Water multinational Suez is no longer welcome in Halifax – and the mayor says going public with the long-awaited harbour cleanup will save millions of dollars.
On Friday June 20, the regional government cancelled its P3 contract with the Suez-led consortium after the French corporation refused to take responsibility for failing to meet environmental standards in the future. Cancelling the dirty deal gives Halifax city council the perfect opening to do the right thing by ensuring Halifax’s sewage system is publicly owned and operated.
The city’s move – and the corporation’s refusal to assume the risks associated with running the sewage treatment system – highlight the dangers of P3 schemes for water or any other public service. Emerging details about the deal’s higher cost and shifting terrain of responsibility and risk serve as warnings for other municipalities.
The corporation was trying to negotiate changes to the contract. Suez reportedly wanted taxpayers to pay any penalties if treated sewage didn’t meet water quality standards in the future. Wanting all of the profits and none of the risk is nothing new when it comes to P3s. Hamilton’s P3 sewage treatment deal left taxpayers on the hook for an enormous sewage spill.
Halifax mayor Peter Kelly told the media that tearing up the contract would save taxpayers millions of dollars. “What we’ve now managed to do is take out the middleman…get rid of their profit margins,” he was quoted as saying.
CUPE was one of the P3 scheme’s strongest critics, as part of a local Water Watch coalition. CUPE is urging city officials to go public with a sewage treatment system that’s publicly owned, managed and operated. Suez, operating under its North American name United Water, headed up the consortium that was awarded the $465 million contract. The city’s decision to back out is a reminder that even once a P3 has been signed, there may still be ways to tear up the contract.
The harbour cleanup is long overdue, with strong community pressure to end the practice of dumping raw sewage into Halifax Harbour. But the community did not endorse privatization as the solution. The P3 negotiating process lacked transparency, accountability and clarity (for background on the harbour cleanup deal, read the chapter in CUPE’s 2002 Annual Report on Privatization, available at (http://www.cupe.ca/www/ARP2002Halifax).
The P3’s cancellation also opens the door for improvements in the environmental standards and technology being used to treat the city’s sewage. Another major outstanding issue is a human rights complaint about the siting of one plant, which was planned for a low-income community with a high percentage of residents of colour.