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The City of Winnipeg, Manitoba has decided to dissolve it’s water and waste water departments and form a stand alone utility.

During the final council meeting before the summer break, Winnipeg’s elected officials voted 10-6 to create a new city-owned agency that will assume responsibility for water treatment, sewage treatment and garbage and recycling pickup and possibly produce green energy.

The vote came nine hours into a meeting that saw council suspend its rules to allow 23 public delegations to speak about the utility proposal, which a broad coalition of unions and social activists opposed due to the possibility of a partnership with a private engineering consortium.

Source: City council approves new utility – Winnipeg Free Press

Maude Barlow & Meera Karunananthan from the Council of Canadians have been following this story…

As far as Mayor Sam Katz and his allies on city council are concerned, the decision on the new corporate utility was made before the public ever had a chance to weigh in.

The city invested $1.25 Million to explore the idea and put $250,000 toward a public relations campaign to promote the creation of an arms-length corporate water utility….

The corporatization of Winnipeg’s water and waste utility is the first step toward greater privatization. An arms-length corporation would limit the ability of elected representatives to oversee operations and make decisions in the public interest. Experiences in other cities like Edmonton have shown that corporate utilities whose primary function is to make profits can lead to the sale of public assets, a loss of public control and transparency, rate hikes and lower quality services….
It is important to note that many of the companies bidding for the Winnipeg contract are big transnationals whose sole motive is profit and growth.

If the City of Winnipeg chooses an American company, that company will have rights under NAFTA to sue for compensation if a future city council decides to return to a public system or bring about legislation that would restrict its profits.

These big corporations are for-profit, private companies required to find profits for their shareholders and will be forced to raise water rates for this purpose.

Source: Fast Facts: Municipal Corporate Utility for Winnipeg’s Water and Waste

Some of the companies that are in line to bid on this opportunity include American Water, Black &Veatch and Veolia Environment – these companies are extremely experienced in taking control of these assets. After all who was nominated for council so they could be in charge of a wastewater treatment plant? It is easy to read the propaganda and say, “Why not let the “professionals” deal with it”?

I worked for the consulting arm of a corporatized water authority in Australia, Hunter Water Australia. In this case, a regional water board, spanning many municipalities went corporate under a government effort to professionalize and rationalize all services. What it did achieve was efficiency in water and wastewater service for about 400,000 people – but in this case, no publicly traded companies were involved in the operation of the treatment plants, nor do I believe, were they allowed under the agreement.

This is a difficult decision for a council, they want the best, most cost effective service for their residents – and they are hearing from industry professionals that it is possible to achieve this with private cooperation and partnerships. The challenge comes in determining who sets the rates for water treatment, supply and wastewater collection and treatment. As soon as a business gets involved, there  is a profit motive, not just a service motive. Additionally, there is little incentive for these companies to maintain the equipment or invest for the future beyond the term of the contract. Further, there is no incentive for the companies to keep the raw water clean, as more treatment means more money. This is not the position that a municipality wants to take it’s water and wastewater utility to for a few efficiencies and apparent cost savings.

Is your water for-profit?

Published by Mike Thomas

Mike Thomas P.Eng. ENV SP, is the author of and Director of Engineering at the City of Revelstoke in the Interior of British Columbia, Canada.

One reply on “For-Profit Water in Winnipeg”

  1. Warning: Oil supplies are running out fast
    Catastrophic shortfalls threaten economic recovery, says world’s top energy economist
    By Steve Connor, Science Editor
    Monday, 3 August 2009

    The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned.

    Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could blow any recovery off course, said Dr Fatih Birol, the chief economist at the respected International Energy Agency (IEA) in Paris, which is charged with the task of assessing future energy supplies by OECD countries.

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