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Public Private Partnerships: Financing Water and Wastewater Infrastructure

ASDWA recently attended a panel discussion in Washington, D.C. sponsored by the Atlantic Council on Public Private Partnerships: Financing Water and Wastewater Infrastructure.  The event brought together experts on financing of water and wastewater infrastructure, particularly through the use of public-private partnerships (P3).

The focus was not necessarily on privatization of infrastructure, where private entities take ownership the assets, but where private funding can support local goals and some of the financial and compliance risk can be transferred to the private sector.  Some of the advantages of P3’s cited by the speakers included on-time and on-budget delivery of projects, faster project completion, more innovation, and assumption of risk by the private entity.  The experts also believe P3s can lower project cost, when considered on a life cycle basis with adequate asset replacement.  According to the panel, successful projects depend on both sides being clear about their goals, developing projects that offer long term stability and return on investment that investors are looking for, and understanding by the public entity of the various risks and who bears the burden.

The experts agreed there is a large need for infrastructure financing in the water sector and large groups of investors, like pension funds and others, looking for long term investments with stable returns that water projects can offer.  The challenge is to bring the groups together.  Education is seen as the biggest need, although some tax code revisions and changes to local procurement practices would also help.  States should expect to see more of these projects in the future as public financing (SRF, grants) is reduced and water systems look for other options.