Watchdog Group Has Its Eye On Veolia, City's New Water Division Consultant

It's important to make clear that St. Louis' new contract with Veolia is not privatization, but rather something called "Peer Performance Solutions," according to a Veolia spokesperson. Over the next five years, a Veolia team will recommend various cost-saving measures for the water utility and help oversee their implementation. The company will be paid an upfront fee to start; the rest of its pay is contingent on the savings it is able to procure. According to the bid, Veolia believes its ideas can save St. Louis between $8.2 and $15.1 million over the course of five years. The bid says repeatedly that Veolia will not use layoffs as a means to save money. The company will assess everything from leaks to metering to chemical costs to power usage, according to the bid. The project will be overseen by a steering committee made up of Veolia officials, St. Louis' Chief Operating Officer Sam Dotson, and appointees from both the Board of Aldermen and the city comptroller. (We've attached the entire 124-page bid to the end of this post.)

Jeff Rainford, chief of staff for Mayor Francis Slay, says that Veolia is here to help the water department avoid massive rate hikes. He says escalating costs of treatment chemicals, plus the fact that the city has two water treatment facilities but not enough paying customers to justify their size, has the city on the path to jacking up water rates four-fold. He says Veolia will bring "new ideas" to the table.

He is also emphatic that this is not a step toward privatizing the utility.

"The city charter does not allow St. Louis to sell or lease or give away or in any way not control the water division. What you can help with," he tells Daily RFT, "is rumors that somebody is spreading for some reason other than the good of the city that this is some secret deal. It's not anything like that. There's nothing in the RFP that could lead anyone to that conclusion."

As for charges that Veolia has not acted responsibly in other markets, Rainford says he doesn't know who Food & Water Watch is affiliated with and can't respond to its allegations. He points to a pre-existing relationship between the City of St. Louis and Veolia as proof that the company is trustworthy.

"We have dealt with Veolia with the downtown steam loop and they have acted honorably, honestly, and above board," he says. " So I'm not going to argue with someone I don't know."

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