Wall Street Tightens Grip on Public Water as Local Residents Suffer

[xchrom]

http://www.commondreams.org/headline/2012/08/22-5

Investment bankers and other major financial players are increasingly swooping in on public water utilities and other municipal services in cash strapped towns to the detriment of local residents, according to a new report released today by advocacy group Food & Water Watch. Vulture capitalists are increasingly facilitating the privatization of public infrastructure, taking control of public utilities while skimping on services and causing steep price hikes -- all the while making massive profits.

According to the report, private equity firms show up to hurting municipalities as hired financial advisers and subsequently push through privatization deals. Massive profits are made in the process, as such advisers stand to make great financial gains through these deals. Following privatization, local residents are continually denied sufficient services and face steep consumer price hikes in the under-regulated process.

“Like Wall Street’s manipulation of the housing market in the previous decade, private equity firms and investment bankers are increasingly looking to cash in on one of our most essential resources—water,” said Food & Water Watch Executive Director Wenonah Hauter. “These deals are ultimately a bum deal for consumers, who will end up paying the price through increased water bills and degraded service.”

report link here:

http://www.foodandwaterwatch.org/reports/private-equity-public-inequity/

Private Equity, Public Inequity

***SNIP

Key findings:

There have been only half a dozen sizable private equity takeovers of water and sewer services in the United States, but four new deals were nearing consummation or awaiting regulatory approval in 2012. (See Table 1, page 4.)

Major financial firms are promoting large, complex and risky privatization deals, which essentially act as high- interest credit cards to finance budget shortfalls and infrastructure projects. Cash-strapped governments lack the bargaining power and know-how to properly negotiate these deals.

Private equity players have targeted annual returns of at least 12–15 percent.

[PADemD]

1. Mayor defends water, sewer lease plan

Pawlowski: Allentown would protect customers, employees if systems are leased.

Residents had plenty of questions for Allentown Mayor Ed Pawlowski on Thursday about the city's plan to lease its water and sewer systems to an outside operator for 50 years.

Will water rates go through the roof?

Will workers' wages be protected?

What will happen to water quality?

http://articles.mcall.com/2012-08-02/news/mc-allentown-water-meeting-20120802_1_water-and-sewer-water-rates-lease

[northoftheborder]

2. Disaster capitalism at work

[Snarkoleptic]

3. There was a story on the CBS Chicago 10:00 news about the company "Aqua".

The purchased the water utility in Kankakee, IL in 2006 and rate just jumped by 300% this year!

http://chicago.cbslocal.com/2012/08/20/aqua-illinois-customers-furious-with-skyrocketing-water-bills/

Will pugs and teabaggers ever figure out they're dupes and pawns of the 1%?
How many times must this happen before people quit screaming about how bad socialism is?