What’s The Worst That Could Happen If We Get A P3? – An Interview With Maude Barlow

Regina Water War - Referendum 2013

I interviewed Maude Barlow, the national chairperson for the Council of Canadians, for our upcoming issue. She was in town to take part in a forum put on by Regina Water Watch concerning the upcoming wastewater referendum, and as we were putting together a list of questions about P3s and wastewater I figured she was a good person to turn to for answers.

I only used a few quotes from her in the final article so I’m posting the entire interview below…

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Prairie Dog: What would you say is the worst thing that could happen if the No side wins and the P3 goes through?

Maude Barlow: My guess is it’ll be revisited in five years because all over the world when municipalities are coming into contracts with public-private partnerships they’re questioning it within a few years. Everybody’s been talking about the immediate cost and the arguments been going back and forth. But what we have to remember is over the life of the 30-year contract, paying high water rates by the people of this city, that’s the cost, that’s the issue. And people have got to start to realize what looks like some free money — in this case from the federal government and in other cases the company itself puts the big investment in — once they’ve paid back their investment they’re free to rake in profits as long-term high water rates. And it’s not going to take people here very long to realize that that’s the case.

I quoted a study from the U.S. that found that private water rates, or water rates in privatized systems, are 50 per cent higher for the water delivery and 30 per cent higher for waste water delivery than public systems. Somebody asked me to point blank explain the difference between private and public and I said, profit. That’s the difference. In a public system, it’s the same amount of money; you’re raising it from taxes or you’re raising it from water rates, water services. And so the same amount of money has to cover for a private company not only the supposed delivery of whatever services they’re delivering but profit for their investors. Something has to give. And that’s the fundamental difference. It doesn’t take long for most municipalities to figure that out. Often, the company comes back — this is just standard — the company comes back to the local municipality and says, Gee it’s more expensive than we thought and we’re in cost overruns and we have to charge more, we can’t keep going. So, they either back out of it, or the city backs out of it or renegotiates and gives them more money. This is just classic.

The sun won’t stop shining the day after. But we will lose piece by piece control of our water systems in this country if people let the Harper government bully them into public private partnerships.

 

PD: But the thing we keep being told is that the big advantage to the P3 is cost — water rates will be set in advance, the Sewage Consortium won’t be able to adjust them, the Consortium will bring innovation and efficiencies that will more than offset their profit margin — everything we hear is that the costs are smaller with the P3.

MB: That’s just nonsense. There’s obviously no reason to think that a private company is any more efficient than the public company. If in fact they were to set rates and the municipality were not to budge, then you’d start to see declining services because the company simply has to make money, they have to make profit and something would go.

On average what goes is 30 to 50 per cent of the workforce. When you have a broken sewer line down the way it doesn’t get fixed that day. The water coming out of your tap, you’re not very happy with. It may be a week before someone comes to fix it. This is the story around the world of privatized systems. The only way they can keep up with the public system is to keep raising water rates. So they either cut their workforce in half or 25 to 35 per cent. Or they cut services. You simply cannot as a for-profit entity do the same job and find a 15-20 per cent overhead profit to send to your investors and not have something giving. It’s just a fallacy that the private sector can do it better than the public sector. If the job is done properly, it’s done properly.

I’m not saying the private sector can’t do it properly. But even if they do it properly they have to find that overhead for the profit and that’s the essential difference here.

When they talk about innovation, I can tell you that innovation around the world is where pollution abatement has been cut, it’s where services have been cut. This is just all gobble-di-gook to sell to an electorate who maybe hasn’t had time to really think this thing through or doesn’t have all the information. There’s absolutely no evidence whatsoever that they’re going to be able to do anything any more efficiently than the system we have currently.

 

PD: Seeing as the people on our council and in our administration aren’t stupid people, if the P3 is such a bad deal, why are they so convinced it’s the way to go?

MB: I think you just jump in on a bandwagon and you kinda don’t know how to jump off. Know what I mean? They just got gung-ho and they like that money from the federal government and it’s an enticement.

And it feels modern. You’re moving to this new thing. Of course it’s not new at all, it’s new in Canada but it’s not new around the world.

I think you just kind of become part of this little clique or something and it’s hard to get off the bandwagon once you’ve jumped on. If there was more time on the beginning and we could have gotten to individual councillors with this information and the information from around the world maybe… I mean, over 40 municipalities including Paris in France have re-municipalized.

