Send tips to Community Media Worskhop
cmw@newstips.org
NEWSTIPS HOME | About | Follow on Twitter @ChicagoNewstips


Chicago infrastructure trust – and water privatization?

A new report on private equity takeovers of public infrastructure focused on privatization of water services highlights Chicago’s infrastructure trust and warns of higher costs, degraded service, and diminished accountability.

“The infrastructure trust makes us more vulnerable to a public-private partnership” either to finance water system repairs and upgrades or for an operation-and-maintenance contract, said Emily Carroll of Food and Water Watch, which released the report.  “Taxpayers should be wary of getting a raw deal,” she said.

Mayor Emanuel has said he opposes the sale of Chicago’s water system, but the infrastructure trust is set up specifically to foster public-private partnerships, which Food and Water Watch considers a form of privatization, Carroll said.  In so-called P3s, public control over infrastructure is lost and ratepayers are on the hook for private financing costs, she said.

She points to the experience of Atlanta, which canceled a contract with a private corporation for water system operation in 2002 after huge problems with repairs, including emergency responses, and inflated charges for work done.  When only half the promised savings were realized and revenues fell short, the city requested the company’s billing records and was refused, according to FWW.

Water rates

And while Emanuel recently raised water rates to pay for repairs and upgrades, he could later come back and say more money is needed – and the higher rates would make the system more attractive to private investors, Carroll said.

In investment industry surveys, water systems are rated among the most desirable kinds of infrastructure, according to the report.  One of the Chicago trust’s participants, Macquairie Infrastructure and Real Assets, spent $578 million to purchase a private water company in 2007 – the largest private equity water service deal listed by FWW.

The report cites a trade publication describing Chicago’s $1 billion infrastructure trust as “an industry-backed deal to establish PPPs as a politically and financially viable business.”

Currently “private equity vehicles are armed with over $100 billion” seeking highly profitable investments in public infrastructure around the world, in an attempt “to exploit the lagging recovery of the public sector,” according to the report.

About Chicago it says:  “The city’s primary motivation appeared to be the desire to take debt off city books to give the illusion of reducing its liabilities.  ‘We have a tool here that takes some of the pressure off taxpayers,’ Emanuel claimed.  ‘Use somebody else’s money for a change, rather than theirs.’

“In the real world, however, banks do not provide free lunches.  Chicago will have to repay the private capital investment with interest through user fees.

Read the rest of this entry »

Residents oppose demolitions

Mayor Emanuel has begun demolishing vacant buildings in his newest anti-crime effort, but an organization of residents in the affected communities says it won’t work — and there are better ways to deal with vacant buildings.

Action Now will hold a press conference in front of a vacant lot at 53rd and Laflin, Friday, July 13 at 10 a.m., to call on the city to stop demolition and instead use the new Chicago Infrastructure Trust to rehab and rent vacant buildings.

“Vacant lots are not any less dangerous than vacant buildings, and demolishing [buildings] won’t solve the crime problem,” said spokesperson Aileen Kelleher.

She points to the shooting Tuesday of a 14-year-old boy standing in a vacant lot in Roseland.  Last year Action Now held a protest in Humboldt Park at a vacant lot – left unsecured by mortgage holder Chase Bank — where a woman was raped.

One solution is stepped-up enforcement of the vacant properties ordinance, she said.

“If the city had held banks accountable with the vacant properties ordinance – if the banks had kept these properties up and secured them – we wouldn’t be at this point,” said Charles Brown, chair of Action Now’s neighborhood revitalization committee, which developed the Rebuild Chicago plan to finance rehab and rental.  (See yesterday’s post.)

Read the rest of this entry »



Get Newstips in Your Inbox!

Enter your email address:


Subscribe in a reader

Newstips Archives

Categories

Add to Technorati Favorites

RSS Nonprofit Communicator

  • An error has occurred, which probably means the feed is down. Try again later.

RSS Chicago is the World

  • Telling people’s stories, an ethnic media success September 2, 2015
        By Stephen Franklin Community Media Workshop   A 3-year-old child died on a plane from Chicago to Poland. This, Magdalena Pantelis instantly knew, was a story her readers would care about. But she needed more detail to write about it for the Polish Daily News, the nation’s oldest daily newspaper in Polish, founded Jan. […]
*

*

*



*










CAN TV is a network that belongs to the people of Chicago.  For updates on local programs, and live, timely coverage of community events, sign up at http://www.cantv.org