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Beyond a Buzzword: Exploring New Models of Public-Private Partnerships

Judson Greif, US Water Alliance | July 26, 2016

It’s one of the most frequently used “buzzwords” when it comes to one water: P3. But public-private partnerships that unite public infrastructure projects with private capital are not a new concept. And it is more than just a buzzword. From water system upgrades to green infrastructure installations, there have been increasing examples of how partnerships between public agencies and private companies have come together to advance water and wastewater management across the United States.

P3s illustrate that we all have a stake in ensuring safe, reliable, and sustainable water and wastewater service in our communities. More and more organizations are hearing the call and coming to the table. On Thursday, July 14, 2016, the Bipartisan Policy Center continued a series of stakeholder conversations on water infrastructure needs in America. Building upon their new report, Bridging the Gap Together: A New Model to Modernize U.S Infrastructure, which presents a new model for maintaining the public benefit in public-private partnerships, the roundtable discussion focused on putting key tenets from the report to action.

Leaders from across the water sector, public policy, and finance joined former Secretary of Housing and Urban Development Henry Cisneros for a discussion on the extent of American’s water infrastructure challenges, the cost to address the problem, and the options for funding or financing that need. The urgency of the problem, the barriers to addressing it, and the associated price tag are all common water infrastructure talking points in Washington DC. Now we need to drive that momentum and urgency toward tangible solutions.

BPC has deployed an Executive Council on Infrastructure, a working group of corporate CEOs and executives from financial, industrial, logistics, and service industries, to develop recommendations that help facilitate increased private sector investment in US infrastructure. While this is one approach, it’s certainly not the only one needed.

Council co-chair and American Water President and CEO, Susan Story is a proven leader in the field and thought leader on the topic. She emphasized, “Solving the water crisis we face in the United States will take a multi-pronged approach. We need to take a look at all emerging threats to our water supply and infrastructure in the United States, and come together with an approach that is comprehensive and systematic.”

And the discussion reflected just that. Roundtable participants discussed a range of unique needs facing different communities and the unique funding and financing needed for solutions. While public-private partnerships are an option, many participants still raised concern for the added cost of capital and political risks of traditional P3 approaches. BPC’s report provides some recommendations for addressing these barriers and building P3s that meet the diverse needs of a community. Even as a one-of-many solution, P3s can vary in execution, as we can see with a variety of successful partnerships American Water has with cities across the country—from design-build-operate in Phoenix to acquiring the wastewater system in Fairview Township, Pennsylvania.

At the US Water Alliance, we know there is not a magic bullet for solving our nation’s water infrastructure crisis. More funding or financing for infrastructure needs is obviously necessary – however it may just be a Band-Aid on a much larger problem. As raised by Jim Gephardt from the US Environmental Protection Agency, these challenges also stem back to the way our nation values and prices water. While many feel water should be a free resource, it’s not free to treat and deliver. So how do we as a community communicate that? Efforts like the Value of Water Campaign are a start, but will take parallel and simultaneous efforts to change public perception and behavior.

The United States needs to reassess how it views, values, and manages water comprehensively, and take on root challenges to water delivery across municipal, industrial, agricultural, and environmental sectors. We are managing water in a 20th century paradigm with 21st century challenges including population growth and movement, changing weather patterns, and technological advances that are yet to be realized. At the US Water Alliance, we’re working to change that paradigm by educating our nation about the value of water, accelerating innovative one water strategies and policy solutions, and celebrating what works. Discussions like the one hosted by BPC are a very important step in getting us to comprehensive solutions.

 

Photo courtesy of Infrastructure Week.