The trend is the other way now. The trend is quite startling. China is doing a lot of privatizing and so is India but absolutely everywhere else, Latin America, all through North America, all through Europe, the trend is moving the other way. They are moving back to public systems after it hasn’t worked. I just want to place this information in front of people. This isn’t a my side thing, this is irrefutable numbers — facts. Municipalities are changing their minds. Paris just announced water rate cuts because they were able to take the profit out of the equation and people are thrilled to have their water back in public hands. This is information that the councillors here need. And maybe it got set up as a kind of “he said/she said,” and now they won’t listen to anybody with Regina Water Watch.

Someone said at the thing this morning, Well you people aren’t independent. Well, we have a scientist who was with Environment Canada for many years, a water scientist, who most certainly is independent. I’m independent. I have nothing to gain from this. This is years of study. This is what I believe. But I’m not a special interest group getting something from this, there’s nothing in this for me. This notion that because we have this view we’re ideological on one side and therefore what we say isn’t credible. It’s just the information is there and what we’re hoping is the city councillors individually will really look at it and understand that this is 30 years that they’re tying the hands of the people of this community. It’s a very very big commitment.

 

PD: I think one of the things people can’t wrap their heads around is this idea the amounts of money — we’re being handed $58 million but you’re saying the added costs that come with a P3 are higher even than that. I just don’t know if people get that–

MB: I know. It’s so much money they can’t even imagine. But over the years, Agbar is a private company that just got the contract to do water services in Barcelona, Spain. That’s a 50 year contract but it’s estimated that they’re going to make 1.4 billion Euros in those 50 years. In that, the 50 year contract is from the public purse. That is public money being sucked up to these private investors, to the CEOs who make phenomenal salaries. That is public money that could go back into keeping these water systems clean and upgrading infrastructure. You’re sucking up money for years and years.

That $58 millions is peanuts. That’s not the real money. That’s not where we should be looking. It’s the long term profits that these companies are going to be making. And besides, we should be saying to the federal government that we don’t agree with your blackmail of municipalities and saying that [we] have absolutely no choice. Federal government money is public money, that’s taxpayer money. And taxpayers and voters should have the right and municipalities to decide themselves if they want to go public or private.
PD: What if the Yes side wins and the P3 doesn’t happen? Presumably city admin will get right to work putting together a different deal. What options are available to the city to contain costs and shift risk if they’re not going with a P3?

MB: I think they should put pressure on the Harper government. They should put pressure on their own provincial government and have [Premier Brad Wall] say to his friend Stephen Harper, We need this money, Saskatchewan needs infrastructure money, all the municipalities do.

We’re going through the same fight in St Johns, New Brunswick where many of the councillors have said, we don’t want to go private but we just don’t feel we have a choice.

I feel we should fight back. I just think saying “Uncle” and we can’t have the money and that’s it and just accepting it is wrong. I think we should be demanding of the federal government that they provide funding, it’s their responsibility, it’s always been a shared responsibility to build infrastructure. And I wouldn’t buy this notion for a minute.

We should start putting pressure. This government is vulnerable. They’ve done a lot of things that have made a lot of people mad and I think we should start fighting back. And personally I don’t think it should be accepted that that money isn’t there because this decision gets made.

 

PD: There are two things that certain councillors have accused Regina Water Watch of lying about. The first is related to how the city is calling this a sewage plant and that this referendum isn’t about the control of our water. They say that this isn’t about water it’s about sewage.

MB: I wish you’d heard [former Environment Canada research scientist, Marley Weiser] this morning. She was so clear. She talked about the threat to the Wascana Creek and the watershed here from current waste water systems and the need for this upgrading and the need for public control of this because waste water is water. It goes right back into the stream that provides our water. You can’t just separate it out. It’s as if it is some kind of disgusting dirty thing that we throw off into the sky or something and it never comes back here. It’s part of the ecosystem and it’s what we ingest again when we drink tap water. It’s all the same thing. And it’s waste water around the world and the [failure to clean] waste water properly that’s killing people, much more than lack of access to water. It’s the dirty water. So the fight at the UN was around the fight for the human right to water and to sanitation.

So that’s just a false and dishonest split that they’re making here. There is one ecosystem and if we hurt it we hurt all aspects of the water system.

