London-based specialist utility network operator, 24seven, yesterday said it was establishing a joint venture in Germany which will mark its first venture in continental Europe.
The new company is being set up on 50/50 basis with Stadtwerke Kiel, suppliers of electricity, gas and water in the Baltic area of northern Germany. The company plans to offer multi-utility network management services to the city of Kiel and also to other community and regional utility companies throughout Germany.
Under a proposed initial five-year contract with the Stadtwerke, the new company will manage and operate the electricity, gas and water distribution networks that serve some 350 000 customers in Kiel and the surrounding areas.
Stadtwerke Kiel will continue to own the local network assets and the new company will be staffed largely by staff seconded from Stadtwerke – utilizing 24seven’s systems and experience.
Commenting on the venture, 24seven’s Chief Executive, David Owens said, “This is an exciting development for 24seven, enabling us to expand our multi-utility network management expertise into mainland Europe.”
Remuneration under contracts entered into by 24seven is linked to the efficiencies achieved. Incentives and penalties are built-in based on 25-30 key performance indicators per network.
24seven was set up in April 2000 by TXU Europe and London Electricity Group as the first specialist utility network services company. It employs 2 500 people in the UK and is responsible for developing, operating and maintaining the electricity network in London and East Anglia.
The intention of the company was always to offer itself as a specialist network manager using the skills and experience of the UK operation. This week’s announcement therefore represents an important step in the company’s development. The group has ambitious plans to raise its annual turnover from about à‚£330m ($489m) to à‚£1bn and to seek a stock market listing by 2003.
A spokesman for 24seven said that there was considerable interest in the model being proposed by 24seven in terms of improving efficiency and splitting operation from ownership. Speaking to PEi On-line he said, “The small regional networks in Germany make it of particular interest but the model works all across Europe.” He said that they were also looking at opportunities in North America.