Nassau County, New York is counting on Morgan Stanley as well as recently appointed operator United Water to find a private investor for its sewer system – a potentially high-revenue-generating infrastructure asset.
The wastewater management apparatus is used by a community of one million, according to Morgan Stanley, who the county in 2011 retained as its adviser. Wall Street firm Morgan has pegged the Nassau system as capable of earning as much as $120 million annually.
As adviser, Morgan Monday confirmed a request for information (RFI) had been issued for a private investor. The deadline to respond to the mandate is Wednesday, July 11, according to the RFI.
Meanwhile, United Water, the Harrington Park, New Jersey, company that Nassau in May contracted, “would be the operator each investor would be assuming as part of a potential P3 [public-private partnership] of the system”.
A draft of the would-be concession agreement included in the RFI cited a 50-year lease, while the eventual investor would be on the hook for a $60 million base fee to United Water, the document read.
The RFI went on to repeat the oft-cited description of the system as a “local monopoly”.
Nassau County was established in 1899. Its sewer system consolidated in 2003. The county hired United Water, which is owned by Suez Environment, after a request for proposals (RFP) campaign. United Water is the second largest US water operator behind Veolia Water.
At Morgan Stanley, the RFI search is being headed by Perry Offutt, a managing director with the financial services provider who led Akron, Ohio, in a water privatisation effort.