New Owner Taking Over Vista Ridge Pipeline From Financially Strapped Abengoa
Update: SAWS released the following statement at 9:06 a.m. Wednesday:
The Vista Ridge Water Supply Project has new leadership. Garney Construction has concluded an agreement with Spanish firm AbengoaS.A. to assume the lead role in the San Antonio Water System (SAWS) Vista Ridge pipeline project. Garney will acquire an 80 percent equity stake and take over control of the project.
Financially troubled Abengoa is taking steps to sell its majority stake in the $844 million Vista Ridge water pipeline. Mayor Ivy Taylor made the announcement at her State of the City address Tuesday.
Taylor told a crowd of business and community leaders that Abengoa is in talks with Kansas City based Garney Construction, a company that has worked with the San Antonio Water System on other projects.
"I am pleased to announce that Garney, the current construction partner is finalizing negotiations with Abengoa that would allow Garney to take controlling ownership of the Vista Ridge project," Taylor said.
Abengoa Vista Ridge’s agreement with SAWS calls for the company to design and construct the 142 mile pipeline from Burleson County to San Antonio, and to assume much of the financial risk. But Abengoa’s parent company began bankruptcy proceedings several months ago, and that has left many wondering how the project would be financed.
SAWS President and CEO Robert Puente says Garney appears to have the financial ability to build the pipeline, and rate payers will not have to pick up additional costs.
“What we know of Garney – and this is a 20-year history, they’ve done a lot of work for San Antonio, for SAWS- we’re confident if they are the entity that takes over the project that the project will continue on time and on budget.”
San Antonio Council member Ron Nirenberg said the change of pipeline owners is a hopeful development.
“I had concerns about Abengoa since the beginning,” he said.
“I expressed concerns in city council meetings last year and recently that I would not support bailing out a foreign company or allowing SAWS to take over the project alone, because that would place the burden of risk on the backs of San Antonio tax payers. So, I’m cautiously supportive of the news that SAWS is working on a deal with Garney that would protect all the provisions of the contract which protect San Antonio taxpayers,” Nirenberg said.
The SAWS board must approve changes in the contract with Abengoa. Nirenberg and some other San Antonio council members have said they also want to revisit the deal.
Watch Mayor Taylor's entire presentation here, courtesy NowCastSA: