Veolia under fire for water quality in China

France-based water supplier Veolia Water is under fire as excessive levels of benzene were found in tap water offered by the company in Gansu province's Lanzhou. This undated picture shows the office building of Veolia Water in Lanzhou. [Photo / people.cn]

(ECNS)-- France-based water supplier Veolia Water is under fire as excessive levels of benzene were found in tap water offered by the company in Gansu province's Lanzhou.

As the incident brews, more water safety violations by the company have surfaced, the Beijing Youth Daily said on Monday.

Panic buying of bottled water was seen in Lanzhou after tap water was exposed of containing excessive levels of benzene, a substance with a carcinogenic effect.

The incident exposed the company's administrative vulnerability, said Wang Zhansheng, an expert who joined the drafting of China's national standard for purified drinking water.

The company's lack of alternative water resources and a contingency plan contributed to the delay in offering safety drinking water to local residents after the case was exposed, according to Wang.

As a company providing water services for 43 million people in China, Veolia's performance has been put under scrutiny after the exposure of the case.

An investigation launched by Beijing Youth Daily shows that Veolia's reputation has been challenged by a series of water contamination incidents.

The company was exposed of being involved in 13 water pollution cases since 2007 in different cities around the country, including Shanghai, Beijing, Qingdao, Zhuhai, Haikou, Urumqi, and Lanzhou.

In one case that happened only one month before the Lanzhou incident, a waste water plant run by Veolia in Qingdao, Shandong province, was accused of discharging over-standard fecal coliform.

The company's business had witnessed a boom between 2002 and 2008 thanks to a policy incentive for marketization reform of public utilities in China issued by the Ministry of Housing and Urban-Rural Development in 2002.

The company won eight water projects in China in less than two years.

However, it has failed to maintain its strong momentum. The impact of the 2008 international financial crisis and the global trend of public utility nationalization put an end to the fast development of Veolia and other foreign water companies in China.

Starting in 2007, Veolia started to cut the budget for its China businesses. A strategy of seeking high profits with obsolete equipment and limited funds may have led to the water contamination case in Lanzhou, business analysts said.

However, some experts said the company's foreign background should not be blamed for the Lanzhou incident. The nature of the firm should not be linked with the incident.

Such comments have been echoed by an expert from the Chinese Academy of Sciences who said the company's business is an incident-prone one.

One proper way to promote development of water utilities in China is to treat domestic and foreign businesses equally, the expert added.