This November, Manalapan voters will head to the polls to decide whether to sell their water utility to Veolia for $4 million. The privatization deal threatens to put the town’s water distribution system in the hands of a company with a long track record of issues in the U.S. and abroad. Moreover, it would end local, democratic control over this essential, public good and set the stage for higher rates for years to come. 

Right now, towns across New Jersey are considering selling water and sewer systems to the highest bidder. These deals are often posed as fixes to systems’ financial challenges. However, Manalpan’s system isn’t even in distress. Politicians want to use the sale as a quick fix to pay off unrelated debt. 

Selling to Veolia is an unnecessary and costly scheme that will introduce plenty of new problems. Here are three key ones:

1. Water Privatization Leads to Higher Costs and Higher Bills

At a Town Hall in August, Manalapan Mayor Musich said, “If we don’t sell the water utility, that $20 million of infrastructure work will be our problem.” But she failed to mention that with a private company, infrastructure costs are still residents’ problem because water companies can recover what they spend on infrastructure through customer rates — and then some. 

In fact, water companies can earn 10% profit on their investments, which adds to the cost of every project and acquisition. This, along with the cost of their income taxes and property taxes, can be passed onto ratepayers through higher bills. 

Considering all this, it’s no surprise that privatized water is more expensive than public water. Nationwide, the average private water company charges 59% more than public systems, and private ownership is the single biggest factor associated with higher water bills. 

And while Veolia promised two years of rate freezes and a limit of 3% rate hikes for the following three years, the company may not be able to keep this promise (as we’ve seen in Pennsylvania) — the final decision rests with the Board of Public Utilities. 

Even if the Board allows the freeze, the bill will eventually come due. For example, when NJ American Water bought Haddonfield’s water and sewer system nearly a decade ago, it promised a three-year rate freeze. But with the company’s latest rate hike, typical households in the town will see their sewer bills shoot up by more than 50% in one go.

2. Private Companies Put Profit Over People

Clean water and sanitation are human rights, and everyone should be able to afford access to these essential resources. But private companies like Veolia don’t have access or human rights top of mind. Their number one priority is profit. Besides higher rates, this can have a variety of negative consequences for a community.

Looking at its track record, we’ve already seen evidence that Veolia isn’t prioritizing customers’ wellbeing. The company’s consulting for Pittsburgh, Pennsylvania and Flint, Michigan has been implicated in both cities’ lead-in-water crises, the latter of which resulted in Veolia paying a $25 million settlement to Flint residents.

Additionally, privatization in general can result in clashes with local policy and government, including on projects for economic development and sustainability. There is no incentive for private companies to cooperate with neighbors or local governments to protect drinking water resources and watersheds or ensure equity and sustainability of water and sewer services.

Private companies may also cherry-pick which areas they provide service in or where they invest in projects to avoid serving low-income communities where they won’t make as much money. When profit is the priority, low-income residents can come last, as they are more likely to struggle to pay their water bills. 

3. Water Privatization Takes Away Local Control and Democracy

With a publicly owned utility, Manalapan has democratic control over its water system. Selling it to Veolia would limit public accountability. Residents would lose the power to demand changes to the system when it doesn’t serve them.

With public ownership, residents can visit their elected officials and share problems they’re seeing. If officials don’t respond, the community can vote them out of office. But any privatization deal would eliminate these options for Manalapan. Residents don’t have a vote in the corporate boardroom. 

Moreover, privatization usually leads to a loss of transparency, as companies restrict public access to information. This transparency is key for communities to understand potential problems in their water systems and push for change.

Ultimately, the people who run public water systems are public servants; they serve the people. But water corporations are first and foremost accountable to their stockholders. 

Selling to Veolia is a Terrible Deal for Manalapan

Manalapan, like many other New Jersey towns, is facing growing infrastructure needs that are essential to delivering safe water to residents. But while privatization has been portrayed as a way to alleviate rising costs, it will only pass them — and more — onto ratepayers. There are other, less expensive options, like federal and state grants and low-interest loans available to public systems. 

This summer, when Hopewell Borough, New Jersey proposed a water system sale, Food & Water Watch worked with local residents to put the decision to a borough-wide vote. The Borough recently announced that they wouldn’t have time to get the proposal on the ballot this November, delaying the referendum vote for at least another year. 

This is giving Hopewell the time and opportunity to pursue other funding options, including a federal grant that would provide more than $2 million to address toxic PFAS contamination and other issues in the municipality’s wells. But if the Borough privatized in the future, it may have to return the money. 

The case of Hopewell shows that privatization is far from the only option to address infrastructure needs. It’s also, by far, the worst one. Privatization deals make water more unaffordable, take away local democracy, and put profit before people. This is not how we should manage the services that provide us with essential clean water and sanitation.

Given all this, it’s abundantly clear — water privatization would be a terrible deal for Manalapan residents. This November, we can stop this corporate takeover by voting against selling Manalapan’s water system.

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