TransAqua, the new name for the Greater Moncton Wastewater Commission, is considering a public-private partnership (P3) for its sewage treatment system in the communities of Moncton, Riverview and Dieppe.
The Times & Transcript reports, "The federal government has mandated that the waste waters that it, and facilities like it, discharge must meet new standards by 2020. TransAqua has conducted a pilot project that treats water to almost drinking water quality and have decided to implement that piloted system into their treatment facility for the region, which is located in Riverview. But the improvements won't come cheap. Just to meet the new standards will cost at least $75 million. Should they go the public-private partnership route, they will also likely upgrade some other infrastructure at the same time, a more comprehensive project with a total cost of $110 million."
The newspaper notes, "It's a similar model to that which Metro Moncton used when in 1998 it entered into a controversial agreement with Veolia Water to finance, build, manage and operate a water treatment system that still serves the region today."
Council of Canadians water campaigner Emma Lui has written, "Moncton entered into a P3 for their water filtration system with US Filter (which became Vivendi in 1999 and Veolia in 2004) in 1998. There was a later attempt to enter into another P3 with the same company for the upgrading of the city's water distribution, stormwater and sewer systems including pumping stations. CUPE raised awareness on the impacts of P3s and the deal was stopped. Moncton city council also commissioned an independent study showing that it was cheaper to keep the water distribution infrastructure public."
She has also noted, "The contract was awarded in 1998 and between 1999 and 2000, rates went up by 75 per cent. A 2011 PPP Canada Report obtained through an access to information request notes that typical water prices are $0.31 m3 with the average daily domestic use of 343 litres. If we compare Moncton's rates in 2011 at $1.401 m3, they are significantly higher than the Canadian average."
As noted in Critique: A Bridge Over Troubled Water, "A case study published by John and Salim Loxley concludes that despite some advantages for the municipality if the city had raised its own financing it would have saved approximately $8.5 million over the life of the agreement. The private partner received a 24% return on its equity investment. The Loxley's analysis also makes the point that the aforementioned was not fully brought out to the public and it remains unclear how evaluations on the scheme were conducted."
TransAqua intends to decide on this issue by June.
The Council of Canadians Moncton chapter will be writing TransAqua to express its opposition to public-private partnerships.
Lessons from Moncton's water privatization experience (February 2012 blog by Emma Lui)