July 22, 2019

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City, Veolia sign 30-year pact

Even critics happy with consulting deal on sewage upgrades

Hey there, time traveller!
This article was published 20/4/2011 (3015 days ago), so information in it may no longer be current.

The long-simmering Veolia Canada controversy is suddenly dissipating at city hall as supporters and detractors of Winnipeg's deal with the environmental giant are now praising aspects of the 30-year consulting contract.

Since May 2010, water and waste officials have been in talks with Veolia to work out a plan to complete a trio of sewage-treatment upgrades and provide advice about the operation and maintenance of the new facilities for decades to come.

The city sought the help of the world's largest environmental firm in an effort to avoid the communication and design errors and that helped drive up the price tag for upgrades at the West End Water Pollution Control Centre to $47 million from $26 million.

On Wednesday, the city completed the Veolia deal and made the plans public. It got positive reviews from opposition councillors who originally decried the deal as a possible prelude to the privatization of city facilities.

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Hey there, time traveller!
This article was published 20/4/2011 (3015 days ago), so information in it may no longer be current.

The long-simmering Veolia Canada controversy is suddenly dissipating at city hall as supporters and detractors of Winnipeg's deal with the environmental giant are now praising aspects of the 30-year consulting contract.

Since May 2010, water and waste officials have been in talks with Veolia to work out a plan to complete a trio of sewage-treatment upgrades and provide advice about the operation and maintenance of the new facilities for decades to come.

Coun. Jenny Gerbasi: ‘it’s a victory’

Coun. Jenny Gerbasi: ‘it’s a victory’

The city sought the help of the world's largest environmental firm in an effort to avoid the communication and design errors and that helped drive up the price tag for upgrades at the West End Water Pollution Control Centre to $47 million from $26 million.

On Wednesday, the city completed the Veolia deal and made the plans public. It got positive reviews from opposition councillors who originally decried the deal as a possible prelude to the privatization of city facilities.

The final deal will see four to 15 Veolia staffers work in Winnipeg at any given time during the next 30 years to help design, build, manage and obtain materials for sewage-treatment plants that will remain owned by the city and operated by city staff, said Bryan Gray, the city administrator in charge of the project.

The city and Veolia will jointly lay out project goals every year and report those plans to council. Either party can back out of the deal at any time, with or without cause, although ending the deal without cause would cost the city $5 million and Veolia $10 million.

"In a way, it's a victory," said Fort Rouge Coun. Jenny Gerbasi, who had been a vocal opponent of the deal. "Thanks to a lot of public pressure, what was first proposed has been scaled right down. The projects will be publicly run, owned and financed."

At the same time, the scope of Veolia's work has increased. The cost of the three new facilities to be built with the company's help — upgrades at the North End and South End water pollution control centres and the construction of a new biosolids plant — have increased $90 million to $751 million.

Another $219 million worth of sewage-treatment projects listed in the capital budget may also be executed with Veolia's help, water and waste director Barry MacBride confirmed. This could bring the cost of the deal to $970 million over the next six years.

Veolia's compensation will be fraction of that sum. Veolia's earnings will depend on how well the company brings operating and capital costs in below projections, said Moira Geer, Winnipeg's acting chief financial officer. The company will also receive compensation for exceeding targets in non-financial areas such as workplace health and safety, greenhouse-gas emissions and waste reduction.

Under the unusual terms of the pact, Veolia will not receive a penny until its pool of compensation exceeds the potential cost overruns for the project. Until then, Veolia's earnings will sit in an account, Geer said.

Veolia does expect to make money — just not in the short term, said Mark Sanderson, the firm's Ontario-born, Indianapolis-based vice-president in charge of major projects.

He praised the deal as a "Winnipeg model" that may be adopted in other North American cities once they realize they can enlist the expertise of multinational environmental firms without giving up ownership and control of their facilities.

Winnipeg Mayor Sam Katz, who spent much of his 2010 re-election campaign defending the Veolia deal, said he hopes it is clear Veolia is sharing both the risks and rewards associated with the sewage-treatment upgrades.

"This is a really good deal for the city," Katz said Wednesday, expressing relief some of his critics are cautiously on side.

"For a long time, there were some councillors and others that were spreading lies about privatization. That wasn't the case," he said.

However, the mayor acknowledged the city opened itself up to criticism by publishing an unacceptable plan for a private partnership in 2009.

Gerbasi said it is important to monitor the final arrangement to ensure it remains transparent and accountable. "We still have a 30-year contract," she said.

bartley.kives@freepress.mb.ca

 

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