Chapter 3 Chapter 02 Water Price Contract Negotiation: Why It Was Frustrated by France

Imperialism is the highest stage of capitalism The monopoly alliances of capitalists, cartels, syndicates, and trusts, first carve up the domestic market and almost completely control the country's production in their own hands.But under capitalism, the domestic market is necessarily linked to the foreign market.Capitalism has long created the world market.Therefore, with the increase of capital export and the expansion of the largest monopoly alliance's foreign connections, colonial connections and "sphere of influence", these monopoly alliances will "naturally" move towards reaching a worldwide agreement and forming an international cartel. (Lenin: "Imperialism is the Highest Stage of Capitalism" People's Publishing House, April 2001, 3rd Edition, p. 58)

I would like to ask: why?What reason does the local government have to say that it will rise? Veolia's bid of 1.7 billion yuan is a premium of 4 times net assets.How will it earn back? According to this formula, Lanzhou Water Company should increase the water price according to the local price level and income level, not according to the cost. If you neither invest nor make money, how do you increase your assets? They have put in a lot of work, I don't know how to increase it, the ability of these artificial fakes is definitely higher than ours. Looking at the history of China over the past 5,000 years, of course, sometimes it is very miserable. The common people often have no food, but the common people cannot drink water because of the high price of water. This phenomenon has never happened in our history.

How important water is to us, I don't think I need to say more.In this chapter, we will talk about the recent increase in water prices in major domestic cities.According to reports, among the 35 large and medium-sized cities in the country, half of the cities will complete the water price increase in 2009, and 1/3 of the cities will increase the water price in 2010.Lanzhou City announced that starting from November, residents' domestic water will be raised by 0.3 yuan per cubic meter, and Harbin's water price will also rise. According to reports, Harbin's water supply and drainage companies hope to increase the water price by more than 100%.

Our water price is about to rise. I would like to ask: Why?What reason does the local government have to say that it will rise?Water is something we can’t do without all the time, unlike milk or beef noodles, we don’t have to eat it when the price goes up and we can eat other things instead.No matter how high the price of water is, you still have to drink it. Water is a necessity for people's livelihood and a strategic material.If you say it will go up, it will go up. The local governments in various places are so bold!Here I want to express my breath for the common people across the country and talk about why you raise prices.

The result of our research is that over the years, some local governments have vigorously attracted business and investment for the sake of political achievements, and as a result, they have attracted a few tigers that can eat people, and they have taken control of our water supply system.Who are they?The French Veolia Water Group and the Sino-French Water Affairs Bureau have come to China and controlled our water supply system in China, and then demanded a price increase.What's even more infuriating is that we studied the contract they signed at that time, which is simply humiliating and humiliating. This is my conclusion.After some local governments signed unequal water service contracts, now all of us ordinary people have to pay the bill.Our scholars are even more interesting. For example, scholars were invited to speak at price increase hearings in some places. Our scholars actually agreed with the government’s price increase, and believed that the increase was not enough and should be raised a little more.Are you representing the common people?Why don't we study why the price of water has risen?

This is a big question, and I want to start with the Lanzhou model.Because Lanzhou City has announced that it will increase the domestic water consumption by 0.3 yuan per cubic meter, I will talk about why the water price in Lanzhou has been raised.Of course, there are many cities like Lanzhou, not just one. Let's take a look at why the water price has to be raised. Some netizens said that no matter how many hearings are held, the opinions of citizens are of little importance in this game.According to the contract signed by Lanzhou City and Veolia Water Group two years ago, if the water price does not increase, Veolia can sue the Lanzhou Municipal Government for non-performance of the contract.So as long as the Lanzhou model still exists, the water prices in various cities will continue to rise round after round.