 

PD: The other thing they point to is how Regina Water Watch has been calling this privatization. These councillors are saying this isn’t privatization because we’ll continue to own the plant and control the rates–

MB: It is privatization. When you are turning over the operation, the building and operation of a facility of an essential public service to a private for profit company even though you technically still own it, you are privatizing it. You are signing an agreement that we can’t even see for heaven’s sake that is basically giving control of this essential public service to a for-profit company. It may not go as far as Margaret Thatcher went in selling the whole kit-and-kaboodle back in the 80s. But it is privatization nonetheless and people shouldn’t be fooled by that.

 

PD: Another thing that council has been saying — the Chamber of Commerce keeps bringing this up as well — is that Regina Water Watch is being supported by CUPE, the largest public sector union in the country. I’ve even heard people say things like CUPE and the Council are using Regina as a pawn in their strategy to set a precedent that P3s can be stopped.

MB: Well, first of all, we’re trying to stop it wherever it happens. We’re fighting hard in St Johns, we won in Abbotsford. Wherever this pops up we’re going to be there. There’s no question about that. Secondly, there is absolutely nothing wrong with public sector unions promoting and protecting the public good. I mean, what the heck should they be doing? And I thank them for it and I think people should stop thinking of that as a negative thing. These are people who deliver essential services caring about the quality of that delivery and I think we shouldn’t see it as a negative thing.

But my heavens, if you want to look at a special interest group, let’s look at the big business lobby, let’s look at the companies that are going to spend to make such a windfall if this continues to be a landslide across the country and we start to lose control of our water systems in this country. These corporations stand to make billions and billions of dollars. That’s where your special interest lies. My organization is non-profit, we’re non-partisan, we don’t even have a charitable tax status. We’re in this because we believe in fighting for the rights of people and the rights of the environment. I think that that’s just name calling because they can’t think of anything real to say.

Author: Paul Dechene

Paul Dechene is 5’10” tall and he was born in a place. He’s not there now. He’s sitting in front of his computer writing his bio for this blog. He has a song stuck in his head. It’s “Girl From Ipanema”, thanks for asking.

You can follow Paul on Twitter at @pauldechene and get live updates during city council meetings and other city events at @PDcityhall.

6 thoughts on “What’s The Worst That Could Happen If We Get A P3? – An Interview With Maude Barlow”

  1. Maude Barlow gets it when she says this “Somebody asked me to point blank explain the difference between private and public and I said, profit. That’s the difference.”

    Take away both side’s rhetoric, privatizing the water treatment plant will mean the addition of a profit margin to everyone’s water bills.

    Current bills are $1,470 per homeowner so 15% profit markup means an extra $220 per year for 30 years ($6,615 extra)

    Commercial bills are $9,612 so they will pay an extra $1,442 for 30 years ($43,254 extra)

  2. I like that Barlow takes time to analyze some of the arguments going on – particularly the invidious distinction being made between sewage (ooh gross no don’t wanna pay for that) and waste water (damn, we drink that stuff eventually).

    Also, I’m going to be the annoying guy who points out that it should be Saint John, New Brunswick, with the Saint spelled out completely. Okay, I’m all done being annoying.

  3. What’s the worst that can happen if we vote yes?

    A plant that’s long overdue for upgrades will wait even longer for them (which neither side brings up, seeing as the environment is just a CONCEPT to them; note that neither side’s leaders are scientists or engineers). Seriously, how has this not been brought up? Oh wait, because neither side is realistic; all they see are dollar signs and votes. Voting against a project that is ready to roll is essentially saying “meh, who cares?” to the risk of shit going down at an ancient plant that releases effluent into the Wascana Creek.

    A union-funded (whose members are apparently okay with how their money is being spent) organization is appeased, despite the fact they have offered NO alternative plans to the city’s.

    It doesn’t help that Water Watch is fear-mongering. They actually think that the private company in the P3 will manage to hide their failing numbers from the government. Really? If anything, a plant run BY the government will get away with that. If the private company fails, they are fined. The government will hesitate to fine itself. It is in the company’s best interest to meet and exceed the standards.

    People will lose jobs? Not if they are competent. Would the private company really go through the trouble of recruiting, rehiring, and retraining NEW employees when the current ones are already qualified?. And really, be honest. If you care so much about wastewater, would you really defend the firing of someone who is likely to screw up? If you cared about saving costs, would you really say no to $40k per year per fired employee? (if they’re good at their job, they’ll just be rehired at another plant somewhere else anyway).

