The Bronx Water Treatment Plant -- Unbelievable Bumbling At All Levels

Here is a story that you have not been following, but you should be.  The main villain in the story is the Federal EPA.  The City administration (current and prior) and contractors do not come out well, although perhaps not villains.  The Manhattan DA looks like a complete fool.  The New York Times comes off as clueless, accepting whatever they are told by people in authority without ever asking even a semi-intelligent question.

We begin with an article from the NYT of Monday, January 13:  "Inquiry Is Said to Find Fraud at Bronx Water Plant."   It seems that the Manhattan DA has been conducting an investigation of financial problems at the Bronx water treatment plant under construction, and has uncovered (drum roll) fraud!  The main accused perpetrator is Schlesinger-Siemens Electrical, an affiliate of the German engineering giant Siemens AG.  A so-called "deferred prosecution agreement" with Siemens is in the works.

Well, this is the NYT parroting some kind of publicity out of the DA's office.  Can they tell us some of the background?  Basically no, other than that it is a "troubled $3.2 billion"  project, and then this line:  "The federal Environmental Protection Agency has fined the city $5 million for delays on the project, which was mandated by a 1998 consent decree."

We can learn some more by turning to Bronx Week of August 16, 2012.  Turns out that although the City signed a consent decree agreeing to build the plant in 1998, the original EPA order was in 1993.  Also, according to a quote from former City Comptroller (and current candidate for mayor) William Thompson, "The DEP told the public that this project could only cost $992 million,"  So the cost has well more than tripled. 

Bronx Week also tells us that the alleged purpose of the plant was that the federal EPA "fear[ed] water from the Croton water shed. . .  was in danger of contamination."  It is a filtration plant, designed to remove harmful bacteria -- $3.2 billion to remove bacteria.  OK, here we are in 2013, 20 years after the original EPA order, and the plant still isn't done and hasn't filtered a single drop of water yet, and we've been drinking away at the Croton water for all these 20 years.  Are the bacteria levels elevated in the slightest?  Of course they are not -- if they were, it would be big news.  Has even one single person ever gotten sick?  Not that I've ever heard of, and again, if it happened it would be big news, and I've been following this one closely. 

Here is the statement from the NYC Department of Environmental Protection as to why they are engaging in this gigantic project.  Lots of gobbledygook, but this looks to me like the key quote:

The Croton System has provided high quality water to consumers for many years. Although Croton water currently meets all existing health-based water quality regulations, it frequently violates the aesthetic standard for color. Water quality problems have resulted in the Croton System being removed from service on numerous occasions, typically during the summer and fall months (in four of the last several years – 1992, 1993, 1994 and 1998). The entire system was shut down for most of 2000-2001 because of contaminants that leaked into the [aqueduct].

Hmmmm.  $3.2 billion because of non-health-related "color" problems, most recently 12 years ago?  If the color level gets a little high in the Croton water, why isn't it a far better solution to switch over for a while to water from the other systems, as they did in prior years, instead of blowing $3.2 billion on a filtration plant?  Oh well, but if the cost went from under $1 billion to over $3 billion, it's not so surprising that there could be some fraud involved.  Or is there?  Back to the New York Times to learn what the "fraud" is supposed to be:

In one, the company essentially used smaller minority-owned subcontractors as fronts to make it look as if they had provided roughly $10 million in labor and equipment, when it was really provided by Schlesinger-Siemens or other companies, the people said. By doing so, the company evaded city contract requirements that it hire a certain percentage of contractors owned by minorities or women, or certified by the government as disadvantaged.
The second arrangement, the people said, involved fraudulent filings with city agencies that made it look as if the company, as required for bidding and the contract, had a licensed master electrician on site overseeing the work: installing the systems that will run the huge plant.

That's right, in a plant where they are blowing $3.2 billion to achieve no meaningful result, the only alleged "fraud" the prosecutors can come up with consists of failing to hire enough of the mandated politically connected cronies for the job.  Shouldn't we be happy that they are at least using some competent German engineers?

Meanwhile, is it anybody's job to ask whether this plant is delivering any value and whether there are cheaper ways to assure the quality of the drinking water -- namely, the ways that the quality has in fact been assured for the past 20 years with no plant?