I believe all readers have a big question mark in their hearts when they see this, what's going on?There is another interesting phenomenon. Two years ago, Lanzhou City introduced a tiger named Veolia France in the name of attracting investment. Outside, the decoration of the office building and the building is the same as it was two years ago.Most of the water intake and water treatment facilities are assets before the company was acquired in 2007, and some of them still maintain the appearance when they were built in the 1950s.Moreover, the Party Committee, the Armed Forces Department and other institutions remain the same, and nothing has changed.According to Tian Huaqiang, director of the party-mass work department of Lanzhou Veolia, nothing has changed except for a few executives from Veolia.In other words, Veolia did nothing after it came.

Veolia, which has done nothing, proposed in the second year after the joint venture that the current water price is lower than the cost of water supply, and applied for a 40% increase in water price.why?Veolia said that the current cost of water supply for enterprises has risen to 1.95 yuan per cubic meter, upside down from the current price of 1.45 yuan per cubic meter, so it is required to increase the water price by 0.7 yuan per cubic meter to 2.16 yuan per cubic meter.What's more interesting?You want to adjust the price, and you say that the cost has risen to 1.95 yuan, then you take out your cost data, and Veolia is like the imperialists 150 years ago, blatantly rejecting our request.Can you believe it?What era is this?

Veolia refused to provide relevant data on cost increases. The Gansu Provincial Price Bureau investigated its price increase application and lowered the cost from 346 million yuan to 342 million yuan, and the total cost of its declaration was also reduced from 409 million yuan. To 361 million yuan, 48.56 million yuan was audited.But Wang Xin, director of the Price Bureau of Gansu Province, admitted that all the data came from Veolia.There is neither first-hand financial information nor a third-party accounting firm to conduct audits, and ordinary people have to bear the cost.Can readers believe it?

I also saw an interesting thing. On July 20, 2009, representatives of the hearing questioned Veolia, why did it depreciate 50 million in 2008?Generally speaking, before a water company acquires a city water supply company, the depreciation of the city's water supply pipeline is 8 cents per kilometer a year.After the entry of foreign capital, the depreciation period is reduced from 80 years to 10 years, so the depreciation is increased to 6 times, that is, depreciation is 50 cents per kilometer per year.Why improve?Because there are no specific regulations in the current regulations, these foreign-funded companies took advantage of this loophole.Increase the cost through depreciation, and then let the common people pay.How did you sign such a contract in the first place?

