Nassau County eyes sewer system privatisation

RFQ will seek an operator for countywide sewage system, followed by a search for an investor. In 2010, the one million customer sewage system earned the county $116m. Morgan Stanley is advising the county.

Nassau County, New York, is moving ahead with a search for an operator that would assist in a possible “monetization” transaction of its sewer system.

The county has issued a request for qualifications (RFQ) for a potential concession or public-private partnership (PPP), but is willing to consider the “sale, transfer or other disposition” involving all or any portion of its one million customer system, according to the RFQ.

Nassau County hired Wall Street firm Morgan Stanley and set a September 28 deadline for the RFQ, and could opt to hire more than a single manager.

The system underwent a consolidation in 2003, and is heralded in the RFQ as a “local monopoly” historically capable of generating consistent revenue. In 2010, the county said, the system earned $116 million.

The county could issue a request for proposals (RFP) in mid-November after conducting due diligence. A contract would be awarded in late December, with a search for a private investor to follow.

Any investor chosen would provide upfront or ongoing payment in return for entering a transaction, according to the county.

Once the transaction is concluded, Nassau County would no longer charge or collect a fee for the system, and would relinquish all operating control.