Half a year after it was acquired by France's Veolia Environnement, Sofiyska Voda, the company operating water supply and treatment services for the Bulgarian capital Sofia, has been criticized for the poor quality of the vital liquid.

"The quality of the water supplied in Sofia has gone down, while the number of technical failures along the network of pipes and the amount of lost water has gone up over the last year," says a report of a municipal watchdog, which monitors the work of concessionaires.

Just three months earlier the company announced a 9.37% hike in prices, which will increase them from BGN 1.28 to BGN 1.40 per cubic meter.

The company, which serves 1.3 million inhabitants, recently threatened to suspend supplies to its debtors.

Outstanding payments currently amount to BGN 59 M, the concessioner announced, adding that the sum exceeds the investments of BGN 52 M it made in an upgrade of no more than 1% of the sewage system last year.

More than twenty years after the fall of the communist regime, Bulgaria's water sector remains one of the least reformed systems in the country.

Except for Sofia municipal water supply, which has been granted on concession to a foreign investor, all other units in the sector are either owned by the state or the municipalities.

The company in Sofia however has been harshly criticized for shortage of investments in the upgrade and maintenance of the system.

An average 60% of water pumped in the pipes never reaches Sofia consumers, while in some regions losses account for up to 90 %.

The deal for the sale of several European water supply and treatment businesses from United Utilities, including Bulgaria's Sofiyska Voda, to France's Veolia Environnement, was finalized at the beginning of November last year.

Veolia, the world's biggest listed water company, unveiled the deal, with an enterprise value of about EUR 199 M in June. United Utilities sale of non-regulated businesses included subsidiary United Utilities Australia and investments in the UK, the Philippines, Bulgaria and Poland.

The French utility took a 77.1% stake in Sofiyska Voda, the company operating water supply and treatment services for the city of Sofia in Bulgaria. The acquired stake includes the share of the European Bank for Reconstruction and Development.