In recent weeks, lobbyists have been pitching Baltimore officials on a plan for French company Suez Environment to take operating control the city’s water system, several City Council members say.
The council members say lobbyists from the company have been meeting with influential people inside and outside of City Hall, arguing that private control of water billing and infrastructure will lower city debt.
According to the pitch, Suez — a descendant of the company that built Egypt’s Suez Canal — would pay the city upfront to take control of operating Baltimore’s water system and then collect the money charged from water bills. The company would hire current Department of Public Works employees, honor union contracts, and pledge to raise water rates only minimally.
Jim Perron, Suez’s director of project development, said he has flown to Baltimore from Indiana every week for the past five or six weeks. He said he has met with 14 of 15 City Council members and on Wednesday plans to meet with the Greater Baltimore Committee and Comptroller Joan Pratt, among others.
“The city eventually has to raise rates,” Perron said, but argued private operation of the water system would cause rate increases to be “as close as possible” to the rise of inflation.
Perron said the plan is for Suez and partner KKR, a private equity firm, to develop a 40-to-50-year lease agreement with the city in which Suez would pay annually for improvements to water infrastructure. He objected to the term “privatization” to describe the plan.
“The more correct characterization would be a potential public-private partnership for the city’s water and sewer system,” he said. “The city would continue to own the facilities. We would become the operator.”
Two Baltimore lobbyists have registered on behalf of the company: American Joe Miedusiewski and Brett S. Lininger. Neither responded to phone calls seeking comment.
Mayor Catherine Pugh said she didn’t want to take a “short-sighted” view of the issue.
“Everybody understands that we have a serious problem with our infrastructure,” she said. “The pipes need to get fixed one way or the other. They don’t fix themselves. But we can’t allow somebody to take advantage of the situation. I’m not going to be short-sighted.”
Jeffrey Raymond, a spokesman for Baltimore’s Department of Public Works, said agency director Rudy Chow is not interested in privatization.
“Director Chow has been clear and unwavering in his desire to make the Baltimore City Department of Public Works the best public works agency in the country, accountable to the elected officials, citizens, taxpayers, and rate payers of the City and the water utilities,” Raymond said. “This, not privatization, remains his focus.”
City Council members who have heard the pitch said they are opposed to the deal.
“The council president is completely and 100 percent opposed to the privatization of Baltimore’s water system,” said Lester Davis, a spokesman for Baltimore City Council President Bernard C. “Jack” Young. “The president has always been a proponent of retaining assets and not giving them away. This is not going to be something that happens under his watch.”
City Councilman Ryan Dorsey said lobbyists pitched him several weeks ago on how the company could find “efficiencies in the system in order to make improvements less costly.”
“It’s obvious that if you’re looking to privatize infrastructure, your motive is profit,” Dorsey said. “Privatization puts profits first and people last.”
Rather than have an outside company take control of Baltimore’s water system, Dorsey said he wants to see legislation that caps how much the city can charge residents based on their income level
“It’s a scary thing,” he said. “Some people are talking about privatization. It puts fear in people’s minds that machinations are at work. If the council president said it’s not going to happen under my watch, then I want to commend him and hope that others in the city will be equally clear.”
City Councilman Brandon Scott said he took a meeting with the lobbyists but left unimpressed.
“It sounded like a gimmick to me,” he said. “I’m not interested in it at all.”
Perron said deals like the one he is proposing are rare in the United States.
“Our company has pioneered the concept in the United States but it’s very common in Europe,” he said.
The lobbying effort marks the latest attempt by private industry to make inroads in Baltimore’s water system.
In 2014, city officials pledged they had no plans to privatize the water system, as hundreds rallied outside City Hall.
Baltimore's water system employs 1,500 workers and provides drinking water to 1.8 million people in the region.