Three-firm race for water job

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The South End Water Pollution Control Centre, one location where a firm is sought to partner with the city’s new utility. (RUTH.BONNEVILLE@FREEPRESS.MB.CA)

A French water company founded by Napoleon III, a Missouri firm that does nuclear cleanup and a Colorado company that built an Indian sulphur refinery are the final candidates to become the "strategic partner" with Winnipeg's new water-and-waste utility.

The Canadian subsidiaries of French consulting firm Veolia -- the world's largest private water company -- and American engineering firms CH2m Hill and Black & Veatch are in line to become partners with the city's utility to complete $615 million worth of sewage-treatment upgrades.

Winnipeg is in the midst of a $1.8-billion waste-water upgrade that will take decades to complete. In an effort to keep costs down, it's looking for a private engineering firm to get into a joint venture with the city at the North End and South End Water Pollution Control Centres and potentially own up to 49 per cent of a subsidiary of Winnipeg's forthcoming new utility.

According to a memo obtained by the Free Press, city waste-water experts and external lawyers selected Black & Veatch Canada, CH2m Hill Canada and Veolia Canada from a short list of six firms. All three are Canadian subsidiaries of international companies with thousands of employees working on projects around the world.

Each must now submit a final proposal to become a strategic partner with Winnipeg's new utility, project co-manager Moira Geer told water-and-waste employees last week.

Although city council approved the creation of a new water, sewer and solid waste utility in July, Winnipeg will not dissolve its water-and-waste department and create the company until the province signs off on the deal.

But the "strategic partner" component of the plan remains contentious, as city officials have had difficulty explaining why a private engineering firm would be interested in getting into business with the new utility when it can not actually own any of the facilities it would help build.

Since early 2008, city officials have touted the strategic partner as a way of preventing or at least reducing cost overruns at the sewage-treatment projects. Winnipeg chief administrative officer Glen Laubenstein and Mayor Sam Katz have said future sewage-plant overruns could be eliminated if a private engineering firm has "skin in the game" by assuming some of the risk involved in the upgrades.

Their prime example has been the West End Water Pollution Control Centre, whose budget ballooned from an original projection of $26 to $47 million by 2007, when a water-and-waste report blamed up to $12 million of the cost overruns partly on "design errors, incomplete design and design clarification" conducted by private consulting firm Earth Tech, now known as AECOM. The city and AECOM are still negotiating some form of settlement.

But according to a source close to those negotiations, the city only stands to recover $2.45 million at most from AECOM, as most of the West End overruns resulted from construction inflation, changing design specifications and overly optimistic cost projections.

"What really gets me is the city is responsible for most of the cost overruns and it appears they're trying to place the blame on the private sector," the source said.

bartley.kives@freepress.mb.ca

Potential utility partners

The Canadian subsidiaries of three environmental engineering firms have been placed on a short list to become a "strategic partner" with the city's new utility, when the time comes to complete upgrades planned for the North End and South End Water Pollution Control Centres. Here's who they are and what they do:

Black & Veatch

Founded: In 1915, in Kansas City, Mo., where its corporate headquarters remain to this day.

Today: Employs 9,600 people in 70 countries.

Sample projects: A sulphur refinery in Jamnagar, India, a power plant in Kabul, Afghanistan and a water reservoir tunnel in Chicago.

In its own words: "Black & Veatch specializes in infrastructure development in energy, water, telecommunications, federal, management consulting and environmental markets. We offer leading experience in the market segments we serve, understanding our clients' businesses and objectives, and having the financial resources sufficient to execute and sustain projects from the most basic to the very complex."

CH2m Hill

Founded: In 1946, in Corvalis, Ore.

Today: Now based in Denver. Employs 24,000 people in 116 countries around the world.

Sample projects: The expansion of the Panama Canal, the development of Masdar City -- billed as the "world's first fully sustainable city" -- in the United Arab Emirates and a biological manufacturing facility for Human Genome Sciences in Rockville, Md.

In its own words: "From chemical plants in Buenos Aires to super cleanrooms in Japan, from nuclear cleanup in Colorado to wastewater treatment plants in New Zealand, CH2m Hill's project experience and the markets it serves are as diverse as the world itself."

Veolia

Founded: In 1853 in Lyons, France, as Compagnie Générale des Eaux, by an imperial decree from Napoleon III.

Today: Based in Paris. Employs 270,000 in at least 64 countries. It became Veolia in 2005.

Sample projects: A new water and water-recycling facility for Brazilian oil and gas company Petrobras, a water-treatment plant in Goalmari, Bangladesh and an effluent-management system for the Pilsen brewery in the Czech Republic.

In its own words: "Specializing in the outsourced management of water services for municipal or industrial clients, (Veolia) is the world leader in engineering, design and execution of construction projects for turnkey facilities and water treatment plants."

Republished from the Winnipeg Free Press print edition September 22, 2009 B1