It was 1997, and Campbell saw his city's water system sucking tens of millions of dollars out of municipal coffers every year. At the same time, Atlanta's ancient pipes sprung depressingly regular leaks and begged for massive renovations.
Campbell also knew that Atlanta's 700-plus employee Water Department was the regular target of press broadsides and chiding from the public.
It was, he said, time to privatize. In speech after speech, Campbell told Atlantans that efficiency and savings would follow.
Today, in the fourth year United Water Services Atlanta has run the city's water system, some savings may have materialized but efficiency is another story. In many important ways, it's tough to tell the difference between today and 1997. The main difference between then and now is that the entity losing money every year isn't the city of Atlanta.
In fairness to Campbell, he wasn't alone among American mayors looking at price tags and reaching for the magic wand of privatization.
According to a report cited by the Ralph Nader-affiliated Public Citizen, it's estimated that American cities would have to spend $23 billion annually during the next 20 years to repair their water systems. The federal government isn't doling out money to municipalities to cover those costs. What's more, in other cities, especially Indianapolis, the government has saved tens of millions of dollars and residents have enjoyed better service. Those cases were cited as proof that privatization could work.
But so far in Atlanta, the answer that was supposed to solve all the problems has only resulted in more questions. The experiment just hasn't worked, and there's just no sight of the promised land of privatization -- cheaper, more efficient services. The city's 650-square-mile crazy quilt of 2,500 miles of pipes, some as archaic as the century-old system itself, still springs leaks with Old Faithful-like regularity.
Customer service, and by extension, United Water itself, has become a well-known public joke. Repair times for broken pipes and busted meters often stretch to as much as two months, while precious water dribbles away. Maintenance inside the plants hovers at a completion rate of around 50 percent. And under the current contract, the city, which isn't sure how much money privatization has saved, can't do much about it.
Meanwhile, water system employees, their numbers more than halved since privatization, have filed a complaint with the federal government over their treatment.
But the water company isn't happy with Atlanta either. In December, United Water claimed it deserved $80 million -- a sum almost equal to the recently discovered city budget shortfall -- to reimburse it for expenses beyond the scope of the contract with the city. The payment was nixed at the 11th hour by Atlanta Water Commissioner Remedios del Rosario.
But United Water's new CEO, Michael Chesser, told United employees a few weeks ago that the company has been losing money in Atlanta. The company isn't giving up its claim for the $80 million.
All of this adds up to potential danger for United's customers. When the company that controls the city's water can't keep up with its workload, is losing money and employing an unhappy group of workers, it increases the likelihood that something will go wrong with that water.
Certainly, there's a confrontation looming over the performance of United Water, and it should make for compelling political theater during the next few years as council members who have wanted to tangle with United's contract since the day it was signed finally have a mayor willing to examine whether both sides of the dispute are performing the way they should.
The city's decisions, just like the choice to privatize, will be landmarks for local governments across the United States.
It's become a familiar refrain: Water is the new oil.
So it's no wonder that companies around the world would want to be the new British Petroleum or Shell Oil. The French company Suez, which bought United Water in July 2000, is clearly in the queue for that 21st-century corporate stardom. Suez's "water solutions group," ONDEO, already has annual revenues that top $8 billion. United Water, the New Jersey-based member of ONDEO, serves 110 million globally.
When the company first came to the city of Atlanta in 1998, though, it was still just United Water.
To the firm's executives, the city must have seemed like a good candidate for saving. The department, whose water and sewer fees generated about $130 million last year, was looking at the prospect of increasing rates at least 30 percent to cover operational costs at the same time it faced major capital improvements such as the replacement of 3 million feet of ancient pipe. Making matters worse was its less-than-stellar customer service reputation, and the city's unwillingness to offend voters by collecting on $30 million of outstanding water bills.
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