The Privatization Factor
It appears that the Willamette Water Supply Agency is pushing for "privatization", whereby a private company acquires or shares ownership of a public water provider. Thus the long term goal of those building the plant may be to sell all or part of it to a private outside interest.
At the Oct. 27, 1998 Technical Advisory Committee Meeting (of the Regional Water Consortium), it was mentioned that Carl Talton, Portland General, had met with the Portland Water Bureau and asked about the possibility of Enron involvement in a regional water transmission system.
A Nov. 10, 1998 article in the Wall Street Journal discussed how Enron spent 2.2 billion to acquire Wessex Water PLC of Britain, and is vying for water privatizations in Rio, Berlin, and Panama. Enrons Chairman predicts that water soon will be as important to Enron as its core natural gas and electricity business.
At the Dec. 9, 1998 Intergovernmental Water Board meeting, Tigard Public Utilities Director Ed Wegner presented the Board with a couple of the articles from the Wall Street Journal and an article titled Management from the Buyers Perspective on Electricity. He requested that the Board review this information and become aware of the growing issue of privatization. He said that there are a couple of companies currently in the United States buying water plants and offering incentives, United Water who bought out Atlanta, Georgia and Enron. He said Enron is currently in the Portland area and have begun attending Water Consortium staff and Board meetings.
The following is from an article in the Feb. 9, 1999 Oregonian (Southwest
Neighbors edition) about Wilsonville mayor Charlotte Lehan and her comments during a
Regional Water Consortium Meeting:
What no one mentioned was the looming presence of Enron Corp., the giant, Texas-based owner of Portland General Electric that wants to become a major player in Northwest water issues. No one, that is, until Wilsonville Mayor Charlotte Lehan brought the discussion to a screeching halt by tossing the companys plans onto the table: It is considering the Portland area as a test site for the companys first foray into water treatment and transmission systems. It wasnt the first time that Lehan, an activist mayor with longstanding environmental credentials, has quieted a roomful of elected officials by broaching a topic no one else wanted to mention. "I seem to bring up things everyone else has agreed not to talk about," Lehan says . "I guess the others just view me as someone whos not sophisticated enough to know I wasnt supposed to bring it up."
At the March 3, 1999 Regional Water Consortium meeting, WWSA director Kevin Hanway commented on the increasing interest in potential privatization of public water utilities. He reported that WWSA is coordinating and largely funding a workshop on this subject. The work shop will be conducted by consultants and will provide a primer on how private companies view public utilities assets and operations, and how these companies might approach public water utilities to discuss privatization and partnership possibilities. The workshop will be held in May, 1999. Invitations to the Consortium member agencies are forthcoming.
The above meeting was held May 24, 1999, at the Sweetbrier Inn in Tualatin. The presentation was made by a panel of three speakers from CH2M HILL (from Denver, Seattle, and Austin, TX.), and also three speakers from CH2M HILLs sister company - OMI. The meeting was not open to the public.
The first part of August, 2000, a committee of officials from
Wilsonville, Tualatin Valley Water District, and the plant's designer-builder,
Montgomery Watson, selected USFilter to operate the treatment plant.
USFilter is based in Palm Desert, Calif., and specializes in running water
treatment facilities for municipal and other customers. According to
their web site, the company has a particular interest in privatizing water
treatment facilities owned by municipalities. (see the company
description at the top of their web site home page by clicking on the icon,
below). USFilter is wholly owned by one of the largest companies in the
world - Vivendi - a French company with $23 billion in anticipated annual
sales. USFilter's local offices are in Vancouver, Wash., and they will be
involved in overseeing the construction of the treatment plant in Wilsonville.
There is some speculation that USFilter will end up owning the Willamette plant (if it is built). The agreement between TVWD and Wilsonville states:
AGREEMENT REGARDING WATER TREATMENT PLANT DESIGN, CONSTRUCTION, OPERATION, AND PROPERTY OWNERSHIP: 2.1.3
TVWD's 49% ownership interest may be conveyed in whole or in part by TVWD, with prior approval by Wilsonville to WWSA for a period of one year (365 days) from the effective date of this Agreement, and thereafter without prior approval by Wilsonville; provided, however, WWSA's membership remains one of local governments and water districts. Neither Wilsonville nor TVWD shall convey to any person or entity which is not a local government or water district without the consent of the other. Each party's consent shall be based on its sole discretion on whether an allocation or conveyance to an entity other than a local government or water district is in the best interest of, in the case of Wilsonville, its citizens and, in the case of TVWD, its customers. Nothing in this paragraph is intended to prevent TVWD from conveying to Wilsonville or Wilsonville from conveying to TVWD its respective interest as the parties may agree in the future.
The US is currently negotiating a trade agreement - the General Agreement on Trade in Services (GATS) - a sub-agreement of the World Trade Organization. There is concern that some of the language in the new agreement, if adopted, could mean that if ownership of a water resource is transferred to a foreign corporation or foreign investor, the public will not be able to take it back without reimbursing the corp. or investor for lost profits, for a period of some years. Otherwise, the public entity could be required to pay huge fines over the same period of years. These trade agreements are Measure #7 on steroids for foreign corporations and investors, though not for domestic firms. Depending on when the ownership transfer takes place, GATS might or might not apply. For more information regarding this, see the articles below titled: The Blue Planet Project, Water Water Everywhere, The Fight for Liquid Assets, Blue Gold, Don't Let the WTO Get Hold of Water, and GATS Handbook Excerpt.
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