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P3 agreement in Saint John allows water utility to be sold

Saint John, New Brunswick

The Council of Canadians continues to raise concerns about the public-private partnership (P3) water treatment plant in Saint John.

CBC reports, “The City of Saint John has made public the legal agreement for its Safe Clean Drinking Water Project. The agreement contains 2,000 pages of documents, including the contract with Port City Water Partners, the P3 consortium that will design, finance, build, operate and maintain the city’s water treatment facility over the next 33 years. …Included in the contract is a section that allows the company to be sold one year after the construction phase of the contract is fulfilled. A change in ownership could occur earlier if the city agrees.”

The article highlights, “A change in ownership is not unusual in public private partnerships says Emma Liu, water campaigner for the advocacy group, Council of Canadians. ‘That’s very concerning’, said Liu. ‘The permission isn’t needed by the city — that’s a huge concern — but also consultation with the public as well.'”

In fact, Saint John may want to look at the experience that Hamilton had in this respect. In 1994, Hamilton awarded a contract for its water and sewage treatment plants to Philips Utilities Management Corporation. CUPE notes, “In the ten years that followed, the contract shifted four times — with two of the contractors now bankrupt and one of them a subsidiary of Enron! The P3 contract came up for renewal in 2004, with the city eventually opting to bring water and sewage treatment back into the public sector.”

There are other reasons to be concerned about this public-private partnership between Saint John and the Port City Water Partners consortium.

That consortium includes:

– New York-based Brookfield Financial Corp., a global investment bank, which leads this consortium

– Spain’s Acciona Agua, “a leader in the water treatment sector with the ability to design, construct and operate drinking water treatment plants”

– North America Construction Ltd.

– AMEC Environment and Infrastructure

– Dessau Inc., an engineering company

– Quebec’s Simo Management Inc.

– FCC Construction and Gulf Operators, both Irving owned companies.

We have warned that if Saint John were to decide in the future to make their drinking water utility fully public again that Madrid-based Acciona Agua could challenge this through the investor-state dispute settlement (ISDS) provisions in the Canada-European Union Comprehensive Economic and Trade Agreement (CETA). As an example, last year Argentina was ordered by the World Bank’s International Center for Settlement of Investment Disputes to pay $405 million to the French transnational Suez for cancelling the corporation’s water and sewage services contract.

We have been speaking out against the P3 in Saint John for several years and will continue to do so.

In February 2013, the Council of Canadians Saint John chapter had organized a teach-in opposed to the proposed P3 for their water system. In March 2013, the chapter called on city council to seek an independent study on P3s and to delay its plans to apply to a federal P3 fund. In May 2013, the chapter organized a public meeting featuring the retired commissioner for Saint John Water who said the P3 would cost the city more in the long term and would lead to a lack of accountability and transparency in decision-making. The retired commissioner estimated the city would pay $35 million more for the project than it would under a traditional tender.

Our opposition to a P3 in Saint John goes even farther back. In October 2009, the Telegraph Journal reported, “[Council of Canadians] water campaigner Meera Karunananthan said P3s are simply forms of privatization, arguing Saint John should not allow private companies to finance, own or operate water or wastewater services.”