USFilter Bid to Run Indianapolis Utility Endorsed

Feb. 27, 2002

Even though it was not the low bidder, water giant USFilter was recommended by city officials yesterday to manage the Indianapolis Water Company, according to Doug Sword of The Indianapolis Star.

Other factors weighed in favor of the French-owned company, including a promise to spend at least $17 million to remedy chronic taste and odor problems with the utility's water. The company also promised to invest $5 million in a White River treatment plant and $1 million to expand a purification plant that produces water for high-tech industries.

USFilter's proposal beat out that of United Water, another French-owned worldwide water company. USFilter was chosen in hopes that the city will be able to complete its proposed $515 million purchase of the water company from Merrillville-based NiSource. The city still needs to win approval for the deal from state regulators before an April 30 deadline set by NiSource to complete the deal.

Both management bids were described as strong by Michael Hudson, who recently retired as vice chairman of Rolls-Royce North America and was appointed by Mayor Bart Peterson to head the city's team to evaluate bids.

At yesterday's meeting of the city's waterworks board, Hudson will recommend that USFilter be given a 20-year contract to run the utility. If the board agrees, the contract still must win the approval of the City-County Council at a scheduled March 18 meeting.

Hudson explained to Sword that bids to run the company are difficult to compare because the utility's manager can add up to 25 percent onto its fee by meeting certain goals, including ones reflecting water quality and customer services.

Acknowledging that United Water offered to run the utility for less, Hudson noted that there were a number of other factors considered, such as the bidders' technical approach to running the company and how they planned to deal with employees and customers.

The management fees proposed by the companies were given a weight of only 20 percent in the evaluation, with other factors accounting for 80 percent of each company's grade.

Source: Indianapolis Star

Image courtesy Institute of Chemical Research of Catalonia (ICIQ).
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