Today, United Water participated in Clinton Global Initiative (CGI) Annual Meeting held in New York City. During the ‘Working Capital’ plenary session at CGI, which was opened by President Barack Obama, our CEO Bertrand Camus, made a featured commitment.
Our commitment United Water’s ‘Solution’ will bring an innovative, cross-sector solution and new private equity investment to address the water challenge that many municipalities face today.
As an organization, we are proud to be a part of CGI and would like to share with you the details of our commitment – America’s water challenge, the solutions we offer and how we are going to execute those solutions.
America’s water Challenge
As you can imagine, maintaining clean and sustainable water supplies is the single most important contributor to public health and is essential to the growth of the economy.
The American Society of Civil Engineers gives America’s water infrastructure a “D” grade. Many of our country’s water and sewer systems were built during the post-World War II era. Decades of underinvestment and ever-increasing demand, has pushed systems to a breaking point. The federal government says it will take over $600 billion over the next two decades to restore the country’s water and sewer systems.
Cities throughout America have little or no capacity to respond to this challenge on their own. Their accumulation of debt – compounded by the recent economic crisis – means they either don’t have the money, or in many cases the know-how, to fix the problem themselves.
We at United Water believe it’s critical for America to address this water challenge immediately, because our future will, in many ways, be defined by our ability to meet this challenge.
The United Water ‘Solution: Investing in America’s Water’
As a part of the ‘Solution’, United Water’s will upgrade and operate water systems more efficiently and help cities meet increasing environmental and water quality standards. This in turn will attract new long-term capital from private equity partners. The new resources generated can then be used specifically to upgrade water systems and also to help ease pressure on municipal balance sheets, freeing cities to invest in other public services.
Under this innovative contractual approach, the city will maintain ownership and regulatory oversight of the utility and it will never leave public hands. The city will also continue to govern and approve water rates. We will provide water management expertise and operate the system in exchange for standard, resident-paid water usage fees.
United Water ‘Solution’ will bring sustained and predictable investment in water and will create new infrastructure-related jobs and spur growth in local economies.
A Concrete Action Plan
In our Commitment to Action, we along with our private equity partners will invest in two municipal water systems. We intend to bring this innovative model to many other municipalities in years to come.
For example in the City of Bayonne, New Jersey, United Water and partner Kohlberg Kravis Roberts, will, over the 40-year duration of the contract, make a $107 million capital investment in the water system and also retire $130 million of overhanging Bayonne Municipal Utility Authority debt.
Our Initial capital investment will be in highly accurate wireless water metering and other monitoring systems, such as GIS, SCADA, and CMMS. This will help reduce water loss from leakage, prioritize pipe replacement and improve operational efficiency.
We have also been selected to work with Nassau County, New York, to improve the county’s wastewater system. A second phase to choose a private equity partner is expected to follow.
We are confident that our ‘Solution’ will create a win-win situation for communities, municipalities and our partners by achieving the following:
- Our expertise will help cities improve meet and maintain environmental and water quality standards;
- Residents are protected from sudden, sharp water rate rises;
- Guaranteed capital investment will reduces the risk of by major system failures; and
- Cities will clear old debts.