    Did you watch the debate? Did we watch the same debate? Holmes went overtime cringingly often, and didn’t care, since it allowed him more time to: personally attack the intelligence of city councillor members, including his debate opponent (frowned upon at high school debate levels, take that as you will); denounce spin doctors, then act oblivious when reminded of pamphlets (see: blatant misinformation) depicting a little girl drinking a glass of water; flip-flopping on the terms “water” and “wastewater”; dodge questions about his campaign funds by giving his personal “oscar acceptance speech” recognizing volunteers. He also did not mind taking the words of environmentalists out of context, then ignoring the Mayor’s comment on the opinions of P.Eng.s working for the MINISTRY OF THE ENVIRONMENT within SK.

    Fougere did not debate well, so he did not help his side an awful lot. At least he didn’t waste the audience’s time by indulging his personal wounds from losing the mayoral race.

    There’s so much more rhetoric and misinformation for the “Yes” side though. I feel like the interviewee of this article would have done better at last night’s debate. Maybe then I would vote Yes. She seems like she actually cares about more than dollars and votes.

  4. thanks for this article. i’ve been wanting to read it for awhile, but it kept slipping my mind. after the disappointing debate the other night i’m very glad to be able to have these facts brought to my attention. i’ve been trying to get some real information about the issue, and i didn’t really hear anything new by either side. the city just keeps spouting the same old $276, and $58.5,000,000, and i was disappointed that jim holmes kept taking personal potshots at the mayor, and didn’t really offer any more new and commanding facts, such as presented in this article. i felt he could have done a much more convincing job, with the info he has at his disposal.

    this is such an important issue, information like this needs to be heard by as many people as possible in this city before they vote.

    thanks again…..any interviews of the other speakers of that evening?

  5. edward – You make some good points, but you also make some wrong assumptions and statements.

    You scoff at jobs being lost, but every P3 water privatization has led to job cuts. Even when the headcount starts out the same, it is driven down, usually sharply.

    And the jobs that remain are of degraded quality with little opportunity to advance, transfer, or cross-train. There’s usually no pension and the benefits get slashed to boost corporate profits.

    Yes the Regina workers’ contract will transfer across for a couple years. But when it expires, the waste water plant workers will have no leverage since they will have been successfully divided, conquered, and isolated.

    Look at any other P3 water privatization and you’ll see this same pattern.

    Or if you don’t believe overwhelming proof from around the globe, just look locally at how the Regina garbage department was chopped in half to privatize the blue bins.

    Private corporation Loraas refuses to use experienced city workers for collections, using low paid TFW’s instead. Keeping water public would also keep water workers in the city pension, which badly needs to keep its membership intact. Has the city revealed how much of a financial hit the pension plan will take when they kill off the water plant jobs? No? Oh right, they don’t believe in sharing those numbers, just the $276 water bill threat.

    To your specific claims:

    “People will lose jobs? Not if they are competent.”

    False and insulting to the good people who have been competently delivering and cleaning our water for many years.

    “Would the private company really go through the trouble of recruiting, rehiring, and retraining NEW employees when the current ones are already qualified?.”

    Uh, yes, that’s exactly what they would do. That’s what Loraas did, and it that’s what private P3 water corporations do. They call it ‘innovation’ but it’s really just a cute name for job destruction.

    That’s how it goes, at least until the P3 water corporate deals implode, as they have in South America, Atlantic Canada, and all across Europe. And that’s why these imploded water corporations are fleeing those places like rats and looking greedily toward desperate dumb city councils such as…. Regina.

    You can call this rhetoric, or you can crack open a newspaper or website and learn this isn’t “fear mongering” but actual news events that should be a flaming bright warning sign for us all.

  6. edward:

    I’d encourage you to read about Berlin’s P3 water deal. It started with a 54 million Euros deal to “manage and modernize” the city’s water service. Sounds great! (And sounds eerily familiar too, doesn’t it?)

    The terms were kept sealed from the public. (Does this ring a bell?)

    But over the last decade, citizens have been fed up with massive rate hikes and poor service, not just in Berlin, but Brussels, all over France, Greece and Great Britain.

    Politicians are being turfed out and their replacements are passing laws to reveal the P3 water deal terms. That ‘s when citizens across Europe learned the water companies had been taking over 50% profit markup.

    They couldn’t cancel the long term secret deal, so taxpayers have been forced to pony up an additional 2,000 million Euros (2 billion Euros) to buy out the private water companies that exploited them. Plus they learned the water corporations had overcharged them by 1.4 billion Euros. What started as a 54 million ‘modernization’ has cost the people 3,454 million

    And that same story seems to be starting over here in Regina.

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