The company now running the city's drinking and wastewater treatment plants is the largest water company in the world, a French giant with origins in the reign of Napoleon III.

Veolia Water took over the city's beleaguered drinking water system at the beginning of the month after a city selection panel chose its bid over proposals from three other companies, including the former contractor, United Water.

Ranked second by the selection panel for technical merit, Veolia won the five-year contract with a $15 million bid, meaning a $3 million average annual cost to the city. The $15 million bid was more than $4 million below the company deemed most technically attractive, domestic firm Woodard & Curran.

Woodard & Curran ran the Gloucester systems until 2004, and then had a falling out with the city, which inked a five-year deal with Earth Tech, a company later purchased by United Water. Woodard & Curran now operates the water system in Manchester.

Under the municipal bidding system, the selection group evaluates the technical aspects of each proposal and ranks them before finding out their financial terms.

"When the group reviewed the technical proposals, they were very close, very similar, with Woodard & Curran first and Veolia second," Public Works Director Michael Hale said. "It would have been difficult to make the case that the difference was worth $4 million."

Veolia becomes the second straight Gloucester drinking and wastewater plant operator owned by a French multinational.

The parent company of outgoing operator United Water was the French energy giant Suez, which is in the finishing stages of opening a liquefied natural gas terminal off the Gloucester shore.

United Water's technical proposal for a new contract was ranked last by the selection committee, and was also the second most expensive at $17.4 million.

United Water was the operator presiding over this summer's coliform bacteria emergency and subsequent 20-day boil order, a fact that may not have enhanced its chances of landing the deal.

During the boil order, when the water system was under intense scrutiny, city officials lobbied United Water for additional manpower and the state cited problems with personnel certification at the Babson Treatment Plant.

The city is facing at least $80,000 in fines for the water quality violations and has spent $600,000 on the crisis even before it embarks on an anticipated $6 million in drinking water infrastructure work.

The third-ranked technical bid was from Severn Trent Services of Fort Washington, Pa., which came with a $16.5 million bid.

Veolia is the largest water treatment company in the world, with 4,400 operating contracts in 64 countries serving 80 million people, according to their 2008 company brochure.

The company traces its roots back to the middle of the 19th century, when the french emperor Napoleon III established a series of private companies to bring running water to cities.

The size and breadth of companies like Suez and Veolia have alarmed some, concerned that the corporations intend to ultimately buy and control public infrastructure.

Mayor Carolyn Kirk denied a bid from United Water to buy the city system last year and even during this summer's water crisis maintained that the city system was not for sale.

Like other new contracts this year, the city took extra time to rewrite its water and sewer operator proposal requests. It kept United Water on for a series of temporary month-to-month deals since the summer while the bid process was finalized.

While the primary components are the same — drinking and wastewater treatment plant operation — the new deal has some changes meant to drive efficiency.

In its new deal, Veolia will be responsible for covering energy and chemical bills at the plants, which used to be picked up by the city.

Hale said he hoped that making the contractor, which has control of energy use and raw material consumption at the plants, responsible for paying those costs would give it an incentive to conserve both and drive down costs.

Like United Water did when it took over from Woodard & Curran five years ago, Veolia will bring in some new workers to run the Gloucester plants, Hale said, but keep many of the long-serving operators in place.

Patrick Anderson can be reached at 978-283-7000, x3455, or via e-mail at panderson@gloucestertimes.com