approved treatment body (OAA) concerned, to the benefit of the SPGE. This debt can be recovered according to a schedule to be negotiated on a piecemeal basis with the body. The schedule cannot exceed 20 years; the annual installments can remain steady, increase or decrease gradually. As a matter of fact, the schedule is to be based on the financial capacity of the municipalities, which must in the same time release specific shares from their intermunicipal organisation. The municipal part of work is thereby brought through a two-level capitalisation system: first municipalities, then intermunicipal organisations building up financial assets (instead of a sewer network).
The incorporation of the cost of the investments in the water true-cost occurs through the depreciation in the SPGE's accounts over a 40-year period of the supplementary costs added to the investments.
2.3. Modulation
Municipal basis participation is defined as follows:
42% in case of laying of new sewers, or reconstruction of sewers with an extension of the section;
21% in case of reconstruction of sewers without altering the section, or in case of rehabilitation.
Municipal basis participation can be increased when new sewers are installed. It can also be adjusted to the housing density (under 15 PE/100m or 12 PE/100m depending on whether it is an agglomeration of more or less than 2,000 PE).
When the density is not reached, and considering ground particularities, municipal participation increases.
The participation rate is definitely fixed with the provisional acceptance of the work.