City of Taunton, Mass., and Veolia Water North America Begin Partnership for Sanitary Sewer System Improvements.

Agreement Expands Wastewater Services Agreement

TAUNTON, Mass. -- The City of Taunton, Mass., and Veolia Water North America marked the beginning of a major capital upgrade program to the city's 96-mile sanitary sewer (collection) system with a celebratory ribbon- cutting today. The program is part of a recently city-awarded 12-year, $12 million contract with Veolia Water for the management and restoration of the city's aging collection system.

The Department of Environmental Protection (DEP) put Taunton on notice nearly two years ago, stating its sanitary system was inadequate and too old to handle its current wastewater and storm water flows. Facing severe DEP fines if it did not improve its system, the Taunton city leaders, after a competitive bid process, selected its current wastewater services provider, Veolia Water, to provide assistance.

"The city's system is over 100 years old and has been neglected for decades. We simply do not have the manpower nor the deep resources like those of Veolia Water that are needed to fix our problems, so we are happy to expand our partnership with Veolia Water to include the sanitary sewer system. Plus, we are expecting the public-private partnership approach to save more than $200,000 per year, compared to the city continuing to operate and maintain the system," said City of Taunton Mayor Robert Nunes.

The agreement that officially kicked off today calls for Veolia Water to be responsible for the collection system and to facilitate a rapid implementation of capital improvements, with the city's consent, to meet the terms of the client's consent decree. The first two-year stage of the program will include accelerated cleaning of the system.

Veolia Water has managed the city's 8.4-million-gallon-per-day wastewater treatment plant since 1998. "As the city's partner for wastewater treatment services, we understand the city's needs for the system as a whole. And with the two systems closely tied and now both managed by Veolia Water, the city will see significant benefits in terms of operations and overall cost savings. We are delighted with this continued opportunity to serve the city of Taunton and assist city leaders in meeting the requirements of the administrative consent order," said Philip Ashcroft, president, Veolia Water North America -Northeast.

Veolia Water plans to introduce major improvements to the Taunton system, including streamlining authority and responsibility, implementing an asset management plan and implementing a comprehensive program for capital upgrades, renewals and replacements.

Veolia Water North America is the leading provider of comprehensive water and wastewater services to municipal and industrial customers, providing services to approximately 14 million people in more than 600 communities. The company is part of Veolia Water, the No. 1 water company in the world, serving more than 108 million customers. Veolia Water is the water division of Veolia Environnement (NYSE:VE) and (Paris Bourse:VIE), the largest environmental services company in the world, with more than 270,000 employees in about 64 countries and annual revenues of $30 billion. Visit the company's Web site at www.veoliawaterna.com.

Important Disclaimer. Veolia Environnement is a corporation listed on the NYSE and Euronext Paris. This press release contains "forward-looking statements" within the meaning of the provisions of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements are not guarantees of future performance. Actual results may differ materially from the forward-looking statements as a result of a number of risks and uncertainties, many of which are outside our control, including but not limited to: the risk of suffering reduced profits or losses as a result of intense competition, the risk that changes in energy prices and taxes may reduce Veolia Environnement's profits, the risk that governmental authorities could terminate or modify some of Veolia Environnement's contracts, the risk that Veolia Environnement's compliance with environmental laws may become more costly in the future, the risk that currency exchange rate fluctuations may negatively affect Veolia Environnement's financial results and the price of its shares, the risk that Veolia Environnement may incur environmental liability in connection with its past, present and future operations, and the risks related to Veolia Environnement's relationship with Vivendi Universal, as well as the risks described in the documents Veolia Environnement has filed with the U.S. Securities and Exchange Commission. Veolia Environnement does not undertake, nor does it have, any obligation to provide updates or to revise any forward-looking statements. Investors and security holders may obtain a free copy of documents filed by Veolia Environnement with the U.S. Securities and Exchange Commission from Veolia Environnement.