Veolia Water, the Water Division of Veolia Environnement, has been awarded the contract for the turnkey supply of a new seawater desalination plant in Bahrain. The contract, worth USD 336 million (i.e about € 275 million), was won following an international call for tenders. Start-up of the plant will take place from April 2007, with the first two units, till November 2007.

The plant will have a drinking water production capacity of 273,000 cubic meters per day, making it the largest desalination plant in the world using the thermal process known as "multiple effect distillation" (MED). Sidem, a subsidiary of Veolia Water Solutions & Technologies, is the world leader in MED, with more than 370 units built so far.

MED is based on the evaporation and condensation of seawater in a series of chambers under vacuum. When water is evaporated in the chambers, the salt content is separated out. The Bahrain plant will be combined with Al Hidd power plant, from which it will recover the low pressure steam to feed the 10 desalination units. Each unit has the capacity to produce 27,300 cubic meters per day of drinking water.

"The new desalination plant in Bahrain is a decisive step for Veolia Water in the recognition of its expertise in thermal desalination using multiple effect distillation, a process in which it is world leader. The contract also strengthens Veolia Water's position as a major player in the design and construction of desalination plants and processes in the Middle East for both thermal and reverse osmosis technologies," said Antoine Frérot, Chief Executive Officer of Veolia Water.

Veolia Water, the water division of Veolia Environnement, is the world leader in water and wastewater services. Specialized in outsourcing services for municipal authorities, as well as industrial and service companies, it is also one of the world's major designers of technological solutions and constructor of facilities needed in water and wastewater services. Veolia Water serves 108 million people worldwide. With 70,700 employees, its 2005 revenues amounted to €€8.9 billion.

Veolia Environnement (Paris Euronext: VIE and NYSE: VE) is world leader in environmental services. With more than 270,000 employees the company has operations all around the world and provides tailored solutions to meet the needs of industrial and municipal customers in four complementary segments: water management, waste management, energy management and passenger transportation. Veolia Environnement recorded revenue of €€25.2 billion in 2005.

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. These statements are based on management's current expectations or beliefs and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including 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.

Analyst and institutional investor contact: Nathalie Pinon - Tel. +33 1 71 75 01 67
US investor contact: Brian Sullivan - Tel +(1) 630  371 2749