Rialto a no-go after all
- From: Vol 3, Issue 8 (August 2012)
- Category: Need to know
- Region: Americas
- Country: United States
- Related Companies: American Water, Cal Water, PERC, Rialto Water Services, United Water and Veolia
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Rialto Water Services, the financial backer of the proposed 30-year water concession in Rialto, Calif., ejected American Water as operator in the concession agreement.
- Rialto’s council voted against the contract in July 2011, but subsequently approved it in March 2012.
- The decision appears to have been heavily influenced by labor unions, which are on bad terms with American Water. Rialto Water Services wrote in a letter to the city that Veolia is the preferred replacement operator of the wastewater system.
- But Veolia isn’t the only candidate. An alliance of PERC Water and Cal Water is also understood to be in the running. If the partnership is chosen, Cal Water and PERC would run the water and wastewater systems, respectively.
- While American Water mourns its lost contract, smaller O&M players have reason to be a bit more upbeat. Several regional firms are projecting high margins and double-digit growth for 2012.
- Veolia was hired by the Pittsburgh Water and Sewer Authority to provide interim executive management services. Jim Good, previous boss of Veolia’s Western U.S. operations, will serve as interim executive director of the PWSA.
- Veolia will receive $150,000 per month over the next year and will be eligible to receive bonuses based on operational improvements and savings created for the authority. PWSA has been leaderless for two years and has carried heavy debt.
- Laurent Auguste, CEO of Veolia Water Americas, told AWI that his company has completed the evaluation phase of its operational efficiencies contract in New York City. The implementation phase began in July.
- Nassau County, N.Y., officials said 13 investment firms have expressed interest in financing the proposed sewer system operations contract that was awarded to United Water in May. The county expects at least $700 million up front to pay off debt.
- A joint venture of United Water and KKR has been confirmed as the winner of a 40-year water concession in Bayonne, N.J. The consortium will pay $150 million up front to reduce Bayonne’s debt. United is also teaming with KKR on an O&M proposal in Harrisburg, Pa.
- The City of Stockton, Calif., which declared bankruptcy last month, recently bumped up the estimated cost of its wastewater treatment plant upgrades to $156 million. Going deeper into debt seems like the city’s only option – unless it considers selling the wastewater system.
- Stockton was followed into bankruptcy by two other California cities last month. Mammoth Lakes filed on July 2 followed by San Bernardino on July 11. Can these unfortunate munis learn from Stockton’s decision to play politics when considering public-private partnerships?