state-federal relationships {ES&T, May 1996, p. 109A). A key part of NEPPS is science-based assessments: setting environmental goals and measuring progress against actual environmental conditions. This research has been conducted by the science division and would be specifically shifted to outside contractors, according to Shinn. DEP staff countered, however, "We can't use contractors to develop a NEPPS plan. Every time we modify the program, we will have to hire them back. Is New Jersey going to have contractors negotiate with EPA over the quality of our assessments?" On the Pollution Prevention Office layoffs, DEP staff said, the result will be to put transferred staff with little industrial permitting experience in charge of an advanced facility-wide permitting program which will result in restructuring and stalling the program In California, SCAQMD has announced a goal of cutting its budget in half within 10 years. The district has already reduced its staff from 1200 to 750 over the past six years. During this time, the district has introduced pollution trading techniques and abatement technologies that are national models. In explaining the rationale for the cuts, district spokesperson Bill Kelly said, "We are a single-purpose air control agency, and we've turned the corner on cleaning the air. We are shrinking down to a maintenance-sized agency. We'll always be here if things change." But Linda Waade, executive director of the Southern California-based, nonprofit Coalition for Clean Air, saw the issue differently. "We've made significant progress, but we still have the dirtiest air in the country," she said. Los Angeles currently exceeds federal air standards one out of every three days, she said—an improvement over four out of five days a few years ago, but far short of the Clean Air Act's goal of air quality attainment by 2010 "Last year the district adopted two out of 28 regulations it had said were necessary to continue to meet pollution goals," Waade said. "We're not going to continue to make progress." —JEFF JOHNSON
NEWS SOCIETY Cities' drive to privatize water treatment may aid environmental businesses Privatization of U.S. wastewater treatment and drinking water supply systems over the next decade is expected to reinvigorate a sagging environmental market. Unlike environmental expenditures by regulated industries for compliance or Superfund cleanups, both of which have been hit by stalled legislation and regulations, water-related spending by cities is predicted to increase. Analysts say municipalities will join with corporations to upgrade equipment introduce new technologies or keep pace with increased demands
An agreement reached last year in which a Franklin, Ohio, water district sold its treatment plant (above) to Wheelabrator Technologies Inc. may be a harbinger of deals to come.
The future may hold more examples like a contract signed last year between Wheelabrator Water Technologies and a Franklin, Ohio, water district to purchase and operate the city's treatment plant and an agreement nearing completion in which Wheelabrator will upgrade and operate a Wilmington, Del., sewage treatment facility for 20 years. Analysts say cities from San Diego, Calif., to Bridgeport, Conn., are looking into privatizing water services. Currently U.S. businesses and municipalities involved in supplying drinking water and treating wastewater generate about $75 billion in annual revenues, according to Robert Anfuso, an analyst with Environmental Business International, Inc., a San Diego, Calif., research and consulting firm. This is expected to shoot up to $96 billion by 2000, he said. Other analysts believe it will go higher. Michael Gigliardo, director of the U.S. Conference of Mayors Urban Water Institute, estimated that spending could reach $200 billion within 10 years, mostly for wastewater treatment. Gigliardo's institute was created a year ago to advise cities on waterrelated matters, one of their most expensive worries. The new interest in this oldest and sleepiest of environmental sectors is being driven by drastic federal cuts to water infrastructure grants public fear of Cryptosporidium-like con-
tamination, declining municipal budgets and aging facilities, new regulations, growing capacity needs, and greater acceptance of "privatization." The way Anfuso sees it, there are 16,000 publicly owned treatment works in the United States, and 1200 are out of compliance. "Now that's a business opportunity. But it doesn't mean much if cities don't have the money." That money, he said, might be provided by private capital looking for a profit through a long-term service contract or an outright purchase. Currently only about 1% of facilities for wastewater treatment and about 15% of water providers are privately owned, Anfuso said. The move to privatization will begin with small steps as mayors and city council members test a system with which they are unfamiliar, said Anfuso and Gigliardo. They face sometimes strong opposition from labor unions and workers worried that cuts will come out of their paychecks and a public that often believes water should remain a municipal service Also restrictive tax codes and provisions in past federal infrastructure grant agreements have made it difficult for municipalities to sell the facilities Some of these limits however have Kopn chanppH or are being rnnsidered for modification Anfuso and Gigliardo said
