Saint John is in the middle of a clean water crisis. With three boil orders so far in 2008, and plans to solve the longtime problem mired in politics, residents' health is potentially at risk each time they turn on their taps. It's a Third World dilemma in New Brunswick's largest city. Officials say it will cost $200 million and take seven years to fix. How it went wrong, what must be done, and why it can't wait.

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MONCTON - With the push of a button, the long, rectangular pool inside the water treatment plant gurgles to life. Churning like jets of a giant Jacuzzi, the clear water quickly turns mud brown.

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Water, water everywhere: How Moncton got its pure back

"It gets a lot worse than that," Rick Bennett said, standing above the Trident upflow clarifier, one of four inside the Moncton filtration plant. "If you wait a few minutes, it gets even more brown."

Bennett, a manager with Veolia Water, gives as many as 500 plant tours each year, mostly to school children. People are wildly curious about the state of their drinking water because most worry at some time or another that the water destined for their taps is filthy.

People usually stop worrying after Bennett walks them through the purification process, a complicated routine that begins when the impurities in the water bind together with chemicals. The chemicals are then removed, along with organic materials through a series of stages those in the filtration industry call a "train."

Finally, the water is disinfected with chlorine, supplemented with fluoride and sent along pipes to people's homes, 117,000 in Moncton, Riverview and Dieppe.

"We've never had a hit of E. coli or coliform leave the plant," says Bennett, 46, and an engineering technologist who has worked at the plant since it opened on Oct. 21, 1999. "In the reservoir, where we draw the raw water from, it's full of E. coli and coliform."

The plant is a big success story for Veolia, something the company tries to sell to other cities in Canada and beyond. For those who know the Moncton water story, however, it is simply one part of the push for privatization.

After the plant was commissioned, Moncton city council considered signing a contract to turn over the entire water distribution network to Veolia Water.

The plans caught the attention of the Canadian Union of Public Employees - which has more than 20 members working at the Moncton utility - and some high-profile politicians, including then NDP leader Elizabeth Weir. Avi Lewis, host of the CBC Newsworld show counterSpin, held a town hall meeting in Moncton, when opposition swelled to its fullest in 2001.

Protesters donned mock pig snouts and business suits outside of city hall, and letters to the editors decried the possible loss of control over a public resource led council to balk and leave the distribution network as is. The city currently spends about $3 million a year maintaining that long neglected system.

Moncton managed to escape a political storm when the private treatment plant was still in the planning stages. Only three municipal employees worked at the old Highfield water pumping station, where a basic chlorination system was used, and they transferred to the city water utility's distribution network following the commissioning of the modern filtration plant.

But the motivation behind privatization was that Moncton residents were fed up with their dirty water, largely the result of no filtration and a crude chlorination system. The city issued a flood of boil-water orders through the 1990s, including a three-week run a few months before the plant opened, when then mayor Brian Murphy, a fierce advocate for public-private partnerships, toasted the occasion at a city council meeting with a large glass of water.

Aside from boil orders, issued each time the levels of E. coli or coliform were too high, the water was chronically cloudy and held high levels of chlorine. This also meant the levels of trihalomethane were high, a chemical reaction occurring when chlorine binds with organic matter. It is called THM, and is linked to long-term health risks such as cancer.

Moncton's drinking water didn't taste very good, either, and it smelled awful. Source water at the Turtle Creek Reservoir, just outside Riverview and within a short walk of the plant, is far from clean. Geese and other birds and animals swim in the reservoir, leaving feces behind near the intake pipes.

"The water was horrible," Bennett said. "It was dirty and colorful. When you'd fill the bathtub, after three or four inches, you could hardly see the bottom."

City officials were concerned their water's reputation would drive away residential and business growth.

Don MacLellan remembers the first time he saw the local water. Moncton's assistant city manager moved from Calgary in 1990 and the first night filled the bathtub for his children, then five and three years old. They frowned.

"They said, 'We have to get in that?'" MacLellan recalled.

Moncton decided it needed some private money to help build a filtration plant in 1993, after preliminary design estimates indicated it would cost $32 million to build in-house.

Moncton city staff realized consumers - people who pay water bills in the three communities - couldn't afford that. And the federal and provincial governments had turned down the city's request for funding, pushing city council into a corner.

They hired independent consultants to oversee the project and opened a request for qualifications to find out if the private sector could do it cheaper.

This was about the time that Prince Edward Island developed the $1.3 billion Confederation Bridge connecting New Brunswick and the island with private industry involvement. The benefits of a public-private partnership were on display close to home.

Water companies design plants specifically for a location and the peculiarities of the water that needs processing. The patents on the technology are guarded, so municipal operations don't often know how to best design a plant, and critics say there is a tendency to overbuild.

That's why the request for proposals made sense, said Ensor Nicholson, Moncton's director of water systems. The city could examine the different technologies available and see who could build the plant better and smaller.

"When you compare those costs, square footage matters because you pay for what goes underneath the roof," Nicholson said.

After nine companies sent qualifications, staff eventually opened bidding on the plant's construction, with three parties replying. One dropped out and between the last two, U.S. Filter won out. (Following a buyout and a corporate re-shuffle, the company became Veolia Water.)

It is the largest publicly-traded water company in the world, serving 131 million people in 60 countries. Its biggest operations are in France, where the company has operated for 155 years. Emperor Napoleon III awarded an earlier version of the company, Companie Generale des Eaux, a contract to provide the city of Lyons with water in 1853 and it soon won favour in Paris, too.

With all its expertise, Veolia presented a plan to build the Moncton plant with a much smaller footprint, at a cost of $24 million, saving $8 million in capital costs for the utility. The agreement Moncton eventually signed is similar to a lease-to-buy. The private firm fronted the money and built the plant in 532 working days and then took over operations. After 20 years, the city will own the plant outright and can renew or terminate the operating agreement. The design life of the building is 40 years, although Bennett said the routine maintenance program Veolia follows is so rigorous the plant could possibly outlast that.

Veolia claims that over the course of the contract, Moncton water users will pay $12 million less in capital, operating and maintenance costs over the life of the contract than if it had been done by the utility alone.

Water bills rose by $100 a year for the average household in the first year and the bills have continued to climb. But officials say it's not fair to suggest all the increases are due to the plant - the distribution side is also undergoing a fair number of upgrades.

The plant is run by eight employees, who mostly work 8 a.m. to 4 p.m. weekday shifts. The facility can be run online from computers on a secure network, and operators often make adjustments from home.

To this day, Moncton water officials believe they signed a great deal.

The contract is technical and detailed, Nicholson said, with eight clauses providing Veolia the opportunity to charge more over the length of the contract if their costs - chemicals or electricity go up.

A typical Moncton family of four now pays $661 annually for water and sewerage, though the cost fluctuates from home to home because they are metered and pay for the amount they use. Riverview and Dieppe buy water from the Moncton utility in bulk and charge customers a flat rate.

In Saint John, residential customers pay $696 a year for unlimited water and sewerage, and the water is unfiltered and subject to the occasional boil order.

If the contrast is compelling, don't ask Moncton officials to comment on them. They refused to compare water systems between the two communities. The estimated cost of two new filtration plants in Saint John, for instance, are $136 million - a much higher price than the single, $24-million facility at Turtle Creek.

"The people of Saint John are well served by their utility," said Jack MacDonald, the general manager of engineering and environmental services. "There are very good, competent people working at Saint John Water."

In an interview in 2002, then Saint John mayor Shirley McAlary said Veolia's predecessor, U.S. Filter, contacted her office to talk about building and operating new filtration plants, but nothing came of the talks.

Veolia's Moncton water plant is the first of its kind in Canada, but despite its success here, municipal politicians across the country haven't sought out similar plants in their own communities. The company has reported less than spectacular profits recently and its shares have dropped in value.

Controversy usually lurks when water and privatization are mentioned in the same sentence. And the Moncton city officials say there are no plans to reconsider forging a public-private partnership for the distribution network.

"All the forces rose up and all the issues came out at that time, for instance, are we selling out our water?" MacLellan said. "Regardless of how well we tried to communicate and say, 'look it's only an operations and maintenance agreement' all of those things got in the air, the whole idea that we were selling our water and losing control of our water system. It wasn't where we were headed but it was enough that the council of the day said, 'forget it.'"

But today, the water from the Moncton Veolia plant is clear and safe. The THM levels have been reduced by 75 per cent. Veolia, Bennett said, has more stringent guidelines than the national drinking water standards determined by Health Canada. Since the plant opened nine years ago, there has not been a single boil order.

But the most obvious proof is the look of the water when it comes out of the extensive purification process.

"If I dropped a dime in that water, and it was sitting at the bottom 18 feet down, you could see that it was a dime and if your eyesight was good enough, you'd be able to read it," Bennett said. "That's how clear the water is."