A controversial consulting contract to study ways to improve efficiency at the Bureau of Water and Wastewater is not a first step toward privatization of the city’s water supply, Rudy Chow, director of the Department of Public Works, testified last night.

At a hearing before the City Council’s taxation and finance committee, Chow dismissed charges by Corporate Accountability International that the procurement of consultant services was part of a strategy by the French company Veolia to secure control of municipal water services.

“This is not the first step in selling the water system; this is the first step to ensure we stay in public hands,” Chow said. By reducing costs in the water supply, he said, he hopes to reduce water rate hikes, which were increased 41.7% across three years in 2013.

Since August, the Boston-based accountability group has held protests in front of City Hall and conducted a campaign among local media to attract attention to what it sees as an attempt by Veolia to win the “Water and Wastewater Plants Efficiency Study” from Chow’s department.

The $500,000, one-year contract has not yet come before the Board of Estimates for ratification. Chow declined again last night to say whether Veolia is the leading candidate to win the contract, saying the vetting process has not been completed.

Several Council members wondered why the city couldn’t do the efficiency study itself. “Why do we always go outside for consultants? A lot of the consultants used to work for DPW,” asked Council President Bernard C. “Jack” Young.

Chow answered that his department does not have the technical capability to perform such a task.

“Milking What Our Founding Fathers Did”

“All of our design work is done by our consultants,” Chow said, referring to the tens of millions in new construction at water treatment plants mandated by state and federal laws.

Young encouraged Chow to “look inside” and “engage unions and current workers.”

“We do have expertise within the agency,” Young insisted, to which Chow responded, “I wish I had 20 more years to rebuild the [water supply] system. All we are doing is milking what our founding fathers did for us.”

Erin McNally-Diaz, of Corporate Accountability International, recited several horror stories when cities turned over their water systems to Veolia. She said Indianapolis spent $29 million to terminate its contract with the company.

Veolia has developed a process known as “peer performance solutions” in order to win a percentage of savings that it recommends to municipalities. “This is the opening of the door to privatization,” McNally-Diaz said.

Arthur Cohen, a resident of Mt. Washington, noted that 25 towns and cities in the U.S. have “taken back” their water systems from Veolia, joining 27 municipalities in France, including Paris, that terminated their agreements with the company.

Veolia, which holds close to 200 water supply contracts in the U.S., was not represented at last night’s hearing.

The French company is currently the private contractor for the Charm City Circulator bus system and also leases the city’s underground steam-heat system serving downtown and South Baltimore.

Five Tasks of Efficiency Study

The $500,000 efficiency study in question includes the following “scope of work,” according to city documents:

• Evaluate Montebello Water Filtration Plants 1 and 2, Ashburton Water Filtration Plant, Back River Wastewater Treatment Plant, and Patapsco Wastewater Treatment Plant operating and maintenance processes, with a particular focus on the areas of energy usage, chemical usage and pricing, residuals management, and labor efficiencies.

• Recommend implementable measures for improving and/or streamlining operating processes, increasing efficiencies, and reducing costs while maintaining or improving service levels.

• Quantify efficiency related recommendations.

• Analyze Baltimore Water and Wastewater Plants’ labor and non-labor practices, use of technology, compliance with rules and regulations, and key performance statistics and trends for consistency with best industry practices.

• Prepare a report summarizing findings and present analysis and recommendations to the Department of Public Works.