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The deal between Wilmington and Wheelabrator is expected to be finalized this month. The company will invest $15 million in the first few years to upgrade and repair the facility, according to Rob Joseph, Wheelabrator senior vice president. The city now spends between $18 million and $20 million annually to operate the plant. Wheelabrator will receive from $10 million to $12 million a year to run the plant, depending on the outcome of negotiations, according to Thomas Noyes executive assistant to the mayor who added that the city is also seeking an up-front payment of $10 million to sweeten the deal Wilmington had considered selling the plant for $40 million but decided it was a "cleaner deal" to simply contract out, hire a private operator, and avoid several bureaucratic complexities, Noyes said. Despite the initial outlays, Wheelabrator expects to make a profit over the life of the contract as well as lay the groundwork for new business, Joseph asserted. Labor and energy costs were two areas he singled out for significant cost reductions. He stressed, however, that no workers will be laid off but that labor costs will drop through attrition. This spur to cut costs may lead to development of new technologies, Anfuso said, as privatization becomes more accepted and popular with local government. If this proves true, U.S. and German companies would be ahead of the game because they have developed the most advanced technologies. Internationally, Pacific Rim and Latin American countries may be the hottest new markets, Anfuso said but he doubted that U.S. companies could beat out more experienced international competitors at this time Domestic companies, however, are small players, compared to French and British businesses that got a jump years ago when their governments encouraged private business to take over public facilities. To do business in the United States, foreign companies have formed partnerships with U.S. corporations. Wheelabrator, owned by WMX Technologies Inc., is one of the few exceptions. JEFF JOHNSON
Microbiologists call for action to protect global drinking water quality The safety of drinking water is declining throughout the world because of microbiological contamination, according to the American Academy of Microbiology. The group released a new report and recommendations for action on May 22 at the American Society for Microbiology meeting in New Orleans. The decline is not just in Third World countries, but in developed countries as well, said Rita R. Colwell, president of the Maryland Biotechnology Institute at the University of Maryland. "It was only with the introduction of the water treatment system and sewage system coupled with chlorination around 1900 that we put up a wall between us and infectious agents. That wall is beginning to crumble Leaks are occurring. And we may be facing serious epidemics in the future." As an example of such threats, Eric Minz of the U.S. Centers for Disease Control and Prevention described a cholera epidemic that began in Peru in 1991. Within three years the epidemic had
spread to nearly all of Central anc South America. After five years, cholera remains epidemic south of the U.S. border, having caused 10,000 deaths. "The cholera epidemic was really just a snapshot of how bad things have gotten," Minz said. Minz estimated that there are more than 3 billion cases of diarrhea worldwide each year, resulting in 10 million deaths, many caused by waterborne microorganisms. The report, "A Global Decline in Microbiological Safety of Water: A Call for Action," recommends renewed efforts in watershed protection, official reporting of waterborne diseases, and public education. In addition, continued technology transfer and R&D on low-cost, low-technology water treatment systems are needed. "The techniques we use for water treatment trace back to the turn of the century," Colwell said. "There has to be research to take advantage of new developments in bioprocess engineering and environmental biotechnology." —STEPHEN HART
BUSINESS Federal cleanup market favors proven technology Market trends for federal facility cleanups will drive contractors to avoid using innovative cleanup technologies, market analysts predict. At the Future of the Federal Facility Cleanup & Redevelopment Conference May 1 in Washington, D.C., experts forecasted that fixed-price contracts, a shift to spending more on remediation than on characterization, and fewer contracts will translate into a preference for proven technologies. The Department of Defense market experienced a dramatic shift in 1995 with more spent on building on-site cleanup facilities than on site studies, said Joan Berkowitz, managing director of Farkas, Berkowitz & Co., an environmental market consulting firm. She said this trend would continue through the decade. The Department of Energy cleanup market, the nation's largest, also will follow this trend, she said. However, with the bulk of spending now going to actual cleanup work, contractors will use proven technologies at predictable costs, "which is bad for innovative technologies," she said. Most federal agencies have instituted contract reforms that favor fixedprice contracts, which will also chill technology development. As fixed-price contracts become standard, said Robert Blackwell, senior vice president of OHM Corp. "most companies are going to go with field-proven technology [because] it costs too much to prove a new technology in the field." There also will be fewer contracts, according to Gurinder Rana, chair and CEO of R&R International, a small remediation services firm in Akron, Ohio. He said this reduction will lead to contractors that are unwilling to "stick their necks out" and use unproven technology. —DANIEL SHANNON
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