We researched the contracts at that time and found that there were three companies making offers at that time.Veolia offered 1.7 billion yuan to buy Lanzhou Water, its competitor Sino-French Water offered 450 million yuan, and Capital Water offered 280 million yuan.The French Veolia's offer was several times higher. Don't they want to earn back the price difference of several times?How dare you sell it?You sold the lifeblood of our common people!At that time, the net assets of Lanzhou Water Supply Group was 950 million yuan, and Veolia bought 45% of the shares, which was 427 million yuan.Calculated, Veolia's bid of 1.7 billion yuan is a four-fold premium on net assets.How will it earn back?Did it ever occur to you that it was for revenge?Do you think the French are stupid?Do you know that the acquisitions of French companies abroad are government actions? This is the strategic behavior of the state.We allow Carrefour to open a supermarket in China, but if we want to open a supermarket in France, as long as it exceeds 300 square meters, it must be approved by the French central government.Why did we allow it to come in with such disrespect?Because we don't know the rules of the game. Veolia spent 1.7 billion yuan to buy our water plant. What are the traps in the contract? First, stipulate the formula for water price increase, and this formula has nothing to do with cost.If your production cost for a cubic meter of water is 50 cents, and if the cost rises to 60 cents, you will have to increase the price, which is understandable because your cost has increased.But the facts are not enough. According to this formula, Lanzhou Water Company should increase the water price according to the local price level and income level, not according to the cost.Can readers believe it?We don't know whether the local income and price levels are real data.How do we know this?Veolia angrily announced the contract due to pressure from public opinion on water price hikes.According to the terms of the contract, Lanzhou City must increase the price, otherwise Sarkozy will call, the French are so hateful. Second, the land of Lanzhou Water Supply Group was supposed to be sold for 837 million yuan, but the Lanzhou Municipal Government decided not to include it in the transfer of assets after careful consideration, that is to say, it would be given to Veolia for free. Third, there is great potential for water supply improvement in Lanzhou City, because industrial water and domestic water are not separated in Lanzhou City.Industrial water has relatively low water quality requirements, and it doesn't matter if it is dirty, because it is only used to cool the machine.However, since Lanzhou City does not separate industrial water from residential water, tap water is also used for industrial water. This is the first time I have heard of such a thing.Moreover, the water leakage rate of the pipe network in the entire Lanzhou City is as high as 50%, which is equivalent to half of the water flowing away in vain. Moreover, Veolia is not responsible for the maintenance of the pipe network. It only needs to do one thing, which is to pay 1.7 billion yuan, and then there is no need to do anything. It only needs to adjust the price according to the price and income level.Who is responsible for such a large and complex water network in Lanzhou City, which is the most costly part?Lanzhou Municipal Government.If the Lanzhou Municipal Government does not do it, what about Veolia?Veolia said that the cost of all pipe network renovations is reflected in the water price.In this way, the pressure on the Lanzhou Municipal Government will be great. If Veolia is to do it, it will be reflected in the price of water, which will increase two or three times. Are the common people still making trouble?So the Lanzhou Municipal Government had no choice but to swallow their anger and do it all by themselves.What is Veolia doing?It only comes to make money, and that's how it got its 1.7 billion back. To sum up, based on market value, the water plant is worth 1.9 billion yuan, and we sold it for 1.7 billion yuan.Although this price is a 4 times premium compared to the net assets, according to my calculation, the market value should be 1.9 billion yuan.The transfer price was 200 million yuan lower than the market value, and the Lanzhou Municipal Government also gave Veolia 837 million yuan of land use rights for free.Moreover, after the transfer, the water price will not be adjusted according to the cost, but will continue to rise according to the price and income level, otherwise Lanzhou will be in breach of the contract.If Lanzhou City defaults on the contract, the French company will sue the Lanzhou City Government everywhere under the banner of the central government to get the money back.Moreover, we went back and forth, and finally we found that the transfers were all profitable businesses, and the pipeline network that really needed investment in construction was either done by the Lanzhou Municipal Government itself, or it was subsidized to Veolia in the form of rising water prices. it does.Moreover, the contract signed two years ago, today we find that the water price is rising every year, but Veolia has neither invested in the construction of water pipe network, nor introduced technology; neither sent experts nor hired professional managers, the whole The original team of the enterprise has not changed at all.It's just that a lot of work has been put into the financial statements, and the financial statements have been turned into losses through accounting operations, and then the price has been raised.As for how the loss was incurred and how the cost was calculated, Veolia blatantly refused our investigation and did not give us the information, as if returning to the Qing Dynasty 150 years ago. Of course, Veolia said, you don’t need to raise the price, the Lanzhou government must buy the factory back.And if you want to buy it back, you have to negotiate the price according to the