Go ARMY!

After only 3-years of “privatization” here in Alaska, upon the military utility installations' infrastructure, the ARMY is starting to fight back at Doyon Utilities - a 50/50 Joint Venture between Doyon Limited and Fairbanks Sewer & Water. When the ARMY was forced to bid away the civil servants' responsibility at running the utilities at Ft. Wainwright and other “mission critical” installations throughout Alaska, due what was considered historical cost overruns through mismanagement, the awardee requested to become “regulated” under the authority of the Regulatory Commission of Alaska – the same outfit that makes sure your phone bills are tame. Rather odd, as regulation is usually a bad thing for a business's bottom-line and in most cases a forced realization rather than through a request – self-inflicted punishment ring a bell? But in this case it was done as a convenient way to rip off the government. See, when the government saw that this bidder was requesting such state oversight, the advisory team grading all potential bid entries felt comfortable that through regulation the costs would be controlled, based on data available for similar situated utilities in Alaska – this over a “Fixed Bid” contract. That was the intent through requested involvement by the state regulators. But soon after the bid was awarded, the awardee convinced the regulators that its “sole” customer was the ARMY, a paramount decision making win that would in essence “control” somewhat the regulators jurisdictional oversight. Now when it came time for Tariff increases – usually increases away from the comfortable costs upon which the contract was awarded – such changes were pre-approved by that “customer” through the “contract” language and agreed so by the “Contract Officer In Charge”. So the regulators just gave in, without any semblance of oversight - a genuine “American Greed” Catch-22 gimmick it was. It sounded good, but what were the Regulators too do if the customer already agreed on getting ripped off? Nothing! In fact, for this awardee, it is noted in the bid grading documents the following warning: “Regulation of utility services is seen as an enhancement to price and service stability. A utility provider generally has a monopoly on a service area, and regulation provides a means to represent the consumer's interest in setting appropriate rates and quality of service. Regulation by an independent authority provides the greatest representation for the consumer but also represent the interests of the utility service provider. For the purposes of utility privatization, the Government is selling the utility distribution or collection system to a single entity. This in effect is creating a monopoly for that entity in providing service. Therefore the degree of regulation has an impact on the level of risk associated with long term price and service stability.” and then the team of experts graded this as a very low risk. Low? In one particular tariff action, an increase in the “Inception Rate” that was supposedly approved by the “contract” language, Doyon wanted more money to cover millions in property taxes that they missed the boat on in their original bid and was not included in the contract. The “Privatization” allowed a private entity to purchase the property from the government, which for many years remained away from the city tax assessors. But once sold, guess what came a knocking at Doyon Utilities Corporate headquarter's front door? Since Doyon informed the Commission that the increase had been approved, so it was approved. Until a JAG with the ARMY found out about it, that increase was postponed! Bottom-line, being a “Regulated Utility” is not working here. So abuse has seen this contract through year 3, and to date, it is costing the taxpayers much more under "privatization" then when under control of the servants, which was considered a very inefficient ways and means to perform business when the taxpayers' were burdened with the costs. To date, we are realizing 100% cost overruns, an even greater then ever burden upon the U.S. Treasury. So the ARMY is fighting back and requesting that “regulation” ceases to exist in efforts to possibly dump the current awardee upon this 50-year billion dollar contract, or at least get tough and get back control upon what appears to be escalating and out-of-control cost overruns, contract disputes and the following warning: “We are currently involved in several significant contract dispute issues, with more on the horizon.” The bottom-line, this entire contract was suspicious in the beginning, suspicious in the award stage and suspicious today. Especially with this suspicion comes the question, how much money did the 10-shareholders of Fairbanks Sewer & Water make on this deal, when they sold their 50% interest in Doyon Utilities to Corix, a Canadian investment business acting as a shell for Inland Pacific Resources? The millions in goodwill that was paid for in this sale, along with the $50-million in preferred stock offered the 10 stock owners right before the sale following the billion dollar award by the ARMY, it may have been all part of the scam and today we see how it is failing the intent. I believe the money being taken in is being used as “Kick-back” money in return. The Regulatory Commission should immediately wash their hands this mess and let the ARMY do what they do well, defend America's interest. I hope there comes an investigation into this entire state of affairs, this stinky Fairbanks Water & Sewer mess, as I bet there will be found suspicious activity and we shall let the Justice Department handle that matter, justice due for taxpayer injustice done!