The fight between the Pittsburgh Water and Sewer Authority and the company that managed its operations for three-and-a-half years has entered a new and more combative stage.
Veolia Water North America has decided to withdraw from mediation with PWSA and instead enter into a formal arbitration proceeding. Arbitration and mediation are both provided for in the contract signed by both parties in 2012.
When PWSA launched the mediation process in October of 2016, it claimed the company, among other things, “grossly mismanaged PWSA’s operations, abused its positions of special trust and confidence, and misled and deceived PWSA as part of its efforts to maximize profits for itself to the unfair detriment of PWSA and its customers.”
The change in chemicals could have led to elevated lead levels in the city’s tap water, officials contend. PWSA also faces a suit related to metering and billing, which the authority blamed on Veolia’s management of the system.
The authority was seeking $12.5 million from Veolia.
Veolia spokesman Paul Whitmore said the company fulfilled its contract and has presented its case through the arbitration process. However, Veolia has lost faith in that process, he said.
“It’s the result of a stalled mediation process and PWSA’s ongoing attempts to shift blame to third parties,” Whitmore said.
At the same time, the company has added claims of defamation to the proceedings.
“Really, as a result of PWSA’s ongoing false statements about Veolia’s work in Pittsburgh,” said Whitmore, but would not elaborate on the claim. “I’m sure that additional information will come out during the arbitration process. But at the moment, PWSA has continued to mischaracterize our role and our responsibilities.”
Neither the Peduto administration, nor PWSA would comment on the arbitration.
Whitmore said there was no single event that lead to Monday’s decision.
“We’ve been very respectful of the mediation process,” he said. “It was not an easy decision for us to move on to a formal arbitration, but it was time to take this step and we’re confident that after a full review of the facts the arbitrator will find in the company’s favor.”