New wrinkle in Nassau's LI Bus-Veolia deal

Nassau County officials are concerned about the handover of its bus system in three weeks to Veolia Transportation after the private operator's parent company Tuesday announced that it planned to get out of the transportation business.

Executives with Paris-based Veolia Environnement SA, told investors Tuesday that the company planned to sell off $6.7 billion in assets over the next two years to focus on its waste, water and energy services. That includes unloading its 50 percent ownership interest in Veolia Transdev, which is the parent company of Lombard, Ill.-based Veolia Transportation -- the incoming operator of Nassau's bus system, which has 100,000 daily riders.

"This morning's news report raises questions that require Veolia's immediate response and attention," County Executive Edward Mangano said Tuesday in a statement. "The county awaits their reply."

The County Legislature is set to vote on a five-year contract with Veolia on Dec. 19, and hosted a public hearing on the deal Monday.

In a statement Tuesday, Veolia Transportation guaranteed that the development "will have no impact on our contract with the county."

"Our management teams in Nassau County, in the U.S., and around the world will not change," Veolia said in the statement. "Veolia Transportation greatly values its relationship with Nassau County and looks forward to delivering world class services to the county and its citizens as it works together to improve public transportation and passenger mobility."

In a letter sent to clients, Veolia added that French financial organization Caisse des Dépôts still owned half of Veolia Transdev, and "may likely increase its ownership share." A spokesman for that company did not respond to a request for comment Tuesday.

Despite the assurances, Nassau officials Tuesday expressed serious concern about Veolia's future. Nassau would be entering into a $106 million annual contract with Veolia to run the county bus system, renamed the Nassau Inter-County Express.

Michael Williams, dean of the Touro Graduate School of Business, called any assurance that Veolia's shedding of its transportation arm would have no impact on the county deal "ludicrous."

"No matter what anybody says, the original deal -- even though it's on -- is off, because the relationship now is with whoever potentially buys the contract," said Williams, who noted that the eventual new owner of Veolia Transportation may have different priorities and sensibilities than its current owner. "The point of the matter is that everybody is looking into the dark. You have no idea what you're getting into."

Nassau Legis. Robert Troiano (D-Westbury) had not been certain whether he would vote for or against the Veolia contract, but said that Tuesday's development "may be the tipping point to cause me to vote no."

"I am concerned about it because I'm not sure who the final parent is going to be," Troiano said.

The Metropolitan Transportation Authority, which has operated LI Bus for 38 years, is set to run its last bus in Nassau on Dec. 31. MTA officials have said they would be willing to extend their deal with Nassau upon the county's request.

Jamie Horwitz, spokesman for the Transport Workers Union, which represents about 800 Nassau bus workers, said that Nassau should look to extend its deal with the MTA "until they figure out what Veolia's plans are exactly.

"It looks like this is a pretty big wrinkle here," Horwitz said.