Azurix, an affiliate of Enron Corp., has agreed to acquire Philip Utilities Management Corp. (PUMC) for approximately $120 million. The acquisition would make Azurix a major participant in the Tolt Treatment Facility Project in Seattle, Wash.
A giant in the electric utility business, Enron has begun moving into the international water and wastewater industry. Enron acquired the British water and sewer company Wessex Water PLC in 1998 for $2.4 billion. In July, Enron created Azurix to own and operate strategic water and wastewater assets, to provide related services and to develop and manage water resources.
Enron has been focusing its water industry efforts in Europe, Southeast Asia, and South America, particularly hoping to benefit from the developing worlds need to build water and sewer systems. Azurixs purchase of Philip Utilities Management brings the company a variety of water and wastewater projects in the United States and Canada.
"This transaction supports our global strategy of not only owning and operating water and wastewater assets, but providing related services to municipalities and industrial customers who are increasingly seeking to outsource their water supply and wastewater treatment needs," said Rebecca P. Mark, chairman and CEO of Azurix. "We look forward to building upon PUMCs success in these areas and believe this transaction will provide a platform for the expansion of our North American activities."
The planned 120 mgd Tolt Treatment Facility will supply water to approximately one-third of the 1.3 million people served by Seattle Public Utilities. The filtration and ozonation facility will permit continuous operation of Seattles Tolt water source during periods of high turbidity.
Reaction to Azurixs acquisition of Philip has been positive. Camp Dresser & McKee partnered with Philip Utilities Management as CDM Philip to win the Tolt project bid. Paul R. Brown, Camp Dresser & McKee Senior Vice President said, "We are very pleased by the addition of Azurix to the team in Seattle. They restore the financial strength and capabilities that made us successful in winning this project initially."
"We expect that the transaction will establish a more secure financial backing for our project," said Liz Kelly, Seattle Public Utilities Program Manager for the Tolt Project. "We dont anticipate any significant personnel changes on the project as a result of the purchase."
According to Kelly, the Tolt project is ahead of schedule, with about one-third of the total construction completed, and is still performing within anticipated budget levels.
Created in 1994, PUMC has developed partnerships with municipal and industrial clients for the design, construction, management and operation of water and wastewater treatment facilities.
In addition to the Tolt Treatment Facility Project, Phillip Utilities Management operates residuals management and water distribution utilities in Texas, and the water and wastewater facilities operation in Hamilton-Wentworth, Ontario. Early in May, the City Counsel of Hamilton voted its approval of the acquisition by Azurix.
Last year, John R. Wodraska resigned his position as general manager of the Metropolitan Water District (MWD) of Southern California to become marketing director of Azurix. Wodraska left seven weeks after Metropolitans board approved a historic, 30-year water exchange agreement with the San Diego County Water Authority. Wodraska was instrumental in drafting the memorandum of understanding, which ended a two-year impasse between the two agencies over the delivery of water to San Diego from the Imperial Valley.
Wodraska also was instrumental in the negotiations between state and federal resource agencies as well as Californias urban, agricultural, and environmental interests that resulted in the 1994 Bay-Delta Accord, defining the operation of the San Francisco Bay/Sacramento-San Joaquin Delta drinking water source for 16 million Southern Californians.
