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Will the Detroit water department be privatized?

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Photo: Peoples Water Board Coalition

There have been ongoing concerns that the Detroit Water and Sewerage Department could be privatized.

In June, the Detroit Free Press reported, "[In March, Detroit emergency manager Kevyn] Orr began exploring a public-private partnership to run the [Detroit Water and Sewerage] department. The city issued a request for information seeking proposals from private companies." At that time, USA Today reported that Orr confirmed that he had taken bids from two large American private water companies to manage the water department. "A spokeswoman for one of the companies, New Jersey-based American Water, confirmed it's in discussions with Orr but declined further comment. Another large water company, Veolia Water North America in Chicago, didn't return phone calls."

This week, Global Water Intelligencer reports, "Detroit has hired Veolia to undertake a two-month study to identify cost savings at its water and wastewater utility as part of ongoing negotiations to form a regional water authority." GWI speculates, "The deal would appear to lessen the prospect of a full-scale privatisation of the Detroit Water and Sewerage Department, particularly since Veolia confirmed to GWI that it does not intend to pursue a subsequent contract to implement any efficiencies it finds." That "confirmation" bears scrutiny.

The Detroit Free Press reports on a broader context to this story. "After the Detroit City Council refused to support a $48-million no-bid contract with a consultant proposing massive job cuts, the Detroit Water and Sewerage Department board hired the consultant, anyway, approving a series of less valuable contracts small enough to avoid the council's scrutiny. ...The contracts with EMA, based in St. Paul, Minn., are designed to help the water department undergo its own internal restructuring by evaluating job descriptions, the department's information technology network and assets of the water system. ...A union official representing about 730 water department workers said the maneuver is troubling."

The newspaper adds, "Veolia Water, another consultant, is now on the way to evaluate the water department's operations and its optimization plan. ...Although water officials have avoided connecting Veolia's work to the city's bankruptcy case, Orr's spokesman said last week that Veolia's review is, in fact, tied to the negotiations for a regional authority. The water department is not paying Veolia; the state is picking up the tab. A spokeswoman for Gov. Rick Snyder said she could not discuss the Veolia contract due to a court order that water negotiations remain confidential."

Here we need to keep in mind that USA Today reported in June that, "Michigan Gov. Rick Snyder said ... in the absence of an agreement among city and suburban leaders on creating a regional authority to run Detroit's water department, his state-appointed emergency manager has the duty to seek private bids from companies willing to manage the system." And Al Jazeera America cautioned in an article in early August, "Mayor Mike Duggan has a history of supporting privatization, with the sale of the nonprofit Detroit Medical Center to a for-profit hospital conglomerate in Virginia."

Photo: Peoples Water Board Coalition

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