Veolia Water Technologies & Solutions

How Outsourcing Can Help Finance Water and Wastewater Projects

Erik Nottleson
| February 20, 2024 |
long-term services

Safe, reliable water and wastewater reuse systems are essential to communities and our future. The World Wildlife Fund reports that, by 2025, an astounding two-thirds of the global population could face water shortages.

While these systems are crucial to our long-term sustainability, building and operating them carries inherent risks. Each phase — from raw water supply to treatment delivery — requires upfront costs and ongoing operation and maintenance expenses. Unplanned failures, demand fluctuations, regulation changes, and other uncertainties can strain resources. Plant owners and managers must leverage their available capital, personnel, expertise, and budget to effectively manage these risks.

Financing costs, like site development, construction, plant design, and permitting, rack up quickly and can be a major hurdle. Outside financing or outsourcing costs and responsibilities to a third-party services company can supplement internal resources,allowing for a system’s efficient management despite the complexities.

Investment capital can be ten times more expensive than annual operating expenses, so foresight is needed to have a successful project. With many variables in flux, outsourcing can be a great way to find cost certainty.

Let’s dive deeper into what you may need to consider to determine whether outsourcing is right for you.

Assessing your needs

First, take a close look at your existing wastewater infrastructure and treatment operations against the system you need to build or upgrade. Consider factors like aging equipment, changing regulations, capacity constraints, and process optimizations.

Next, define the scope and specifications for projects that need to be completed. Will you need to replace certain components? Construct new facilities? Expand treatment capacity? Upgrade to newer technologies? Clearly outline each project.

Conduct technical assessments and develop engineering estimates for the required work. Get projected costs for equipment, materials, labor, construction, permitting, and other needs. Build a comprehensive budget so you know what financing would be required, and you can better understand if outsourcing is the right strategy for your project.

A common form of outsourcing is the Long Term Service Agreement model, in which the supplier has full responsibility for system design, construction, and treatment services, limiting the owner’s investment expenses. The Long Term Service Agreement model is especially advantageous to build and develop new or expansion facilities.

Exploring outsourcing benefits

By partnering with an experienced service provider, you can supplement your internal resources and capabilities, allowing you to optimize project delivery despite budget constraints.

Additionally, outsourcing delivers financial predictability regarding ongoing expenses. Service contracts feature fixed monthly fees for labor, maintenance, equipment, and other defined responsibilities. This contrasts with the variable internal costs of directly handling operations and significant liabilities.

By leveraging outside expertise, you can also fill gaps, improve efficiencies, and apply specialized skills that enhance project execution. Service providers possess extensive experience constructing, operating, and maintaining wastewater infrastructure. This expertise optimizes treatment performance and allows you to focus on core competencies.

Selecting the right partner

If you decide to outsource portions of your wastewater project, it is crucial to select the right service provider. This long-term relationship will significantly impact your project’s success. Approach the selection process carefully and systematically.

Look for established expertise in constructing and operating the types of facilities and equipment involved in your plans. Review potential partners’ track record of successfully executing complex initiatives from design through long-term operations. Evaluate each company’s technical capabilities. Do they have qualified engineers, operators, electricians, and builders to handle the intricacies of your project? What resources, innovations, and specializations can they leverage to optimize the work? Make sure their areas of expertise align with your needs.

At Veolia Water Technologies & Solutions, operations outsourcing is a popular service because our customers leverage our teams’ decades of experience in water innovations. Our operations outsourcing service is designed to help you minimize the overall operating cost of your water or wastewater treatment plant and maximize its reliability. Veolia’s field service representatives (FSRs) provide a level of service that helps you save time, valuable resources, and money. Take RWEn Power for example. When the company trusted Veolia with its water treatment, the partnership resulted in $300,000 in power savings for RWEn.

Veolia’s long-term services provide treated water that meets your requirements for purity and volume with little or no capital expenditure, reduced operating costs, and improved technical performance. Learn more about our flexible models of service based on asset ownership and how our team can help with your water project from source water to final supplied water.

About the Author

Erik Nottleson

Proposal Manager

Erik Nottleson has been engaged in all forms of water treatment system design, delivery, and operations for over 30 years, including project engineering, process design, estimations, proposal management, construction management, negotiations, contracting, purchasing, and cost-optimization for both capital sale and BOO systems. Erik began his water career with Ionics, then worked on the Taunton River Desal Plant with Inima, and returned to Ionics after its acquisition by GE Water (then SUEZ WTS, and now VEOLIA WTS). In his current role, he has designed, bid, and supported approximately 40 operating sites in the Caribbean since 2008 as a part of Aqua Design / GE Water / SUEZ WTS / VEOLIA WTS.