Saturday, August 13, 2011

What If The Watergrab Is Not Really About Water?

What if it's about money?

Why would a (quasi)municipality want to undertake a financially risky, devastatingly destructive, hideously expensive, and unpopular expansion project when it's customer base has shrunk significantly in the past few years?

This doesn't make sense. Southern Nevada Water Authority (SNWA) plans to start construction next year on a project who's cost is approaching SNWA's total assets at present.

...And of course, that's before the construction cost overruns.

...And of course, that's before the new loans to pay off the cost overruns

...And of course, that's before the hidden fees and penalties.

...And of course, that's before the refinancing fees.

The SNWA Groundwater Development Project is so massive, so expensive; it would be almost like building Las Vegas' total water infrastructure all over again. The watergrab is projected to cost “about” 3.5 billion dollars. SNWA's total assets at present are about 4.7 billion dollars.

That's a whole lot of money for some construction company. Maybe Halliburton, KBR, or Bechtel (the multi-national corporation that was kicked out of Bolivia by rioting citizens for mismanaging and price gouging a water project there) has already provided the estimate? They haven't told us who will build this, have they? Maybe we might get suspicious if the companies involved are known for padding contracts?

If there is collusion, you can bet there are some very high paying jobs waiting just on the other side of the revolving door for some of those SNWA executives.

And we all know that SNWA doesn't have the cash to pay for this huge project. So where are they going to get the money? Borrow it, of course. And some bank must have already given SNWA an idea of how much the financing costs are. So, why haven't they told us what banks are involved?

What if the bank involved is JP Morgan Chase, UBS, Goldman Sachs, or Bank of America? Since 2008, these banks have earned a scary reputation of unscrupulous financing. JP Morgan Chase, for example, was recently fined 228 million dollars for running a bid rigging scheme involving municipal bonds in 18 states. Did you get that? Municipal bonds!

Have the people of Las Vegas already forgot about the financial “crimes” that led to the housing crisis – and Las Vegas' present economic state? No. Of course not. Maybe that's why we don't know who SNWA wants to borrow from.

I'm not just making this up. All across the country, communities are being driven into crushing debt by greedy multi-national banks.

All it takes is a few corrupt officials – and a whole lot of bribe money.

In this Max Keiser video interview; Matt Taibbi shows an example of a small community that wanted to upgrade it's sewers – ending up with billions of dollars in debt.

This video has about three minutes of related information before the actual interview. Max Keiser is a bit over the top, but it's worth the information about whole communities being driven to debt servitude for the next generation.

The original cost estimates of the sewer upgrade were $250 million. With all of the contract padding and finance costs, the bill ended up at $3 billion, 12 times the original cost!

For more information; Matt Taibbi's report Looting Main Street explains how the nation's biggest banks are ripping off American cities with the same predatory deals that brought down Greece.

Is Southern Nevada above this kind of thievery? Nope. In fact, they are ripe for the picking.

And worse, the crushing debt would practically guarantee that the hoped for growth to pay for the Groundwater Development Project won't be as robust as anticipated. In other words, there won't be a need for more water – and those who don't leave Las Vegas will have to shoulder the whole bill.


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