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North American cities are facing the daunting task of repairing or replacing century-old pipes and valves that make up our water and wastewater systems. The problem lies is finding the financial capital and the political will to pay for neglected water systems. Taxpayers tend to take the flowing taps and flushing toilets for granted. And politicians may not be willing to risk votes by raising water and sewer rates.

In the United States, recent studies estimate that it will take between $150 billion and $1 trillion over the next three decades to upgrade that country’s water systems.

In Canada, the figure lies at $90 billion over the next 20 years.

Atlanta's main source of drinking water - the Chattahoochee River was being polluted by the city's ancient sewage system.

The Chattahoochee River is where Atlanta gets her drinking water, and discharges her wastewater. In the summer of 1998, then mayor Bill Campbell signed a Federal Consent Decree in order to settle a lawsuit brought against Atlanta by people concerned with the constant polluting of the Chattahoochee.

These concerned groups- both upstream and downstream from one of the fastest growing cities in North America- were joined by state and federal environmental protection agencies. (Read more about the environmental lawsuit against Atlanta )

Then Mayor Campbell committed Atlanta to find a way to comply with the regulated amount of bacteria Atlanta could discharge. In other words, he committed Atlanta to finding billions of dollars to replace and upgrade pipes and treatments plants.

Privatizing the water system could defray the millions of dollars Atlanta was paying in environmental fines, and could only help in the future investment to improve the pipes. Clair Muller is Chair of the Utilities Committee and has been a councilmember in the City’s north end for 14 years.

Clair Muller: We knew that that was going to be a huge, huge bill and that was why I think the administration at the time started looking at privatizing the water.

Later that year, Atlanta requested proposals from private water companies to operate and maintain their water system. United Water Services Atlanta (a joint venture between United Water Resources of New Jersey and the French giant Suez) came in with the lowest offer. Their bid would save Atlanta $20 million dollars a year. United Water was granted a twenty-year contract to operate and maintain the water system that serves over a million people.

Atlanta is one of America's fastest growing cities - adding 80,000 people each year.

Joseph Reid was Deputy Chief Operating Officer for Bill Campbell. He remembers that for United Water, and the privatization movement, the Atlanta contract was considered the beachhead for major North American cities.

Joseph Reid: This was post-Olympics which means that it was actually a city that was known world wide now. And it would be a great opportunity for any company to showcase what privatization could do in a city like Atlanta. And this is more or less the Mecca of the south, the capital of the south if you consider it that. So if you could privatize Atlanta, you could go then after Detroit, you know, New York, some of the other cities, other major cities.

By August 2002, the privatization showcase had gone awry. Atlanta was now controlled by a new mayor- Shirley Franklin. She presented United Water and the public with a detailed report that showed United Water was in default of the contract. (see a letter from the City's water commissioner to United Water outlining her concerns )

The City claimed that United Water was not meeting the most basic requirements: That staffing levels were too low; That they had defaulted on a multitude of maintenance obligations That United Water violated state and federal safe drinking water laws. (see attached letter about violation of drinking water laws)

Councilmember Clair Muller began getting complaints from her constituents almost immediately into the new contract.

Clair Muller: We noticed a huge increase in customer complaints – everything ranging from the inability to get water service for a new house to having a meter changed if it was faulty. But more specifically: leaks. We were in a period of drought just about the entire time that United Water ran our system. And citizens just were infuriated by trickling or gushing water that would be running down the street because it seemed like such a waste. We were under water restrictions and yet the water was leaking from the pipes.

Greg Johnson, a resident of Atlanta, noticed a leak in front of his house on the street. There was a small river of water flowing down the street during a time when the city was restricting the use of water to residents. When he called United Water to have the problem fixed no action was taken for months.
(see a letter of complaint written by Johnson to United Water)

A hundred people were ready to move into their high-rise condominiums in the Museum Tower in downtown Atlanta. Developer Satish Lathi discovered there was no water for a sprinkler system. He had to put in a new water line and estimates that he lost nearly $1.5 million. (read Lathi's interview with the fifth estate )

Following the August 2002 report, United Water was placed on a 90-day probation period. By all accounts, United Water did make serious improvements in areas like meter installations, and billing. But it was not enough for the contract to continue.

United Water ran Atlanta’s water system for four years. The final straw came in January 2003 when the City released an audit that showed United Water had failed to save the city $20 million a year.

Clair Muller says customers were disappointed with the service from United Water.

Clair Muller: We were told that they could save us twenty million a year and they only saved us ten. Not only did they only save us ten, but the customer service really dropped dramatically.

In a press statement issued jointly with the City, United Water’s Chairman at the time Michael Chesser said: "
United Water is proud to have made significant improvements to the city's water system including the virtual elimination of an enormous and unexpected backlog."

At the same press conference, a city official said: "
We have a contract that doesn't work; it simply doesn't work…the residents of Atlanta cannot get good water under the contract, and United Water cannot make money under the contract."

Suez, the French company that owns United Water declined to be interviewed by the fifth estate.

Atlanta’s infrastructure faces serious challenges in the future. One of the fastest growing metropolitan areas in North America, with a population of more than 4 million, the greater Atlanta region is growing at an average rate of 80,000 people a year.

As it continues to grow and expand its infrastructure, Atlanta is also charged with finding three billion dollars over the next decade to overhaul its entire wastewater system to comply with environmental laws and upgrades and replacements to the pipes.

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the fifth estate: DEAD IN THE WATER
Broadcast on the fifth estate Wednesday, March 31 2004 on CBC-TV at 8PM

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