California judge voids
Joint venture ordered
to wind-down project
Dec. 6, 2003
A San Joaquin County judge, today, rescinded the $600 million water
privatization contract that OMI-Thames have been performing for
Stockton, CA since August.
The contract, the largest of its kind in the western United States,
would transfer the costs of upgrading the city's aging sewer pipes and
treatment plants to OMI-Thames Water, a joint venture of American and
But three groups -- the Concerned Citizens Coalition, the Sierra
Club, and the League of Women Voters' -- sued the city in March,
arguing that city leaders should have paid more attention to the
20-year contract's environmental impacts before signing it.
"The city proceeded recklessly, knowing that they were in
violation of (state environmental laws)," said Diane Park, policy
director for the League of Women Voters' San Joaquin County Chapter.
The judge gave Stockton leaders six months to "wind down the
relationship" that started Aug. 1, when the city hired OMI-Thames
to operate its water, wastewater, and storm water systems.
expect that private operation of its water utilities
would save the city $100 million over the next 20 years. It is not
clear, from the judges ruling, if his decision affects the 20 year
operations contract or just the design- build sub-contract.
The city and
OMI-Thames may still appeal the decision to a court of appeal in
If the ruling stands, Stockton voters will have to approve any new
City voters approved an initiative in March giving them the final
say on any deal worth more than $5 million.