balance sheet provided by Veolia.The details of Veolia's balance sheet are not published, but we found that they have put in a lot of effort, although they did not actually make any investment, they increased their assets. I don't know how they increased. These people have the ability to fake Definitely above us.There are only two ways to increase assets. The first is to increase investment, and the second is to convert undistributed profits into assets.According to Veolia, it is losing money every year, and according to our observation, it has not invested a dime.If you neither invest nor make money, how do you increase your assets? This method of transferring to foreign capital is really extremely bad, and the arrogance of foreign capital is simply unimaginable.If we want to repurchase, we must repurchase at the asset price that Veolia does not have any investment but does not know how to increase it. This is the contract we signed.So Lanzhou is now starting to raise water prices by 30 cents per cubic meter. Our scholars have also done bad things at this time. They talked about many problems and helped local governments find theoretical basis. This is what we scholars like to do most.As long as some local governments want to do something, regardless of right or wrong, they will find a group of scholars, and they will help you find theoretical basis.This time Lanzhou is going to raise the water price, our scholars found some theoretical basis: First, the adjustment of water price actually hurts the rich the most.I don't understand that sentence, and I can't figure out why they say that.They said that because rich people have swimming pools in their homes and go to saunas, their water consumption is more than 100 times that of ordinary people. If the price increases, they will have to pay an extra 3,000 yuan a month, so their burden It is very large, and the average person may only pay an extra 30 yuan a month.Comparing 3,000 yuan with 30 yuan, it can be seen that the rich suffer more damage. What is the logic?What is 3,000 yuan to those entrepreneurs in China who are getting rich?Going to a nightclub costs more than 3,000 yuan a night, and they don't care at all.But for our ordinary people, if the monthly water bill increases by 30 yuan, they will lose three meals, because most of them are very poor.Therefore, if you want to raise prices, you can raise prices for these enterprises, especially state-owned enterprises. For rich people, those who have swimming pools and saunas at home, raise prices for them.We ordinary people are very pitiful. There are two pumping buttons on our toilet tanks. A circle is cut in half. The smaller half is for flushing urine and the other half is for flushing stool. ?The sauna and the swimming pool really use a lot of water. They are not used by us old people, but by entrepreneurs. Therefore, if we want to increase the price, we will increase it for them. If we increase the price by 10 times, we will reduce it by half.If the price is raised like this, I believe the Veolia incident will be resolved very well. Second, our scholars have said that the "3%" principle calculated by the World Bank, that is to say, the water fee accounts for 3% of residents' income is the most reasonable.Taking Shenzhen as an example, if calculated according to this standard, the water price in Shenzhen should be 15 yuan per ton.Of course, it is far from this level at present, so they infer that there is a huge room for rising water prices.How do you calculate?What is the level of the United States?People's per capita income is tens of thousands of dollars a year, but we don't even have a few thousand.The vast majority of our people save only 6,000 yuan per capita. Isn’t it a joke if you use American standards to calculate in such a poor country?The range of water used by Americans is different from ours. They need to wash their cars by themselves, and their family lawns must be irrigated frequently, which is completely different from us.You still have to copy the "3%" principle of the World Bank, which is simply nonsense. The water shortage in Beijing is very serious, so the South-to-North Water Diversion Project was launched.According to experts' calculations, after the South-to-North Water Diversion Project, residents' water costs are expected to increase to 6 yuan per cubic meter, which is 2 yuan higher than the Beijing water price that has just undergone the first round of adjustments.Moreover, some experts estimate that this price is not sufficiently compressed, so there will still be a large gap in the future, so it is possible to increase the water price to around 8 yuan per cubic meter.The price of water has been raised to 8 yuan, coupled with the soaring housing prices in Beijing, do ordinary people still have to live?Looking at the history of China over the past 5,000 years, of course, sometimes it is very miserable. The common people often have no food, but the common people cannot drink water because of the high price of water. This phenomenon has never happened in our history. If the price of water rises to 8 yuan per cubic meter, I can't afford to drink it.Of course, local governments, please don’t judge yourself. I’m talking about a very small number of local governments who are suspected of the Lanzhou model. In order to attract investment, they sold the lifeblood of our common people, and it was auctioned at a high price.As a result of the high-priced auction, foreign capital will definitely make up for it through contracts.In the end, our common people have to pay the bill. China has always been a country that respects contracts. Since you have signed unequal contracts with companies such as Sino-French Water or Veolia, we have nothing to say.That being the case, those who can do more work, our entrepreneurs earn so much money, can we take it from the society and return it to the society?So, in the end, I suggest once again, please give them a 10-fold increase, and we ordinary people will reduce it by half.