The Winnipeg Water Privatization Empire strikes back...

Last July, Winnipeg became a hotbed for governmental controversy, as the city proposed uniting with a private partner to build and manage its water and waste-water systems. The anti-privatization folks jumped all over it as some councillors even went so far as to say nothing would be decided without a referendum. The deal, although mired in confusion and unknowns, was essentially to create a public-private utility whereby the city would continue to wholly own 100% of the assets, while the private partner would be entitled to much of the revenue from the projects.

Up until the past few days, the proposal kind of fell off the radar. But in what the Winnipeg Free Press is calling a "secret water deal", the fight is right back on. Only this time, the deal is a little more advanced. Instead of creating this formal utility, the city is simply proposing to contract a private developer to design and build $661 million in upgrades to two waste-water treatment plants. The kicker is three-fold.

First, the private developer is a company known as Veolia. Though North Americans would likely shrug their shoulders at the name, others throughout the world will undoubtedly recognize the firm. Veolia is huge and manages the water systems of regions all over the world, primarily in Europe, where it is based. In 2009, it had profits -- profits, not revenue -- of over $580 million. They are perhaps better known by their former title, Vivendi. When people like Maude Barlow talk about water being privatized, Veolia comes up first. Winnipeg is not dealing with an upstart company, but rather one of the world's largest private water companies.

Second, the deal is not simply to build and design the facilities. Rather, Veolia has agreed to manage and run the facilities for 30 years. The city is happy about this because it will save them over $1 billion in operating costs and you can imagine Veolia is happy about it, too. When you manage and run something in this business, you tend to reap much of the reward, which in this case, means revenue. And lots of it.

Third, the report that the council cabinet approved is only nine pages long. What?!?! My rental agreement living in residence a few years ago was longer than that. You're dealing with one of the biggest companies in the world, dealing with water services and a contract that is worth at least $661 million, and all you have to show for it is nine pages? There is no mention of how much profit Veolia might make and no mention as to guarantees in operating income and what might happen if those guarantees aren't met. Theoretically, if Veolia doesn't meet its targets, the city could be sued. Even the pro-privatization mayor, Sam Katz, claims he hasn't been given the full financial figures -- at least publicly. And get this, a representative from the Canadian Taxpayers Federation -- which loves privatization -- rejects the proposal because of how secretive it is. He likes the idea, but worries that the "devil is in the details".

To go ahead and vote on such a major deal with only a nine page report is outrageous. And I suspect Veolia is just electing to get their foot in the door in Winnipeg. When the major water infrastructure renewal needs come a barking, which will undoubtedly be sooner rather than later, don't be surprised to see Veolia at the front of the line.