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 Montreal municipal workers, members of CUPE 301, are crying foul over a major conflict of interest - and hidden privatization agenda - in contracted-out water operations.

According to media reports BPR, the firm advising the city on its biggest contract to date, has close ties to Dessau-Soprin. Dessau-Soprin is a partner in Génieau, the consortium that was awarded the water contract.

Montreal’s outside municipal workers aren’t impressed. “How can we expect the best price on the best terms in a context like this? And what must the opponents of water privatization think when they see this contract and who’s involved here? Pals awarding contracts to their cronies is a far cry from serving the public interest,” says CUPE 301 president Michel Parent.

  • Update: Le Devoir reports that the city official responsible for water, who worked on contract negotiations with BPR, has jumped ship to BPR. CUPE Quebec is calling for legislation that would prevent conflicts of interest like this.

The city has handed the water file to a ‘Projects Office’ that’s closely-connected to the private sector and independent of the municipality’s daily operations. Water coalition Eau Secours says this office will play the same role as Quebec’s provincial P3 agency.

Under the contract, the private sector - not city workers - will maintain water meters. In the second stage of the contract, Génieau will install water valves to control the flow in underground pipelines. The corporation will own this high-tech equipment and run it exclusively for 25 years.

Further muddying the waters, an accounting firm heavily associated with privatization contracts and P3s is in charge of the contract’s financial analysis, without any consultation with the city’s finance department. The city’s legal department wasn’t consulted in drafting the contract. In addition, BPR has connections with water privateer Bechtel, infamous for sparking the Bolivian water wars.

The move runs counter to events in the Montreal municipality of Westmount, where water operations were recently contracted in. CUPE and Eau Secours worked together against the Westmount P3, where Génieau partner Dessau-Soprin was the contractor

While municipal administrators said they had no complaints with the service level, they realized they could save $200,000 a year by bringing operations back in-house.

Eau Secours points to several other municipalities including Paris, where the mayor plans to bring water operations back in house after 2008 municipal elections. The return to public water will end a long-standing P3 with the world’s two largest water multinationals. Recent studies show that privatized water in France costs citizens more than public water, allowing corporations to reap ‘astronomical profits’.

A recent poll for the pro-P3 Institut pour le partenariat public-privé showed 65 per cent of Quebecers oppose water privatization.

When we see our municipal authorities toying with separating water management from other City services and handing it over to a paramunicipal corporation, we have to ask ourselves if the Tremblay-Zampino administration is trying to privatize Montreal’s water management through the back door, because they know citizens will oppose it coming through the front door. And if that privatization starts out with a blatant conflict of interest, it certainly does not bode well,” says Parent.