October 20, 2009

Yesterday, at a conference on renewing Ontario’s infrastructure, Colin Saunders, the Utilities Manager for Brockton, expressed great satisfaction over his municipality’s partnership with a private water and wastewater operator.

The municipality of Brockton includes the town of Walkerton, where, nine years ago, contaminated water killed seven people and sickened 2000 others. Since the local Public Utilities Commission was clearly not up to the job, Brockton sought experts to run the systems safely and efficiently. For several years, it used the services of the Ontario Clean Water Agency (OCWA). Then, in 2006, after a competitive process that attracted four proposals, Brockton chose Veolia Water Canada to operate its water and wastewater systems.

Brockton is reassured by Veolia’s expertise, its large pool of trained staff, and its presence in several nearby communities. It is impressed by quality control programs that exceed those required by the province. And it is delighted by the significant cost savings offered by the firm.

Municipalities, Saunders explained, “are notorious for inefficiencies.” His was no exception. Brockton and Veolia are now working together to optimize operations, conserve energy, automate systems, and carry out preventative maintenance. With operations and maintenance costs 60 percent below those of OCWA, the municipality expects to save $1.5 million over the five-year contract – savings that it will be able to invest in the system.

Saunders reported that Brockton and its private operator have encountered very few problems in the first three years of the contract. He was clearly enthusiastic about public-private partnerships – especially those that allow municipal governments to access both private capital and operational expertise. His conclusion? They “will have to be utilized more in the future.”

Like Saunders and several other speakers, I also addressed the importance of private capital at yesterday’s conference. In a talk entitled Meeting the Challenges: How the private sector can help solve the problems plaguing Ontario’s water and wastewater providers, I noted that Ontario’s water and wastewater systems are expected to need more than $30 billion over the next 15 years. Using private capital to meet these needs will free up public funds for other purposes, transfer financial risks from taxpayers to the private sector, and ensure that the money is used efficiently.