MANAGING A MANAGED COMPLETION OR PRIVITIZATION
Abstract:The Sewerage and Water Board of New Orleans (SWBNO) is responsible for potable water production and distribution, storm drainage and wastewater collection and treatment for the City of New Orleans. The S&WBNO recently advertised for a contract operator to take over most operations of the agency. The project would displace 2/3 of the current employees. This would have been a 20-year project in excess of $1 billion, the largest privatization in the United States. The 1200 current employees of the agency were allowed to bid against the private operators. The project attracted two (2) other bidders.
The bid process prompted a change in the city charter through a public referendum.
Privatization was presented as a way to respond to pressing financial needs of the agency. The S&WBNO was facing a $600 million EPA Consent Decree and at least $500 million in water system improvements.
The problem presented was how to manage the agency during the long, arduous negotiation process leading up to privatization when most of the employees were involved in the process, the long duration of the process and the public reaction to the process.
Also, the events of 9/11 had a major impact on the competition since two of the bidders were French owned and one potential bidder was a German/English/American partnership.
Document Type: Research Article
Publication date: January 1, 2004
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