US Water Wins Largest Water Privatization Contract in New England History

Updated 2:56 PM ET August 14, 2000

SPRINGFIELD, Mass., Aug. 14 /PRNewswire/ -- The Springfield, Mass, Water & Sewer Commission unanimously awarded Bolingbrook, Ill- based U.S. Water LLC a 20-year contract worth $263 million for managing its 67-mgd wastewater treatment plant, 29 sewage pumping stations, combined sewer overflow operations and system residuals disposal. The plant serves a population of 275,000 covering seven municipalities including the City of Springfield and is the third largest activated sludge plant in New England.

"The award of the Springfield contract is a clear example of how U.S. Water achieves results for its clients by using a team approach, creative thinking and good old fashioned hard work," said Michael Belsante, president and CEO of U.S. Water. "Springfield benefits from the vast technical expertise of U.S. Water and its parent companies and gets quality service at a significant cost savings. We are pleased to begin what I know will be a successful 20 year relationship with the Springfield Commission."

The largest water privatization contract in New England was secured for U.S. Water by a five-person negotiating team of senior executives from US Water. Bechtel Enterprises and United Utilities -- U.S. Water's parent companies -- guaranteed U.S. Water's price and performance. The guarantees are joint and several and capped at $100 million. United Utilities is one of the largest water and wastewater utility companies in the world, headquartered in the United Kingdom. Bechtel, headquartered in San Francisco, is among the world's largest engineering and construction companies.

The Springfield contract includes about $10.4 million in capital projects. U.S. Water will be responsible for delivering the improvements within the first two years of the contract.

In approving the transaction, the Commission acknowledged the many benefits of privatization, such as transfer of risks to the private sector. The Springfield contract incorporates a unique sharing mechanism for risks associated with market conditions and change in law for sludge disposal. In addition, U.S. Water will manage the Commission's compost contract.

Given the sensitivity of the Commission and the community to odors, the contract gives the Commission the right to sanction the company if it fails to meet its odor control commitments. U.S. Water has a distinct company policy to address odor issues at the plants that it operates.

U.S. Water's technical and pricing proposal was selected from a field of four teams that responded to an RFP issued in March 1999.

U.S. Water delivers comprehensive water and wastewater operations services to municipal and industrial clients in North America. The company was founded in New Jersey, where it maintains its operational and customer service headquarters and its largest regional office. U.S. Water currently operates 70 facilities throughout the United States. For more information about U.S. Water, please visit the company's web site at http://www.us-water.com.

Contact: Michael Cherenson of The Cherenson Group, 973-992-7800, ext. 104 or mcherenson@cherenson.com, for U.S. Water