The Stealthy Corporate Scheme to Privatize Pittsburgh’s Water System

When private companies take over public water systems, service often deteriorates. Pittsburgh could be next.

Doug Shields


It’s no secret that cor­po­ra­tions have their sights set on the Pitts­burgh Water and Sew­er Author­i­ty (PWSA). The pub­licly-owned sys­tem has been in the news for safe­ty vio­la­tions and a lead prob­lem linked to a dis­as­trous pri­va­ti­za­tion scheme just a few years ago.

Pittsburgh knows the perils of privatization.

But bad head­lines don’t cause the pri­va­tiz­ers to give up. If any­thing, they’re get­ting craftier.

The most recent news on this front came with the sur­prise announce­ment in Octo­ber that pri­vate water pow­er­house Aqua Amer­i­ca was buy­ing Peo­ples Gas, which is the local gas com­pa­ny. Why would a water com­pa­ny swoop in to buy a gas com­pa­ny? Food and Water Watch, the advo­ca­cy orga­ni­za­tion I work for, has bat­tled water pri­va­ti­za­tion around the world for over a decade, and that expe­ri­ence leads us to sus­pect this isn’t about tak­ing over a gas com­pa­ny. It’s a round­about plan to pri­va­tize Pittsburgh’s water sys­tem by buy­ing up the gas util­i­ty that has also been tar­get­ing the water system.

For months, Peo­ples Gas had been sell­ing the city on what it was call­ing a strate­gic pub­lic-pri­vate part­ner­ship. The com­pa­ny would replace aging lines and build a mas­sive new treat­ment facil­i­ty to boot — some­how with­out rais­ing rates. As you might expect, the details were scarce.

City offi­cials, includ­ing May­or Bill Pedu­to, have been care­ful­ly and con­spic­u­ous­ly pledg­ing to keep PWSA in pub­lic hands, while appear­ing very open to the company’s pitch. But even if a pri­vate com­pa­ny does not buy the sys­tem out­right, giv­ing a prof­it-seek­ing cor­po­ra­tion pow­er to make key deci­sions or deter­mine user rates is not a part­ner­ship.” It’s a form of pri­va­ti­za­tion, and one that would leave Pitts­burgh res­i­dents pay­ing more while hav­ing less con­trol over their future.

There’s been a flur­ry of cor­po­rate water pri­va­ti­za­tion in Penn­syl­va­nia, thanks to a recent law that fur­ther encour­ages con­sol­i­da­tion and pri­va­ti­za­tion. Aqua Amer­i­ca is one of the key play­ers, and it’s quite pos­si­ble that the com­pa­ny sim­ply deter­mined that buy­ing the local gas com­pa­ny gives it the inside track on the water company.

There’s no doubt that Pittsburgh’s water sys­tem needs seri­ous atten­tion. The scope of the prob­lem might lead some to think that pri­vate water com­pa­nies are the only ones that know how to turn things around. But pri­vate com­pa­nies are not char­i­ties. When a for-prof­it cor­po­ra­tion promis­es to erase debt and replace aging water pipes, we should ask, What’s the catch?”

With bil­lions of dol­lars need­ed to over­haul pub­lic works projects like water or sew­er sys­tems, the privatizer’s pitch can be entic­ing: We’ll make the invest­ments to deliv­er 21st cen­tu­ry ser­vice, and we’ll relieve you of the bur­den of ongo­ing main­te­nance. But the record shows that when pri­vate com­pa­nies take over pub­lic water sys­tems, ser­vice can actu­al­ly dete­ri­o­rate, and those cost­ly upgrades that were promised wind up hit­ting your pock­et­book for many years into the future.

Pitts­burgh knows the per­ils of pri­va­ti­za­tion. After PWSA decid­ed to turn to the Paris-based Veo­lia cor­po­ra­tion to pro­vide man­age­ment ser­vices — under a con­tract that actu­al­ly gave them extra mon­ey for find­ing cost sav­ings” — the results were disastrous.

Thank­ful­ly, oth­er cities are learn­ing from these mis­takes, and are fight­ing back. A com­mu­ni­ty effort in Atlantic City, NJ pro­tect­ed the pub­lic water sys­tem from pri­va­ti­za­tion. And in Bal­ti­more, res­i­dents took a his­toric step this year by vot­ing to ban any sale or lease of their sys­tem, becom­ing the first major city in the coun­try to take such a bold step to pro­tect pub­lic water.

Say­ing no to any form of pri­va­ti­za­tion is the right start. But cities still need to come up with cred­i­ble plans to pro­vide clean, afford­able drink­ing water. Pitts­burgh May­or Pedu­to has been say­ing it could cost $2 bil­lion to replace the city’s crum­bling infra­struc­ture. PWSA recent­ly unveiled its own blue­print that pegged the cost at half that much in just 5 years.

That’s real mon­ey, of course — but the point of throw­ing around num­bers like that can often be to make folks think that the we’re bet­ter off let­ting a pri­vate com­pa­ny fig­ure it out. But the bill to pay for clean water for Pitts­burgh, or any­where else, will come due no mat­ter what. A pri­vate com­pa­ny might promise to do it for less, but rest assured that they have a long-term plan that will cost even more.

Ide­al­ly, the fed­er­al gov­ern­ment would ded­i­cate the resources to improve our nation’s infra­struc­ture. Leg­is­la­tion like the Water Afford­abil­i­ty, Trans­paren­cy, Equi­ty and Reli­a­bil­i­ty (WATER) Act pro­vides a roadmap for tack­ling the clean water cri­sis nation­al­ly. But in the mean­time, Pitts­burgh can pur­sue oth­er ways to find the resources nec­es­sary to get this job done. The city could use munic­i­pal bonds to finance repairs, which is an afford­able and account­able alter­na­tive to cor­po­rate financ­ing. The recent announce­ment that PWSA secured $50 mil­lion from the state to replace dan­ger­ous lead pipes shows anoth­er way the city can get the job done in a cost-effec­tive manner.

Pitts­burgh has made the pri­va­ti­za­tion mis­take already. PWSA belongs to the peo­ple, not Aqua Amer­i­ca or Peo­ples Gas.

Doug Shields is a for­mer Pitts­burgh City Coun­cil mem­ber and the West­ern Penn­syl­va­nia Out­reach Liai­son for Food & Water Watch.
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