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reporting high readings of TCE, an industrial solvent that may cause cancer and liver damage. New Jersey regulators fined the company $4,000 in Camden and $64,000 in Toms River. Rich Henning, a United Water spokesman, said the reporting failure in Toms River was the result of confusion over a change in testing protocols. The company has replaced its local manager and is conducting an internal investigation. "We have apologized profusely,ll he said. llWe're doing everything we can to make sure that the water that gets to our customers meets all the requirements for safe drinking water.]] Henning conceded that some privatization deals have disappointed customers because, in the push to win contracts, some companies took on too much risk. nWe were kind of hitting each other in the head to get that next contract," Henning said. "I think now the companies that are still in pursuit of this marketplace are doing so in a much more refined, less risky and more mature way. 11 The industry's prospects for growth may hinge on whether Veolia's $1.5-billion contract with Indianapolis is judged a success. Tim Hewitt, who took over as president of Veolia Water Indianapolis a year into the contract, said the company's early difficulties stemmed from a flawed billing system and other inherited problems that took time to fix. But troubles have persisted, including the shutdown of the White River Treatment Plant in January 2005 and the federal grand jury investigation. Roger Edlin, then the night shift operator at the White River plant, said the emergency developed when a computer glitch turned off a pump that adds disinfectants to the water. The problem overwhelmed the system, Edlin said, because Veolia had taken two reservoirs out of service and cut back on cleaning and repairing the plant's filters. The company blamed Edlin for the shutdown and fired him. Edlin contends in a lawsuit that Veolia executives brought on the crisis by slashing maintenance and staffing to boost their bottom line. Seven other current and former employees said in interviews that Veolia's budget tightening had left the waterworks in poor condition. nYou're sitting there holding your breath, hoping that your last pump didn't go down," said Jim Bullington, a plant operator who took early retirement in December 2004. The company said its detractors simply can't accept the technological and. managerial innovations Veolia brought to a tradition-bound work environment. Evidence of the company's progress, Veolia officials said, can be seen in a 2004 customer survey that showed 83% of customers were "totally" or "mostlyll satisfied. Hewitt said Veolia has invested in new equipment and fine-tuned operating procedures I improving water quality and allaying customers' long-standing concerns about the taste and .odor of their tap water. Federal and state authorities, however, are investigating whether the company has accurately reported results of water-quality testing. Concerns about the company's testing prompted the Indiana Department of Environmental Management to conduct its own tests last fall. Although the agency said it found no violations of safety standards, Thomas Easterly, head of the department I expressed concern that the readings showed higher concentrations of 'disinfection byproducts than the company had reported from its own tests for at least four years. The trace chemicals "raise a potential health concern, 11 Easterly said. Hewitt said he was confident the probe would find no wrongdoing. Indianapolis is a showpiece for Veolia as it markets itself around the world, he said I and 4