Reform, Not Privatization, Should Be Top Priority in New Orleans

Feb. 20, 2003

Reform, Not Privatization, Should Be Top Priority in New Orleans

 

Statement by Wenonah Hauter, Director, Public Citizen’s Critical Mass Energy and Environment Program

Mayor Ray Nagin’s administration and the New Orleans Sewerage and Water Board (S&WB) are putting the cart before the horse by revisiting the privatization of water and sewer services. As part of a citizen coalition that successfully encouraged the S&WB to reject privatization bids in 2002, we remain concerned that the mayor and board are ignoring a host of critical questions:

  • How much will this cost? At its Feb. 19 meeting, the board authorized the expenditure of $250,000 to draft a new request for proposals (RFP). Will $250,000 adequately cover the cost of analyzing, reviewing, taking public comment and revising the draft into a final document? How much more will it cost to review bids, allow and enable public employees to prepare a bid, comply with statutory requirements regarding review and public notice, put any contract before the voters for approval and meet the other costs associated with the process of selecting a bid and awarding a contract?

 

  • The mayor says he wants the process to take only 90 to 120 days. Doesn’t this indicate a desire to rush the process without adequate citizen participation?
  • Are city officials heeding the lessons from Atlanta’s failed privatization experiment, and what assurances do citizens have that New Orleans won’t suffer the same problems as Atlanta? Is anyone concerned that Atlanta’s experiment – the largest in the nation – failed? If not, why not?
  • Will private companies other than United Water and USFilter, the companies whose bids were previously rejected by the board, be allowed to bid in the new RFP?
  • Given its dismal performance and the loss of its headliner contract in Atlanta, will United Water have to re-establish its suitability as a credible bidder? If not, why not?
  • Will USFilter, which has undergone a dramatic restructuring to distance itself from a debt-choked corporate parent flirting with bankruptcy, have to re-establish its suitability as a credible bidder? If not, why not?
  • Why isn’t the board giving full and serious consideration to re-engineering the current system before returning to the already-rejected privatization process?

The details of this new foray into privatization haven’t been thought out. Information is being meted out to the public in bits and pieces about a process that appears to be moving forward in a haphazard fashion. This comes as the Atlanta privatization fiasco underscores the importance of thorough and open review. Questions abound, inviting suspicion at a time when the mayor is fostering the image of an administration committed to rooting out corruption and ending backroom deals.

For months, Public Citizen has urged New Orleans’ officials to seriously consider proposals to restructure and reform a publicly operated, combined water and wastewater system. Other cities following a similar course have retained local control and accountability and saved money. A comprehensive re-engineering plan has been prepared, but the S&WB has failed to give that plan formal consideration.

Why is the board even considering privatization when it has yet to explore the most attractive option on the table? It’s yet another unanswered question surrounding privatization’s mysterious rise from the grave.

###