Submitted by arlenegloria on Sun, 02/07/2010 - 04:51

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Water deal could be trouble

As Mayor Richard M. Daley considers auctioning off Chicago's water system in a deal that could fetch upward of $1 billion, water privatizations in other cities are awash in controversy.

Atlanta scrapped a 20-year deal to outsource management to a private firm after it produced rising costs and cloudy water. Even in Indianapolis, where the privately run water system is considered a national model, there have been complaints about big rate hikes and even a class-action lawsuit claiming overbilling.

Closer to home, the southwest suburb of Homer Glen is fighting a 33.7% rate hike request by Illinois-American Water Co., a 23.5%-owned affiliate of RWE A.G., a large German utility.

"We've been powerless to have any expectations or standards," says Mary Niemiec, a trustee and co-chair of community and economic development in Homer Glen.

Please Visit Crain's Chicago Business to Read More: http://www.chicagobusiness.com/cgi-bin/mag/article.pl?article_id=32664