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Victory to Consumers as Atlanta Ousts Failing Private Water Company

Jan. 24, 2003

Victory to Consumers as Atlanta Ousts Failing Private Water Company

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

The corporate effort to privatize water and wastewater systems in the United States suffered a severe blow Friday when the administration of Atlanta Mayor Shirley Franklin ended the biggest water contract in the nation.

The mayor announced today that the city would no longer entrust its water system to United Water, a U.S. subsidiary of Suez, a French conglomerate. Franklin’s decision followed a series of audits and reports showing that United Water failed to live up to promises made when the city privatized operation of the system in 1999.

United Water and the rest of the private water industry touted the company’s contract in Atlanta as the wave of the future. But the company’s debacle in Atlanta has instead become a powerful warning for communities across the nation of just how empty privateers’ promises can be. The city found evidence that United Water failed to perform maintenance, billed the city for work it didn’t do, ignored customers’ cries for service, cut staff to dangerously low levels and occasionally delivered filthy, brown water. While failing to fulfill its initial promises to the city, United Water even had the gall to ask the city for more money.

Public Citizen has encouraged Atlanta officials to follow the example of other communities across the country that have addressed waterworks problems without gambling on a private company. Those communities have reviewed their systems from top to bottom, renegotiated costs, provided employee incentives to reward innovation, and established clear goals and measurable means of accountability. Phoenix, Nashville, San Diego, Miami and other cities have saved money while maintaining or improving water quality and protecting the environment. Instead of draining money from the community to line corporate coffers, the savings are used to stave off rate increases, hold down system debt and reward employees, or are otherwise re-invested in the community.

Those results stand in stark contrast to United Water’s performance, and should be encouraging to Atlanta and city officials nationwide as they look ahead.