Water Industry News

Government took reins of water authority, faced strike
January 3, 2005.

By John McPhaul of Caribbean Business

Water continues to be Puerto Rico’s biggest environmental problem, with the performance of the Puerto Rico Aqueduct & Sewer Authority (Prasa) coming under continual attack by domestic and commercial consumers alike.

In 2004, the government took steps toward improving the performance at the authority by taking control of Prasa management from Ondeo Inc., the private manager that had worn out its welcome on the island by requesting an additional $90 million on its contract.

The move ended an eight-year experiment with private management of the island’s water system, which saw two different private water managers fail to live up to the expectations of the government and the public for providing reliable water service for Puerto Ricans. New Prasa Executive President Jorge Rodriguez said the authority was “a total mess” when he took office in April. Subsequently, the government resumed management of the authority.

Rodriguez gave a failing grade to the authority’s eight-year experiment with privatization. “There was no direction, there was no preventive maintenance, there was little motivation,” he said. “It was as if the patient were in intensive care.” Privatization shouldn’t be repeated, Rodriguez said. “For [Prasa], privatization has been discarded for now and forever,” he said.

Ondeo ran the authority for two years only to have the government cut its 10-year contract short. It didn’t prove equal to running a system of Prasa’s size and complexity, said Rodriguez. Prasa runs 130 different water systems throughout Puerto Rico, which process 500 million gallons of water a day. Prasa also operates 29 sewage disposal plants and 1,600 pump stations.

But no sooner had the government taken over management of the company than it started bumping heads with its principal union, the Independent Authentic Union (UIA by its Spanish acronym). Citing the existence of a bank account to which no outside agency had scrutiny, management declared it would privatize the union’s health plan. The union responded by declaring a strike on Oct. 4. Though the two parties were able to settle differences over the health plan by giving workers a choice of plans to which they could subscribe, the strike persisted with differences over economic benefits. Workers returned to their jobs Dec. 27 after 84 days on strike.

When Prasa took over the island’s water and sewerage operations from Ondeo it inherited a number of jobs that need to be completed in order to comply with U.S. Environmental Protection Agency (EPA) standards. Among other things, Prasa had to refurbish 100 leaking sewage-pump stations upstream from water-supply intakes. Prasa also had to finish installing water-filtration systems at 45 plants.

The EPA also ordered Prasa to develop and implement a preventive maintenance program for all of its water and sewerage facilities. “Preventive maintenance at Prasa doesn’t exist at all,” said EPA Caribbean office chief Carl-Axel Soderberg. Under a federal consent decree, Prasa also must install sedimentation-treatment facilities at 50 of its sewage-disposal plants. In June, the EPA and Prasa announced they are working on a comprehensive plan to bring all of Prasa’s facilities into compliance with the federal agency’s standards.

Other environmental clashes

In other environmental news, environmentalists and developers continued to be at odds over projects that environmentalists claim are detrimental to the environment. The showcase confrontation occurred in Luquillo where environmentalists filed suit over plans to build the San Miguel / Four Seasons and Dos Mares / Marriott Resorts. A Superior Court judge dismissed one case in which environmentalists disputed the sale of land by the Puerto Rico Industrial Development Co. (Pridco), a decision upheld by the Court of Appeals, though environmentalists claim the decision was based on a technicality. The environmental groups also filed suit challenging the approval by the Environmental Quality Board of the environmental impact statement filed in the case of Dos Mares / Marriott.

Another area where environmentalists clashed with developers was Rincon, where the Surfrider Foundation challenged the construction of a beachfront apartment building, citing irregularities in the permitting process. The Superior Court ordered the construction stopped and gave the developer 45 days to resubmit permit requests to the Planning Board. Also in Rincon, in January, the government created the Tres Mares Marine reserve to protect an area that includes the largest elk-horn reef remaining in the Caribbean.

On the island of Vieques, plans to clean up areas on land formally occupied by the U.S. Navy proceeded. The Navy announced it would begin removing unexploded ordinance from its former land beginning in mid-January. The Navy also announced it would hire more than 20 Viequenses to help in the clean-up.