Baltimore City Says It Does Not Plan to Privatize Water

December 3, 2014

Baltimore's city council questions top official over plans to use private companies to study how to improve Baltimore's aging water system as opponents warn such a move could lead to privatization

Baltimore's city council questions top official over plans to use private companies to study how to improve Baltimore's aging water system as opponents warn such a move could lead to privatization



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Story Transcript

JAISAL NOOR, TRNN PRODUCER: Welcome to The Real News Network. I’m Jaisal Noor in Baltimore, where I’m here at a City Council hearing on the question is Baltimore going to privatize its water. The department’s director says no.

RUDOLPH S. CHOW, DIRECTOR, BALTIMORE’S DEPT. PUBLIC WORKS: There’s absolutely no plan to privatize the water system.

NOOR: But several activists, concerned citizens, experts, and union members say the city has reason to be concerned.

Much of the hearing focused on the city’s plan to pay an outside firm up to half a million dollars to study how to improve efficiency within the city’s aging water system.

BERNARD C. YOUNG, PRESIDENT, BALTIMORE CITY COUNCIL: I believe within myself that we have people within the water department and working with the unions that could reach those same goals.

CHOW: It is not an easy process. It’s not a process that our current employee has. That’s issue number one. Number two, as you stated, many of our retiree has now went about to work for consulting firms and others.

NOOR: Much of the focus was on Veolia, the world’s largest private water company. It’s one of the firms that submitted a letter of interest to carry out the efficiency study for the city.

ERIN DIAZ, CORPORATE ACCOUNTABILITY PROJECT: We have heard from Mr. Chow that the city hopes to offset rate hikes. Yet Veolia’s track record is littered with rate hikes, as well as labor abuses, water quality violations, poor performance, and failed contracts, and saddling cities with millions in additional costs. Indianapolis, for example, spent $29 million to terminate its contract with Veolia in 2010. During its tenure with the city, nonunion employee benefits were cut. A federal grand jury investigated Veolia’s alleged falsified water quality reports, and a class-action lawsuit was filed to address Veolia’s alleged overbilling of residents.

NOOR: Opponents argue that because of its previous failures, Veolia now provides services that don’t explicitly call for privatization but still are privatization under a new name. One such example is Veolia’s Peer Performance Solutions, the model suggested in its application to the City of Baltimore, which was obtained through a Freedom of Information Act request.

DIAZ: In this model, Veolia would have a role in determining how Baltimore’s water system will be operated and managed. PPS involves revenue sharing, where Veolia is paid a percentage of any savings it helps to generate. This creates an incentive for Veolia to recommend changes that cut costs, but could undermine the long-term sustainable management of Baltimore’s water system.

NOOR: At the hearing, critics also noted Veolia has given over $5,000 to Mayor Stephanie Rawlings Blake and raised concerns it took a Freedom of Information Act request to reveal that Veolia has been in direct correspondence with city officials, including Chow, for the past year and a half. Chow declined to comment about the concerns raised about Veolia.

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NOOR: There’s lots of issues raised about Veolia. Do you have any comment about that company specifically?

CHOW: No, no comment.

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NOOR: But Matt Demo, director of communications for Veolia North America, told The Real News, peer performance models are extremely successful. He said, quote,

“The best evidence of Veolia’s success is a very high partnership renewal rate of 97% percent. Among the 550 communities we serve in North America, no contract renewals were lost last year to competitors and only one very small community reverted back to municipal management. Our partnership models support public ownership, public rate-setting and public control.”

At the hearing, Chow did argue Baltimore could benefit greatly from such an agreement.

CHOW: I want us to stay as a public agency with integrity and caring of the citizens, yet operate with the creativity, knowledge, and experience of the private sector to gain efficiency and knowhow. In essence what I’m asking for and want us to transform to is that I want the city to have the best of both worlds. We are not motivated by profit. Our vision is very clear, as I stated earlier, in the environment and the [safety] and well-being of our citizens.

NOOR: But longtime Baltimore resident advocate Art Cohen Coen disagrees.

ART COHEN, BALTIMORE CITY RESIDENT AND ADVOCATE: Well, I can’t second-guess Director Chow about his view of this. He may be quite sincere in thinking we’re just going to get a little advice from Veolia, and then we’ll–if the advice is good, we’ll follow it within our own shop.

But that’s not how Veolia operates. It’s insidious. And it’s thoroughly professional in knowing how to get public utility, water, and sewer utilities to start buying its services. So I’m very skeptical about whether any involvement in Veolia will just end with this contract.

Actually, this contract is sizable. It’s half a million dollars. What if that half a million dollars were turned back to the city to do some new training and some brainstorming and do some of the design work that they say they have not been able to do until recently?

NOOR: The Real News will keep following this story. From Baltimore, this is Jaisal Noor.

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