Privatization cuts costs on Bamberg utility bills
January 3, 2004
BAMBERG, Germany — Gone are the days when Bamberg’s Warner Barracks heats its facilities with a coal-fired heating plant.
A little more than a year ago, the 279th Base Support Battalion began privatizing its utility services, awarding contracts to local utility providers.
The move was part of Installation Management Agency-Europe’s effort to privatize utilities at all its facilities by 2006.
To date, about 41 percent of the total utility systems in Europe are privatized, said Michael Beldermann, German deputy director, Headquarters, IMA-Europe.
Bamberg’s switch, on the other hand, is nearly complete.
The heating plant was switched to a more environmentally sound and cheaper gas-fired system in October 2002. At the same time, electricity and gas systems were switched to local contractors. The potable water system was switched in 2003.
The Bamberg utilities are about 90 percent privatized, said Jurgen Engeter, chief of Utilities Division, Directorate of Public Works, Bamberg. The only thing left is the sewer system’s operation and maintenance, and that’s in the contract stage, Engeter said.
Under the privatization of utilities, Warner Barracks pays bills to the service providers each month. Any emergency repairs are performed by and paid for by the contractor.
The installation then pays a monthly service fee through IMA-Europe. More expensive items, such as the $2 million renovations to the heating plant, are paid for in increments instead of a lump sum when the work is finished, Engeter said.
Installation Management Agency-Europe pays about $190 million per year for utility costs of facilities and family housing, an average of $16 million per month, Beldermann said.
These utility costs are considerably lower than the Army in Europe paid in the 1990s.
Since its inception in 1997, utility privatization has saved IMA-Europe $43.6 million, or an annual rate of $16.8 million, Beldermann said.
The program reaps more benefits than just the monetary savings, however.
Engeter explained that under privatization, some projects that would have been paid for with more limited construction funds now fall under funds allocated to pay utility bills or they may even be part of the contract. Emergency repairs also fall under the contract.
“Bamberg city works replaced all of our old wooden light poles with steel ones,” he said. “This was part of the [electricity] contract. If we had to do that with our own money, we wouldn’t have enough.”