SAWS rate hike approved...Vista Ridge Pipeline - Funded (San Antonio: construction, contractor)

[steve807]

Looks like the pipeline builder is making some news (yesterday). Looking for some investors to get this thing going.

Wonder if this will be an echo of some of the San Antonio / Oscar Wyatt excitement some decades ago.

[Bo]

Originally Posted by steve807

Looks like the pipeline builder is making some news (yesterday). Looking for some investors to get this thing going.

I was more than a little dismayed by that news about the winning bidder seeking investors to avoid bankruptcy. If SAWS invests heavily in the project, they'll be taking the risk on it and that changes the equation about the ultimate cost of the water it produces.

[WilGar]

Am I the only one that smells something fishy?

[Bo]

Originally Posted by WilGar

Am I the only one that smells something fishy?

The European vendor underbid the contract and is now in financial trouble. It would take years to re-do the RFP process to go with a different vendor and a different water source. I don't know if I'd call it "fishy," but maybe "foolhardy" or "shortsighted." The SAWS people may have even seen this coming, but could do little to prevent it. Government is often handcuffed into accepting the low bid on projects, even if it's unrealistically low.

It'd be fishy if they hadn't accepted the low bidder and had accepted a bid from a company owned by someone with ties to members of the council.

[steve807]

There will be more years of smell on this deal.

[WilGar]

Originally Posted by Bo

The European vendor underbid the contract and is now in financial trouble. It would take years to re-do the RFP process to go with a different vendor and a different water source. I don't know if I'd call it "fishy," but maybe "foolhardy" or "shortsighted." The SAWS people may have even seen this coming, but could do little to prevent it. Government is often handcuffed into accepting the low bid on projects, even if it's unrealistically low.

It'd be fishy if they hadn't accepted the low bidder and had accepted a bid from a company owned by someone with ties to members of the council.

There was probably a provision for a bidder to be viable in the bid and the lowest bidder can be disqualified.I see this as a $$$$$ sinkhole.

[steve807]

European vendors mean lots of fun and exotic travel for local contract monitors. It's not a bad deal for everyone.

[WilGar]

Originally Posted by steve807

European vendors mean lots of fun and exotic travel for local contract monitors. It's not a bad deal for everyone.

I forget. Is BOONDOGGLE, one or two words?

[steve807]

Should be back on track as soon as the vendor sells an 80% interest in the project (of course the devil is in the details, depends on Abengoa's commitment as a 20% minority pipeline builder/operator):

Before joining City Council, I had long pushed for a water project large enough to help accommodate our City's inevitable growth and ensure its prosperity for decades to come. The Vista Ridge pipeline is that project. My vote for the pipeline was the most important one I've taken in my three years on Council.

The Council's decision in October 2014 was unanimous. So was our vote last October to raise SAWS rates in part to begin preparations for the project. Nobody on Council was just hoping for the best with this $3.4-billion agreement. We knew the contract that SAWS had worked out with Abengoa put the risk on the contractor, not the utility or the City.

Now, with Abengoa in a financial crisis that could force the company into bankruptcy reorganization, the contract is being tested. And it's proving to be resilient.

The agreement allows Abengoa to sell a portion of the project to another investor, subject to approval by SAWS.

Abengoa says it is now looking to sell an 80-percent stake in the pipeline. Given the high quality of this investment - with the creditworthy SAWS as the guaranteed buyer of the water - I am confident it will attract investment banking firms and investor groups with financial strength. Once Abengoa selects the strongest proposal and SAWS Trustees amend the contract, the uncertainty and concerns will most likely evaporate and the pipeline will be built.

In October 2014, Council explicitly handed the responsibility of ratifying contract amendments to SAWS Trustees. Council has already unanimously endorsed Vista Ridge twice. I see no reason for Council to now interfere with SAWS's administration of the contract, though my colleagues and I will insist on detailed reports as this project progresses.

I firmly believe that, in the years to come, we will look back on the decision to undertake this project as a wise one.

Sincerely,
Joe Krier, District 9 City Council

[WilGar]

Pipeline builder, through nonprofit, seeks $885 million state loan - San Antonio Express-News

Another Tool in the Tool Box???

Or more correctly, are we being 'TOOLED"?