The first municipal water and wastewater company of Karlovy Vary was already formed in 1882. Until the 1950s, the beginning of the communist regime in former Czechoslovakia, the management and operation of water infrastructure was handled by cities and municipalities. During the communist era the management and operation of all water infrastructure was centralized on the national, regional or district level. The state centrally planned all investments in the development of water and wastewater systems.
In the 1990s, after the fall of communism in the Czech Republic, the water infrastructure was transferred back to municipalities. In the regions where vast water systems were built in order to serve more cities or municipalities, the municipalities started to associate in different ownership structures. So in 1993, The Water Management Association of the West Bohemia Region (in that time of the Karlovy Vary Region) was created. Its key objective was to carry out the management, operation and development of water supply and wastewater treatment infrastructure of 40 municipalities in the Karlovy Vary region, which were transferred to the Association.
The operational part of the former state company was privatized and on January 1, 1994 the joint stock Water Company Vodárny a kanalizace Karlovy Vary (with its trade mark Vodakva) was established. In order to maintain the control over the company´s operations, the Association became one of the two main shareholders of this new joint-stock company. The second main shareholder was the French international company SUEZ (at that time Lyonnaise des Eaux), active in the water industry for a long time. Then the Association concluded a 25 year operating lease contract with Vodakva and transferred to Vodakva the responsibility for running and upgrading existing infrastructure.
Thus a unique system of water infrastructure management was set out. This system not only combines the advantages of municipalities´ mutual solidarity, but also the benefits of the cooperation between the private and public sector. The private shareholder brings its know-how and financial resources for investments in the company´s equipment. He also guarantees the maximum economic efficiency and the highest level of professionalism in the company´s operation. That can only be achieved by private ownership principles. On the other hand, municipalities control the company´s economy and its profit rate; approve the water and wastewater tariffs and use resources generated from these tariffs in form of rent paid by the operating company or dividends for investments in the development of water and wastewater systems.
The water supply and wastewater treatment systems management based on municipalities’ solidarity, their participation in the management and the control of the operating company and the close cooperation between the owner of water infrastructure and its operator also persuaded municipalities from other regions to join in. In twenty years, the number of Association´s members has more than doubled. In 1994 Vodakva supplied drinking water to 112,000 inhabitants, today the number is about 188,000.
While most water operators focused on common operation of water utilities, Vodakva was seeking to provide municipalities and customers with complete services that include beside common operation and management also permanent infrastructure upgrading in order to meet stricter demands on the quality of drinking water and outlet wastewater. This approach, based on company’s qualified staff and its ability to optimize the relationship between operating and investing expenses, permitted a significant improvement of the water and wastewater infrastructure in the member municipalities as well as the growth of operation´s range and quality at prices below the Czech average on a long term basis.