Jackson sues Siemens for $225M in ‘bait and switch’ over faulty water meters, billing system

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Eric J. Shelton, Mississippi Today/ Report for America

Jackson Mayor Chokwe Antar Lumumba speaks to media at City Hall Thursday, June 28, 2018.

Seven years after Jackson, a 200-year-old city with crumbling infrastructure and a $35,000 median household income, began overhauling its water meter and billing system, the city is taking one of its biggest contractors to court.

Jackson signed a $91 million performance contract with Siemens Industry Inc. in 2012 — making it one of the most expensive projects of its kind in the country.

In a deal the Mississippi Development Authority approved, Jackson agreed to pay roughly $1,000-per-meter for equipment and installation alone, according to the Jackson Free Press. By comparison, recent projects in San Francisco and Baltimore came with $285.71 and $208-per-meter price tags, respectively.

“In spite of the shocking cost, the system does not work,” Jackson Mayor Chokwe Antar Lumumba said in an press conference Tuesday. “Many water meters were installed negligently and approximately 10,000 of them do not work as I stand here today. The billing system furnished to the city as a part of the contract has also been a disaster. Many individual residents have been receiving exorbitant bills while some of the city’s largest institutional customers have never received a bill at all.”

Jacksonians have borne the brunt, as stories of residents receiving water bills in the thousands permeated local news reports. The city has also had trouble balancing it’s water revenues as a result.

Jackson officials allege Siemens scammed the city through a “’bait-and-switch’ that fell short of a true performance contract,” according to the city’s 44-page complaint filed in Hinds County Circuit Court Tuesday.

In a statement sent to news outlets, Siemens said an outside firm the city hired validated and reviewed their work.

“Siemens has gone above and beyond its contractual obligations to help address the city’s well-known challenges, which are complex,” the statement said. “While Siemens has not yet reviewed the complaint, it is disappointed the city has taken this action and will respond through the appropriate legal channels.”

The lawsuit is the culmination of years of issues plaguing the project, including the installation of faulty meters, meters that measured water in gallons instead of cubic feet and malfunctioning software.

The city says it is losing $2 million in revenue each month while it’s still obligated to pay $7 million in annual debt payments toward the faulty system. The city aims to recoup over $225 million, including the $90 million paid to Siemens, $75 million for lost revenue and damage to the city’s credit and several million for ongoing operations.